Taxes can’t be fair. There is a huge gap between a 0% tax rate where services that industry can’t deliver are otherwise covered and a 100% tax where there is no incentive to work for pay. Any numbers in between will seem fair to some and not to others. In Minnesota, we are acutely affected by taxes and we have three choices: eliminate them, limit them or appreciate them.

A music lover can listen to Austin’s bluegrass, Nashville’s country, Seattle’s grunge, or Miami’s bass — all in cities in states with no income tax. If you don’t need to earn your living here, you can eliminate state income tax by moving. We have had many clients who have done so. People often turn this departure into a moral issue, but set aside the judgment and view it through the cost/benefit lens and you may someday make a similar choice.

But many of us don’t think we have the option of moving because our work ties us here. We may not be able to eliminate taxes, but we can try to limit them. Easy things like investing in your retirement plan or your company’s Health Savings Account are first steps. Virtually any retiree older than 70½ should be making the bulk of their charitable gifts from their IRA’s using the Qualified Charitable Distribution strategy.

If you are saving for college you can get a state tax credit or a tax deduction for investing in any state’s 529 plan.

And if you are in a situation where you may have to pay state estate taxes when you die, you can make sure that you own assets in each spouses name (since Minnesota estate tax laws inexplicably don’t have a portability feature where if one spouse doesn’t fully utilize their exclusion it can be used by the surviving spouse).

We can’t live here and eliminate our taxes (property, sales and income) so we have an additional choice, although potentially hard to swallow. We can continue to complain about taxes, which is not very interesting, or we can appreciate some of the things we get for those taxes.

Depending on what rankings you are looking at, Minnesota often scores high in quality of life scales. Some of our clients who have moved out of state have returned because they prefer health care here. We have great sports, culture, and a solid education system. Parks and green space are everywhere. And while costs continue to rise, Minnesota is still considered to be an affordable place. So at least getting something for our taxes.

While taxes can’t be fair, they don’t have to be as painful as we make them out to be.

Spend your life wisely.


Ross Levin is the chief executive & founder of Accredited Investors Wealth Management in Edina