Chamber report finds that Minnesota’s high taxes depress economic growth
Regular readers will know that Minnesota’s economic performance is — and has been for some time — below average. One of the headwinds our state faces is its high taxes, which slow economic growth and job creation, push residents out and deter others from coming here, and don’t even offer the compensatory benefits of a higher quality of life.
The Minnesota Chamber of Commerce’s new 2023 Business Benchmarks report reaches much the same conclusion.
On a range of economic indicators, the report finds that Minnesota “falls in the bottom half of the nation in four out of six.” The report notes:
Inflation and high costs are impacting consumers across the nation. But in some states, like Minnesota, businesses and families are experiencing a compounding effect from self-imposed headwinds like high tax rates. Minnesota’s tax burdens continue to be among the highest in the nation, with the sixth-highest individual income tax rate and the corporate tax rate set to be highest in the nation by 2024. Other states – 27 states, to be exact – have reformed their tax systems in the last two years to become more attractive for business investment, talent and growth.
The report also finds, again echoing arguments we at the Center have long made:
Electricity costs have increased and health insurance rankings have bounced around in recent years, from middle of the pack in 2019 (23rd in the nation) to 38th in 2020, and now back up to 19th.
The report concludes by asking what Minnesota can learn from other states. Indeed, we should be asking this question and for too long our state has been held back by a belief that we have, somehow, cracked it, that we are still ‘The State That Works.’ As we have long argued — and as this report confirms — that is no longer the case.