Minnesota’s Economic News — W/E 10/22/21
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Last year, the Center 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 higher now than it did in the past. It also spends higher compared to other states, especially on welfare.
As the new year has started and the legislature has convened this is something that they still have to keep in mind. But for good measure, I include here some additional data to show just how highly taxed Minnesotans are.
In December 2020, for example, researchers conducted an analysis of the overall tax burden among states for the three major tax options: property tax, sales tax, and individual income taxes. When it comes to these three taxes as a percentage of income, Minnesota had the 8th highest level of taxation among the states and the District of Columbia. So, the reality is that on average Minnesotan’s shoulder a higher tax burden compared to other states.
Source: Hire a Helper
This is largely in tune with data showing Minnesota as one of the most heavily taxed states. This is particularly true for income taxes. For instance, according to the Tax Foundation, in 2019, Minnesota’s state and local income tax collections per capita were the 7th highest in the nation.
Source: The Tax Foundation
In fact, in 2018 Minnesota had the 4th highest individual income tax burden among the 50 states in the country.
Other taxes like Property and sales tax, although not as high as income taxes, they are not low either. Property and sales tax burdens in Minnesota are about the national average.