In Fiscal Year (FY) 2011, Minnesota collected $26.8 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 the charts below, Minnesota’s state and local tax burden (tax collections divided by personal income) was the eighth highest in the nation for FY 2011 at 11.5 percent—or 9.7 percent above the national average of 10.5 percent. Remarkably, despite having a high tax burden it grown fairly slowly over time by 28.9 percent to 11.5 percent in FY 2011 from 8.9 percent in FY 1950.
Minnesota’s high tax burden is driven by a very high individual income tax burden (3.2 percent, 6th highest) and a high corporate income tax burden (0.43 percent, 12th highest). Of course, Minnesota’s high tax burden for these two taxes is driven by high marginal statutory tax rates with the 2013 top individual income tax rate at 7.85 percent (10th highest) and the top corporate income tax rate at 9.8 percent (4th highest).
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.