Minnesota’s Economic News — W/E 2/23/24
Economic growth KFGO: U of M study shows ethanol generated $6.6 billion in economic activity in Minnesota Star Tribune: Chris Farrell: Productivity growth has led to our economic growth Minnesota…
On January 26, Gov. Tim Walz unveiled the Minnesota COVID-19 recovery budget. Among other things, the plan includes proposals to raise income and corporate taxes. In Walz’s words, the tax hike is meant to make sure that the rich pay their fair share.
Generally, the idea of making the rich pay their fair share is not new. It is a common line of thinking among politicians that often promise increased government spending, especially on assistance programs. At the federal level, for instance, proposals for a wealth tax have been made as a way to ensure the rich pay their fair share.
Interestingly enough, what a fair share is, however, is never properly defined as John Phelan illustrates. And that may be the more reason why this rhetoric has survived this long. Unfortunately, this has perpetuated the idea that the rich, commensurate to their income, face lower tax rates compared to other income brackets. Looking at the data, however, this cannot be further from the truth. If anything, the rich pay much more in taxes compared to low-income individuals.
Every year, Internal Revenue Service (IRS) publishes data showing how income taxes were paid among Americans. On February 3rd, the Tax Foundation published its analysis of the most recent IRS data. And according to the Tax Foundation,
In 2018, the bottom 50 percent of taxpayers (those with AGI below $43,614) earned 11.6 percent of total AGI. This group of taxpayers paid $45.1 billion in taxes, or roughly 3 percent of all federal individual income taxes in 2018.
In contrast, the top 1 percent of all taxpayers (taxpayers with AGI of $540,009 and above) earned 20.9 percent of all AGI in 2018 and paid 40.1 percent of all federal income taxes.
In 2018, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid roughly $615 billion, or 40.1 percent of all income taxes, while the bottom 90 percent paid about $440 billion, or 28.6 percent of all income taxes
Additionally, the proportion of income taxes paid by the rich has been increasing over time.
The share of income taxes paid by the top 1 percent increased from 33.2 percent in 2001 to a high of nearly 40.1 percent in 2018. Over the same period, the share paid by the bottom 50 percent of taxpayers fell from 4.9 percent to just below 3 percent.
Furthermore, high-income taxpayers on average have the highest average income tax rates.
What is fair when it comes to taxes is hard to strictly define and probably fluctuates from person to person. However, the most recent data shows that in 2018, not only did the rich pay the majority of the federal income taxes, but their share of income tax revenue has increased over time. Additionally, high-income individuals faced the highest average income tax rates.
Yesterday, a Twitter (X) account caught my eye, going by the handle of Minnesota Department of Human Services Employees, @Minnesota_DHS. It only has 34 followers, but makes the following claim…
Several news organizations have identified the man who shot and killed two police officers and a firefighter yesterday in Burnsville as 38-year-old Shannon Cortez Gooden. One of Gooden’s children called…
Yesterday, I wrote about a bill being pushed by three DFL Senators — McEwen, Seeberger, and Hoffman — which would erect a costly regulatory apparatus to govern who could buy, sell, or use…
There continues to be a great deal of effort by the media and political leadership in Minneapolis to either suggest crime is down or dismiss it by focusing on issues…