St. Paul Pioneer Press

Distributed by Tribune Content Agency

A worthwhile discussion is under way among Minnesotans who watch the numbers behind our tax decisions.

It deserves broader attention in a high-tax state examining the aftermath of increases layered on by Democrats in 2013.

Data from the IRS show the impact, the Center of the American Experiment asserts, in a new study. The numbers on state-to-state moves based on age and income show, on net, a nearly $1 billion loss of Minnesota income to other states between 2013 and 2014, according to the report.

Author Peter Nelson, the conservative think tank’s director of public policy, writes pointedly: “People vote with their feet.”

His analysis shows “a dramatic uptick in income leaving the state versus prior years,” Nelson told us.

Minnesota’s 2014 net loss of $944 million represented a sharp increase over prior years, the report says, noting that the state’s net loss of adjusted gross income was $490 million for 2011-12.

Where does the income go? To lower-tax states to the West and the South — including Arizona, Colorado, Florida, South Dakota, Texas and Washington — although the report notes Minnesota tends to gain income from higher-tax states in the Midwest and Northeast.

Further, those on the move are not just the retirees we’ve long perceived as the Minnesotans poised to depart. It’s people in their prime working years who represent a large portion of the net loss of taxpayers and income, the report argues.

It sounds a warning about the state’s future workforce: “The primary implication for the state is a serious concern over the quality of our workforce and the size of our workforce moving forward,” Nelson told us.

The liberal Minnesota Budget Project group, meanwhile, disputes those conclusions. You can’t “extrapolate from this data and say these large numbers of dollars are leaving the state,” Director Nan Madden told us.

She argues in a blog post that it is not accurate to compare the total incomes of people who moved in and out of Minnesota in a given year and describe the net difference as the loss of income from the state.

The theory that when people move, all of the income that they generated goes with them and then disappears from the state “doesn’t hold up,” Madden said.

“If a person leaves the state, the job they left is probably still going to be in place in Minnesota,” she explains. “If the individual ran a business in Minnesota, they’re probably going to sell that, and the business and its economic activity is likely to remain in the state.”

“It’s hard to draw the conclusion that tax policy is what’s really driving their decisions to move in or out of the state,” Madden maintains. Rather, the blog post cites evidence that such factors as job opportunities, housing costs and being close to family are much more often behind moves from state to state than tax levels.

We think Minnesota is better for discussions like this one. The Center of the American Experiment celebrated its 25th anniversary last year, and attorney and Power Line website founder John Hinderaker joined it as president this winter with a mission to expand its reach and influence. The Minnesota Budget Project is an initiative of the Minnesota Council of Nonprofits.

As we sift the data, Mark Haveman of the Center for Fiscal Excellence, which provides fiscal policy analysis, lends some useful perspective.

“I think we need to be careful about getting too hung up about issues like out-migration and talent drain,” he told us, because “in economic development there’s this battle between people who think jobs follow people” and others “who say people follow jobs.”

“Based on our work, we definitely fall into the latter camp,” he said. “If we do a great job of creating as compelling an environment as possible for business formation and growth — which includes things on the spending side like great schools, but also very competitive tax climate — we’ll get all the talented people we want to move here.”

Meanwhile, when it comes to working-age talent exiting Minnesota, Nelson contends “it’s very reasonable to assume that when they move to another state they are taking probably a better job at higher pay. They didn’t find that job in Minnesota.”

“I can’t understand how you can say this doesn’t reflect money walking when the net number shows more leaving” than coming in, especially with respect to working-age people, Nelson said. “The fact is, these working-age people are taking their children to another state. That’s a big deal.”

And one to consider in a state whose well-being depends so much on its future workforce.