Minnesota’s Economic News — W/E 1/28/22
State and local taxes and spending Minn Post: A new Minnesota law is saving certain kinds of businesses a boatload in federal income taxes Star Tribune: Minnesota lawmakers face $7.7B…
More proof of Minnesota’s status as one of the highest taxed states in the country–not that we needed any. Minnesota comes in as the second least tax-friendly state in Kiplinger’s latest annual rankings. On the bright side, Minnesota still hasn’t hit rock bottom with Maryland holding down that position.
But the Fargo Forum wasted no time pointing out that North Dakota came in at the opposite end of Kiplinger’s spectrum.
North Dakota has been named the No. 6 most tax-friendly state in Kiplinger.com’s annual list of the most and least tax-friendly states. Minnesota, on the other hand, ranked as the No. 2 least tax-friendly state.
Surprisingly, Kiplinger’s not only highlights Minnesota’s top tax bracket ushered in by Gov. Mark Dayton and the then-DFL controlled state legislature in 2013. It’s how Minnesota gouges the middle class.
The North Star State hits hard with income tax. It added a new top income tax rate of 9.85% in 2013. But what makes Minnesota really stand out is that its lowest income tax rate is 5.35%. Property taxes are on the high side.
Read more at http://www.kiplinger.com/tool/taxes/T055-S001-kiplinger-tax-map/index.php#YeZdgYRmQYuLBaxT.99
The Forum did not waste the opportunity to make a pitch for North Dakota’s cross-border appeal in comparison to the Gopher State. Only five states with no personal income tax whatsoever outranked the Bison State.
North Dakota was found to be tax-friendly based on its modest sales taxes that favor agriculture and a relatively low state income tax. North Dakota collects an average sales and local tax of 6.78 percent. The state’s income tax is 1.10 percent on taxable income less than $37,950/single and $63,400/joint; and 2.90 percent on taxable income of more than $416,700.
What difference does it make? Kiplinger publishes the rankings as a guide to individuals and families to use in deciding where to move and live. And Kiplinger’s warns readers that Minnesota raises a red flag.
While the unemployment rate has hovered below 5% since mid-2016, wages have remained relatively flat, with average salary increases expected to increase just 3% in 2018. For many workers, the only way to get a big raise is to change jobs, and that often means moving to another state.
But before you accept an offer, you should check out the cost of living in your prospective employer’s city. You’ll want to look at home prices, of course, and the area’s public schools, because sending your kids to private school could wipe out your increase in salary. And don’t overlook the hit you’ll take from state and local taxes. Our annual guide to state taxes shows that tax rates are literally all over the map—and the difference could make a real impact to your personal bottom line.