Minnesota’s high level of tax burden

Last year, American Experiment published a report arguing that spending cuts are the best way to close the Minnesota budget deficit. Minnesota, as we found, has some of the country’s highest individual and corporate income tax rates.

Additionally, Minnesota spends significantly more now than it did in the past. It also spends more compared to other states, especially on welfare. As the legislature has convened, Minnesota’s high tax burden is something they have to keep in mind as they navigate the state budget.

The following is additional data showing just how highly taxed Minnesotans are.

Other measures of tax burden

In December 2020, for example, researchers analyzed the overall tax burden among states for the three major tax options: property tax, sales tax, and individual income taxes. As a percentage of income, Minnesota had the eighth-highest level of taxation among the states and the District of Columbia for these three taxes.

Source: Hire a Helper

This is largely in tune with data showing Minnesota as one of the most heavily taxed states,  particularly true for income taxes.  According to the Tax Foundation, in 2019, Minnesota’s state and local income tax collections per capita were the seventh-highest in the nation.

Source: The Tax Foundation

In fact, in 2018, Minnesota had the fourth-highest individual income tax burden among the 50 states in the country.

Source: US Census Bureau, Bureau of Economic Analysis

Other taxes like Property and sales tax, although not as high as income taxes, are not low either. Property and sales tax burdens in Minnesota are about the national average.