Saint Paul, Minnesota – Overall tax rates are decreasing for nine in ten Minnesotans (those earning less than $140,690), according to the 2015 Minnesota Department of Revenue Tax Incidence Study, released today. The Tax Incidence Study indicates that by 2017, tax rates will drop for 9 in 10 Minnesotans compared to 2012 taxes and that our tax system will be more progressive, thanks in part to direct tax relief approved by Governor Dayton and the DFL-led legislature. The study attributes part of that decrease because wage growth outpaced taxes.
The annual study focuses on who pays taxes in Minnesota and gives lawmakers a glimpse of the state and local tax structure, reflecting current tax law. The study defines “effective” tax rates as the ratio of taxes paid to income. House DFL Leader Paul Thissen said the good news reflects the priorities put in place by Governor Dayton and the DFL-led legislature.
“As Minnesota’s economy continues to thrive and expand, this report shows we chose the right direction for our state – the path that puts the priority on hardworking Minnesotans," said Thissen. “Not everyone is sharing in the prosperity so now is the time to continue building a Minnesota where everyone has a better opportunity for success.”
The 2013-14 legislature made tax changes as part of their balanced budget that erased a deficit and made historic investments in education. While the top 2% of earners will pay more and corporations lost special tax perks, the heart of the tax bill was significant tax relief for millions of Minnesotans. DFLers provided $177 million in direct property tax relief, benefitting nearly 1 million Minnesotans. In addition, Governor Dayton and the DFL-led legislature cut taxes for middle class Minnesotans through federal tax conformity, which also benefitted more than 1 million Minnesotans. Minnesota’s economy has thrived and the state budget is projecting a $1.9 billion surplus.
“This report shows that the Republican claim that Democrats raised taxes on all Minnesotans is about 90% off the mark,” said Thissen. “The reality is Minnesota’s economy is improving, and it’s improving because our policies are now putting hardworking Minnesotans ahead of wealthy special interests. I hope House Republican leaders will review this study carefully as they are putting together their budget.”
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