Archive for May 2016
A Fresh Take on Business Taxes
Conservatives and many business groups contend that Minnesota business taxes are high relative to other states. Apart from the dubious merit of some of these claims,* they generally do not take into account the level of economic activity that provides the base from which all taxes are paid. For example, businesses might be able to…
Read MoreMinnesota Manufacturers Optimistic
A recent survey shows that “Minnesota’s manufacturers are feeling remarkable levels of across-the-board confidence in the financial prospects for their companies in 2016,” despite growing uneasiness about the U.S. economy. Concerns among manufacturers about the impact of government policies and regulations have steadily declined over the last seven years. These findings are from the recent…
Read MoreThe High Cost of Fully Exempting Social Security Benefits
Fully exempting Social Security from the state income tax will result in a rapidly escalating state revenue loss and will have consequences that violate several principles of good tax policy. These and other aspects of plans to exempt all Social Security benefits were explored in a March 2016 House Research background paper. Using information from…
Read MoreHigh Income Households Win Big from Full Social Security Tax Exemption
Most of the tax relief resulting from the elimination of taxes on Social Security income will not go to low-income seniors who are living off of their monthly Social Security check, but to relatively high income households that are likely to have significant sources of other income in addition to Social Security. In fact, approximately…
Read MoreImpact of State Aid on 2016 Property Taxes
Total property taxes in Minnesota increased by 4.7 percent from 2015 to 2016, exceeding the combined rate of inflation and population growth, with county property taxes increasing by 3.4 percent, city property taxes increasing by 4.5 percent, and school property taxes increasing by 7.0 percent. However, before leaping to the conclusion that these local governments…
Read MoreMid-Week Reads: Voter Suppression and Racial Economic Disparities
Every week, North Star will take some time out of our schedules to bring you our favorite reads from the past week. Jeff Van Wychen Stop Voter Suppression Economist and former Clinton Labor Secretary Robert Reich neatly highlights various forms of voter suppression practiced by states around the nation and endorses “a new Voting Rights Act—that renews…
Read MoreMinnesota State & Local Government Employment Relative to Other States
The appropriate size of state government is a perennial hot topic at the State Capitol, with proposals to freeze or trim the number of state employees regularly surfacing. The ongoing discussion regarding state hiring freezes raises an interesting question: how many public employees are enough? The answer depends on the level of services and the…
Read MoreNew MDOR Data Show No Über-Rich Tax Flight
New data from the Minnesota Department of Revenue (MDOR) shows a significant increase in the number of very high-income taxpayers and the income taxes paid by them in the year following enactment of a new “top tier” income tax rate targeted at households with taxable income in excess of $250,000 for married joint filters, $200,000…
Read MoreDespite Recent Increases, School Aid Remains Well Below FY 2003 Level
Despite increases in recent years, real per pupil state operating aid to Minnesota school districts is still ten percent less than it was in fiscal year (FY) 2003. Over the same period, school property taxes have soared, although these property tax increases have not provided a net increase in real per pupil school district revenue,…
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