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Study finds Minnesota tax system tougher on low-income families

Posted by: Baird Helgeson under Gov. Mark Dayton, Democrats, State budgets Updated: March 1, 2013 - 5:15 PM

Low-income and middle-class families paid a higher percent of income in state and local taxes than the wealthy, according to a new Minnesota tax study.

“Our overall tax system has been regressive for a number of years and this study confirms what we already know: lower-and middle-income Minnesotans continue to pay a larger share of their income in state and local taxes than higher-income Minnesotans,” Revenue Commissioner Myron Frans said in a statement.

Overall, the state and local tax burden averaged 11.5 percent of income in 2010. Minnesota’s highest earners – the 10 percent of households earning more than $130,000 – paid an effective tax rate of 10.3 percent. The remaining taxpayers paid an average total tax rate of 12.4 percent.

Under DFL Gov. Mark Dayton, tax officials are trying to devise a tax system that is more progressive, meaning all taxpayers have a more equal overall tax burden.

Minnesota’s income tax is the most progressive element of the state’s tax system, Frans said. But it is not enough to outweigh the regressive nature of other major state and local property and consumption taxes.

Here’s the full report.


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