26 June 2015

The best state for business? High-tax Minnesota.

CNBC is the premier business channel on television.  Their views on public policy and national politics are predictable and emphatically expressed in online and televised editorials.  Each year they conduct a survey to determine the best (and worst) states for business.  This year, presumably to the surprise of many on the political right, the top-scoring state was Minnesota.
Minnesota, known for high taxes and for being sympathetic to labor unions, is the nation’s best state for conducting business in 2015, according to a new ranking from CNBC, the business news channel.

The state moved up from No. 6 last year and 15th in 2013.

Never since we began rating the states in 2007 has a high-tax, high-wage, union-friendly state made it to the top of our rankings,” CNBC said in a statement accompanying the rankings. “But Minnesota does so well in so many other areas — like education and quality of life — that its cost disadvantages fade away.”

The network’s study uses 60 measures of competitiveness, separated into 10 categories. The categories include workforce, economy, infrastructure and transportation, education, cost of living, cost of doing business, access to capital, innovation, business friendliness and quality of life...

CNBC also said Minnesota ranked third for quality of life, noting a low crime rate, clean air and water, and access to quality health care...
More details at the StarTribune.  I don't know whether these data will be publicized very widely, but they should be used in debates about tax policy to emphasize that taxes per se are not evil.  The pros and cons of taxes depend on how the tax money is used by the states (or country).  When used to improve the quality of life for the residents, the result can be good for everyone involved.


  1. Hooray for Minnesota! My oldest daughter lives there, and despite the winters, loves it. They have a truly awesome public transportation system in the Twin Cities, everything is clean, housing prices are reasonable, but they still haven't found really good Mexican food. She was a Republican when she moved there, and now she's a Democrat. You can't beat the evidence of your eyes.

  2. http://thinkprogress.org/economy/2013/02/11/1573441/no-regulations-and-taxes-aren039t-holding-back-the-economy/

  3. Scott Sumner doesn't think this shows a general principle:

    2. High income tax rates are more feasible where you have a captive audience. I hope I don’t need to explain California. (I plan to retire there rather than (low tax) Austin or Miami.) And the New York area has cultural amenities. But what about frigid Minnesota? Here’s what non-Midwesterners may not know. If you are a highly educated “Millennial,” and like cities like Seattle, Portland, Austin, Boston or Raleigh, there’s really only one place in the Midwest that would work for you—Minneapolis/St. Paul. Governor Walker keeps getting hammered because Wisconsin is not doing as well as Minnesota, but there’s not much he can do to keep well-educated UW grads (who want to stay in the Midwest) from moving to the Twin Cities. I’m not saying their tax increase will work in the long run, but it will work in Minnesota better than in any other Midwestern state. --link


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