In Which Sam Fixes The Economy

Okay, not really. But I think we've all been stunned this week as news of just how dire the economic crisis is has rolled in from states like California, Pennsylvania, and New York. Compounding the fear is the very real sense that those in power, whether at the state or national level, are more interested in fighting petty turf wars and making flowery public statements than actually finding creative ways to address what now threatens to be a fiscal and social catastrophe for many Americans.

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Oh, and in case anyone's forgotten, the media are only too happy to keep churning out stories about how hard non-profit charities, social service organizations, and arts groups are being hit by the recession, just as more and more people find themselves in need of the services that many of these groups provide.

The overall sense you take away from a few days of this sort of news coverage is that the entire country is on fire, and the fire department is ignoring the alarm bells because they're too busy arguing over who's winning the hand of poker they've been playing while waiting for an alarm. It's beyond frustrating for those of us waiting outside the halls of government for the slightest hint of leadership.

So anyway, here's where I offer up a small suggestion that might beget a few other small suggestions that might (somehow) lead to someone in authority actually doing something, if anyone's still interested in that approach to governance. Basically, my idea stems from two fervently held political beliefs espoused by opposing camps here in Minnesota, and it takes the form of a potential change in state tax law that might bridge the ideological gap and help out those struggling non-profits at the same time.

Republicans in Minnesota have long complained about our state's high business taxes, saying that, by taxing corporate profits at 9.8%, we're essentially begging leading companies to locate elsewhere, thus depriving our economy of jobs that might otherwise be attracted to the state's legendarily high quality of life. Now, whether you agree with that idea or not, it's a legitimate point of view that cannot easily be dismissed.

Another belief that's hard to dismiss is one that you hear constantly from those on the Minnesota left these days: that by slashing local government aid, fending off spending increases, and holding firm against any new state income taxes at all during his seven years as governor, Tim Pawlenty has shifted the state's tax burden to urban property owners and those who can least afford to pay, and made it much harder for cities and counties to offer a social safety net, with the result that more people find themselves underwater just as the national economy is at its worst.

I see an opportunity here, and I see it in the example provided by one of Minnesota's largest companies: Target. For years, Target has had a policy of donating a full 5% of its pre-tax profits back into the community. That amounted to $169 million last year, money that went straight into the coffers of schools, hospitals, and arts groups around the US. (Full disclosure: Target is a longtime supporter of the Minnesota Orchestra, and some of its executives have served on our board.) It's a corporate policy that can't be placed in a political pigeonhole, and that (since you never hear about it in Target's ubiquitous ads) the company apparently undertakes just because it seems like the right thing to do. In other words, it's a policy that actually accomplishes something other than ideological purity.

So what if Minnesota were to offer a hefty tax break to companies that undertook a similar policy to Target's? (There could be a sliding scale on the percentage of profits a company would be required to donate to qualify, of course - 5% would be pretty steep for a small business.) Any Minnesota corporation willing to support struggling non-profits in the state at a significant level would earn the right to pay less into the state's coffers. And any company that doesn't want to participate is free to stick with business as usual, and keep on paying our 9.8% tax rate.

Now, I know - this kind of plan never makes it into law, because there's too much for the ideologues on both sides of the aisle to shriek about. True believers on the left hate the idea of replacing government support for non-profits with corporate donations, and the hardcore anti-tax crowd on the right sees charitable mandates as nothing more than a different kind of tax. Both sides commence to arguing feverishly, and eventually things get so ugly that just making the whole thing go away is actually seen as a reasonable compromise.

But seriously - hasn't the last year taught us that ideological purity is pragmatic poison? Haven't we pretty much hit the wall as far as believing that either the right or the left have all the answers? All I want at this point is for someone in authority to start implementing a few practical solutions that will help us all lift ourselves out of this mess, and I'm just not interested in hearing any more garbage about how perfect the world would be if only the Democrats/Republicans/Socialists/Fascists/French would stop screwing everything up.

So I'm laying my personal left-of-center credentials on the line to suggest that one of the answers could be for everyone to follow the example of a gigantic, multi-national corporation that a lot of people love to hate. Any takers?