Purpose Statement
Minnesota state government is in its worst fiscal crisis in at least 28 years, and perhaps ever. The crisis spills over to Minnesota local governments. Most other states, and presumably many local governments too, are in crisis. So is the U.S. federal government, where fiscal irresponsibility has been the norm for most of the past 30 years. Adding to the fiscal woes, multistate and multinational businesses manipulate state, U.S. federal and other country tax systems to minimize the taxes they pay. Meanwhile, climate change and other environmental threats continue, and tax systems typically either ignore the threats or encourage actions that worsen them.Sensible Tax and Fiscal Systems is a nonprofit corporation formed for the purpose of developing and recommending solutions to the foregoing problems. STAFS will be neither liberal nor conservative. It will be practical (except in the sense of attempting to do what the conventional wisdom will say is impossible) and attempt to induce modernization of tax and fiscal systems to fit the global economy of the 21st century in an increasingly crowded and environmentally stressed world. STAFS will create options for solutions that will enable the liberals and conservatives to fight it out on a continuum, ultimately hopefully reaching political agreement on a mix of consumption taxes (loved by conservatives, hated by liberals) and income taxes (loved by liberals, hated by conservatives), while managing to tax business fairly in ways that are much harder to avoid than current tax regimes and do not punish businesses for hiring employees, and to tax activities so as to encourage stewardship of the environment, instead of encouraging its plundering, as too often is currently the case.
Any tax or fiscal system should be fair, reliable, understandable, efficient, environment-friendly, and competitive, in structure and in operation. STAFS will evaluate existing tax and fiscal systems, and its proposed improvements to such systems, against these criteria, and will invite others to do the same. STAFS may also evaluate others’ proposed tax or fiscal system reforms against these criteria.
STAFS will focus first on the Minnesota fiscal crisis, presenting to decision makers and the public a menu of options for (1) improving the functioning of both the state income tax and the state sales tax; (2) radically reforming the property tax to convert it from an expensive to administer foe of the environment and facilitator of governmental inefficiency into a much cheaper to administer environmental friend, while at the same time inviting Minnesotans from local citizens to local officials to legislators to the governor to focus on making their local governments much more efficient; (3) change Minnesota’s approach to taxing business from clobbering production in Minnesota to making Minnesota a tougher competitor than ever for business production, without giving away the store; (4) improving the budgeting process so that the state need never again face a crisis of such magnitude; and (5) encouraging actions that address our environmental challenges.
Once STAFS makes viable solutions to Minnesota’s fiscal crisis widely available to decision makers and the public, it will move on to consider potential improvements to the federal tax system, and multi-state and multinational business taxation.
