Wednesday, June 22, 2005

Government and competition...

Many argue that government needs to operate like a private entity.. and I would agree with that. If government had to live within its means like businesses do, you would see streamlining, efficiency, and yes even some cutting of pork.

Others would argue that government offers services that the private sector cannot...which is true to an extent...but government should not be in the business of funding programs which private industry is better equipped to more efficiently handle.

Minnesota lawmakers are far beyond the point of funding just those necessities which the private sector cannot. So lawmakers continue to look for ways to raise taxes to further fund the behemoth they've created, though we thought electing more Republicans into office would stem that trend, listening to the debate at the Capitol these days would seem to discredit that action.

And so the idea of government & competition would seem to be at odds, government has no competition therefore it can continue to raise taxes at will, the people's wishes be damned.

Ah....but then this story seems there is this MN. manufacturer of electronics-Hutchinson Technology-which decided it didn't need to pay taxes on income generated by foreign subsidiaries and the Minnesota courts agreed, state Supreme Court ruling will cost Minnesota government $250 million to $300 million in the next two-year budget cycle, I couldn't be happier for them. This company's example illustrates, or should awaken our lawmakers to the fact that MN government does indeed have competition...and that is foreign government. It may be a government overseas, where a company decides to relocate due to cheaper regulatory practices and labor, or it may be a competing government closer to say South Dakota.

I've traveled extensively over the years between MN & SD selling air cleaning systems and I am familiar with Hutchinson Technology's original plant in Hutchinson, MN. And then a couple of years ago while traveling thru Sioux Falls, SD I noticed that Hutchinson Technology was building a new plant there which was about 4 - 5 times larger than their original plant in Hutchinson, MN. Odd that MN. Government's actions, specifically raising taxes more & more every year, can have an affect on a business' decision to move out of the state, taking its jobs and taxable income with it.....outside the grasp of MN. Revenue coffers. Is there a lesson to be learned here?.....Of course there is, but don't count on our lawmakers to pick up on it anytime soon.

Whether lawmakers tax businesses out of our market so that they decide to move across the border to enjoy less restrictive taxes, or impose anti-business legislation such smoking bans.....the net result is the same.... fewer businesses and fewer residences to pay those high burdensome tax increases. But perhaps Robert Wood Johnson will bail out those drunken sailors at the state capitol.

By the way, the state of South Dakota has a smoking ban it implemented 2-3 years ago. It states smoking is banned ....unless you have a liquor license, now there's a compromise. And if you don't think MN residents from Windom to Willmar and westward won't also take their spendable income into South Dakota to frequent smoker friendly bars & restaurants, then your as delusional as some MN lawmakers.

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