WESTBROOK, Minnesota (STPNS) -- The last four or five years the country has gone through more crises than one can imagine. From a banking collapse, mortgage disaster, high unemployment, fiscal cliffs and sequesters. The country has run the full gamut.
When you look back on things — congress bailed out the banks, a couple of car companies and poured a ton of money into the country via the stimulus programs. It seems that congress has done basically nothing since those actions were taken, and it seems to be working to some extent.
Despite all of that the American people have proven to be somewhat resilient in their actions and attitude. A lot of economic professionals are looking at the U.S. economy and are optimistic that things have gone far better than a lot of people had expected. Some economists are predicting unemployment might go below 7 percent for the first time in five years. Some would say that is not good enough, but if you look where we have been the past few years it sounds pretty good to me.
Of course a big part of that unemployment number is coming from baby boomers that are retiring. Another thing is that there are approximately three million jobs going unfilled because there are not enough people with the right skills to fill them. A big part of that is because we are not training enough people with the right skills to fill them.
At the state level things appear to be getting better which is making Governor Dayton reconsider his aggressive budget proposal which included business to business taxes. That is a regressive tax — but with revised revenue forecasts Dayton is dropping most of those tax proposals. It will be interesting to see the new proposal. I really think there is a need for more revenue, especially if you look at a lot of our roads in southern Minnesota. Locally Highway 30 and Highway 62 are becoming very poor. We need to keep our roads in better repair, bad roads cost a lot in unnecessary car repairs. Good for car repair shops but not so good for consumers.
It sounds like the tax on clothing will be removed, but I hope it is not. We are losing tons of money there at Mall of America. A huge portion of business there comes from out of state visitors. A lot fly or drive in for a long weekend of shopping. They spend a lot of money for the experience — I doubt that anyone who is willing to spend hundreds or thousands of dollars for a power shopping weekend would even think about a few extra dollars in taxes. Minnesota is one of four states that exempt clothing tax. The clothing tax proposed would exclude any clothing under $100. I think under $50 would be better.
Of course another area that needs a lot of attention is minimum wage. There is no evidence that raising minimum wage has any impact on unemployment or cause inflation, some politicians claim it will. It will help the lowest income earners, who will put most, if not all, of that money directly into the economy.
I have my own ideas when it comes to minimum wages. I say raise it incrementally over the next three to five years. After that tie it into the rate of inflation much like is done with social security. That way hopefully we would not be facing this problem every ten or fifteen years.
One more thought — property taxes, while the budget in Minnesota was balanced by severe cuts and shifts, homeowners have suffered the brunt of these cuts and shifts through skyrocketing real estate taxes. To our legislators — do something about it! Senior citizens need help. But if you do anything, means testing should be considered when crafting a bill — people like Warren Buffet do not need property tax relief!
If any of this makes sense to you contact your state representatives.
Have a great week and do good!
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