Redistribution vs Trickle Down

http://www.washingtonmonthly.com/political-animal-a/2015_05/redistribution_vs_trickle_down055385.php

May 05, 2015 10:00 AM
By Nancy LeTourneau

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Back in 1973, TIME magazine noticed that something interesting was going on in Minnesota.

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No, the story was not about how this land of 10,000 lakes was good for fishing. The story was about the Minnesota Miracle that was launched in 1971 to address the fact that resources were vacating both the rural and urban areas of the state - leaving them cash-strapped to provide basic services.

What was the answer that the Minnesota Miracle came up with? It’s that r-word that is so dreaded in conservative circles - redistribution. Instead of forcing local communities to rely on regressive property taxes, state income taxes were made more progressive and revenue was sent back to local governments to ensure an even playing field among urban, suburban and rural areas when it comes to government services.

Derek Thompson recently looked at how all that has impacted the Minneapolis/St. Paul Twin Cities area 40 years later.

Only three large metros where at least half the homes are within reach for young middle-class families also finish in the top 10 in the Harvard-Berkeley mobility study: Salt Lake City, Pittsburgh, and Minneapolis-St. Paul. The last is particularly remarkable. The Minneapolis-St. Paul metro area is richer by median household income than Pittsburgh or Salt Lake City (or New York, or Chicago, or Los Angeles). Among residents under 35, the Twin Cities place in the top 10 for highest college-graduation rate, highest median earnings, and lowest poverty rate, according to the most recent census figures. And yet, according to the Center for Housing Policy, low-income families can rent a home and commute to work more affordably in Minneapolis-St. Paul than in all but one other major metro area (Washington, D.C.). Perhaps most impressive, the Twin Cities have the highest employment rate for 18-to-34-year-olds in the country.

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