Minnesota’s Economic News – W/E 4/9/21
State and local taxes and spending Grand Rapids Herald Review: Here Is How Much People Pay in Taxes in Minnesota Marshall Independent: Daudt hopeful for more tax breaks Inforum: Area…
I’ve often made the point that Minnesotans are some of the most heavily taxed citizens in America. Almost as often, when making this point, I’ve been told “Well, if you don’t like it move to Mississippi”. If you’ve ever made this point, you’ve probably had the same response.
Its almost always Mississippi, and I don’t know why. After all, the Tax Foundation ranks Minnesota 43rd overall on its tax burden. If I was looking to move to a state with a lower tax burden I have 41 to choose from besides The Magnolia State. All I have to do is avoid Louisiana, Iowa, Arkansas, Connecticut, New York, California, and New Jersey. Between them these states account for four of the seven franchises of The Real Housewives currently on air, so no great hardship. That leaves me with 88.72% of the landmass of the United States to choose from.
I think the argument is that life in Mississippi is crummy, and that if I want to escape Minnesota’s high tax burden I need to accept that this means living in shack like the one Elvis grew up in. But this trade off simply doesn’t exist. It a false choice. There is no link between a relatively higher tax burden and a relatively higher quality of life. You can see for yourself in Figure 1.
Figure 1 – State rankings for overall tax burden and quality of life
Source: U.S. News & World Report and the Tax Foundation
U.S. News & World Report constructs a ranking of Overall Best States. A ranking of the states on Quality of Life is part of this. On this measure specifically, Minnesota ranks an impressive 2nd nationally. But North Dakota and Wisconsin, the two states which sandwich Minnesota in the rankings, have Tax Foundation tax burden rankings of 17 and 32 respectively, compared to Minnesota’s 43rd. New Hampshire, which ranks 4th for Quality of Life, ranks 6th for its tax burden.
“Well, if you don’t like it move to New Hampshire”. People never say this to you when you make the point that Minnesotans are some of the most heavily taxed citizens in America. But you could, if you wanted lower taxes, move to the Granite State and your quality of life would not be very much affected. I guess that is why they don’t say it.
John Phelan is an economist at the Center of the American Experiment.