In Fiscal Year (FY) 2015, Minnesota collected $32 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average Minnesota taxpayer can afford this level of taxation.
As shown in Chart 1, Minnesota’s state and local tax burden (tax collections divided by private sector personal income) was the eleventh highest in the nation for FY 2015 at 15.8 percent—or 9 percent above the national average of 14.4 percent.
As shown in Chart 2, Minnesota’s tax burden has increased over time by 53 percent to 15.8 percent in FY 2015 from 10.3 percent in FY 1950.
As shown in Chart 3, Minnesota’s 15.8 percent tax burden is greater than these combined industries: construction (5.8 percent), retail trade (5.5 percent), information (2.4 percent), and real estate and rental and leasing (2.1 percent).
Minnesota’s higher than average state and local tax burden is driven by a significant individual income tax burden (5.1 percent, 6th highest), corporate income tax burden (0.7 percent, 9th highest), and all other taxes burden (3.3 percent, 14th highest) which more than offsets the other lower taxes such as the property tax burden (3.8 percent, 30th highest), and sales tax burden (2.8 percent, 35th highest).
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Minnesota—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.
The Minnesota counties with the highest local government tax burden include:
The Minnesota counties with the lowest local government tax burden include:
Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 65 years! See if your state has been above or below the national average?
Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.