Minnesota Gov. Tim Walz adds excitement and criticism of the Democratic presidential ticket.
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Walz also brings a substantive economic policy record as a governor and during the 12 years he spent in Congress representing Minnesota.
“We have to look at the nominee’s experience as a private citizen and governor of a state,” said Joel Griffith, Research Fellow, Financial Regulations, Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation.
“Walz has an affinity for very ‘so-called progressive’ policies, including tax burden increases, increased regulations, and (government) spending increases,” Griffith said. “We saw this in Minnesota, which has made entrepreneurship and business growth difficult.”
GOBankingRates talked to Griffith about why he doesn’t think Tim Walz is the right financial VP pick.
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The Vice President’s Role
The Vice President plays an important role in the national economy because they often serve as the President’s chief advisor on domestic and foreign issues.
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“The Vice President also plays an especially important role when the U.S. Senate is evenly divided between the political parties and can break (voting) ties,” Griffith said. “The Vice President can be an emissary for the White House on important issues, shuffling between the White House and congressional offices.”
In addition, former Vice President Mike Pence facilitated a task force that created a public-private partnership between the federal government and companies to accelerate the production, manufacturing, and distribution of COVID-19 vaccines, treatments, and diagnostics.
Similarly, Vice President Harris encouraged communities of color to become vaccinated against the COVID-19 virus in 2021.
1. Personal Income Taxes
Meanwhile, the governor, Walz, backed giving one-time checks to Minnesota residents and implementing tax cuts for low-income, older adults on Social Security.
The tax cuts also aimed at helping single-person households earn less than $75,000 and couples earn less than $150,000. However, the tax cuts included a surtax on long-term capital gain income and other net investment income of households earning $400,000 or more.
Minnesota is also one of 12 states in the nation that taxes Social Security benefits, which means older adults have less money in their pockets while living on a fixed income and facing high inflation.
2. High Corporate Tax Rates
As of January, Minnesota had the highest corporate tax rate in the country at 9.8%, compared to the national average of 6.5% and 7%.
“We can’t divorce his stances on businesses from their effect on regular families,” Griffith said. “If you increase taxes on businesses, a majority of them are passed on to consumers and employees.”
Griffith also said that high corporate tax rates coupled with increased business regulations have made it difficult for companies to maintain and grow in Minnesota. Some companies have left Minnesota for other states with lower corporate tax rates and fewer regulations, like Texas, Florida and North Carolina, which has the lowest corporate tax rate at a flat 2.5%.
3. Increases in Business/Environmental Regulations
Several environmental regulations affecting businesses were increased or changed since Walz became Minnesota governor.
Last year, Walz signed into law legislation banning the sale of manmade chemicals intentionally added to products like non-stick cookware, water-repellent clothes, and some food packaging starting in 2025. The change could require companies to assess the presence of the chemical, commonly known as PFAS, in their supply chains to comply with the new state requirements.
4. Environmental Spending
Minnesota’s latest environmental budget increased by $1 billion to support projects aimed at addressing climate change.
One controversial measure requires limiting emissions from sectors like transportation, energy, and manufacturing by switching to renewable energy sources, broadly known as “Net Zero.” While Minnesota’s budget surplus paid for the state spending increases, some critics said there would be long-term fiscal implications and tax burdens on residents and businesses.
“Net Zero will result in trillions of dollars of spending,” Griffith said. “We can see what families are going through in California, where their rates are triple or more. As the ‘Green New Deal’ (public policy to address climate change) moves forward, it will increase the cost of manufacturing.”
Griffiths said because factories rely on electricity, Green New Deal initiatives will make the U.S. less competitive in terms of job growth and expansion.
5. Relationship With China
Walz visited China dozens of times as an educator, for his honeymoon in 1994, and later as a U.S. Congressman, tracking China’s human rights policies.
Walz is known in foreign policy circles for his consistent and measured stance on China, while Trump said he would impose a 60% tariff on all Chinese imports. Nevertheless, some fiscal conservatives like Griffith said Walz’s visits to China over the decades could influence Walz’s economic policies.
“China rules its communist economic policy with an iron fist,” Griffith said. “We see a number of political leaders in the U.S. who want to emulate the Chinese model of a centralized, planned economy and other policies. It stunts economic freedom.”
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: I’m an Economist: 5 Reasons I Don’t Think Tim Walz Is the Right Financial VP Pick
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