June 21, 2008
Grand Forks (ND) Herald on Business?s Reaction to High Corporate Taxes
"VIEWPOINT: Taxes push Marvin to North Dakota"
By Charlie Quimby
A longtime Minnesota business announces it's expanding across the border. Is this more fodder for those who claim corporate taxes are driving business to lower-tax neighbors? Or does it illustrate how business expansion plans respond to a complex mix of factors?
South Dakota usually is cited as the destination for migrating Minnesota businesses—typically without naming any specific companies. But in this case, it's North Dakota that will benefit from an expanding Minnesota company.
Marvin Windows, headquartered in Warroad, Minn., has announced plans to nearly double the size of its facility in Grafton, N.D., adding up to 50 new jobs over the next five years. Marvin's Warroad location employs about 2,500.
But lo and behold, North Dakota isn't quite a low-tax haven of the sort we're told is going to strip Minnesota of its economic growth. In fact, it ranks just above Minnesota in total state and local taxes as a percentage of income and two places higher in corporate income tax rankings.
It's true that North Dakota is a comparatively low personal income tax state, but the company isn't moving there to lower taxes for the owners. The Marvin family is staying put in Minnesota, and most of the 475 jobs created at the Grafton plant (which opened in 1997) have been filled by local residents.
Let's look at some of the likely reasons figuring in Marvin's decision.
. . .
- Business taxes. Lest anyone think I'm gaming the numbers, here is the low-tax-advocating Tax Foundation's ranking of the states. Although North Dakota generally scores better than Minnesota on the "business friendly" indexes, it's nowhere close to South Dakota.
