Posts by Jeff Van Wychen

Minnesota in the Middle on Middle-Income Taxes

Minnesota conservatives work hard to portray Minnesota as a high tax state. In reality, state and local effective tax rates for middle-income families in Minnesota are fairly typical of the rates in other states. In addition, average effective tax rates for lower-income households in Minnesota are below the national average. The state and local effective…

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Minnesota Earns High Marks for Fiscal Responsibility

Last week, Standard & Poor’s (S&P) upgraded Minnesota’s  general obligation (GO) bond rating to “AAA”—its highest ranking. Minnesota became one of only thirteen states to enjoy a AAA GO rating from at least two of the “big three” credit rating agencies (S&P, Fitch, and Moody’s). The improvement in Minnesota’s credit rating not only has the…

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Income Tax Hikes Have Not Stifled Job, Income Growth

Conservatives frequently argue that tax increases stifle job growth. In reality, data from 1950 to the present show no indication that Minnesota income tax increases have had any adverse impact on job creation or income growth. In fact, Minnesota’s rate of job and income growth has tended be greatest following state income tax increases and…

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Minnesota Passes Wisconsin in Total Jobs

Total 2017 employment in Minnesota eclipsed that of Wisconsin for the first time in history,* despite having over 200,000 fewer people. Just ten years ago, Minnesota had 93,000 fewer jobs than Wisconsin. The Gopher State now has 6,200 more jobs, according to the Quarterly Census of Employment and Wages (QCEW).† In light of recent trends…

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Poor People Have the Highest Effective Tax Rates

An argument used to undermine programs that provide tax relief for low-income people—such as Minnesota’s Working Family Credit (WFC) and Child & Dependent Care Credit—is that they provide tax relief to households that are not paying taxes in the first place. However, poor people do pay taxes. In fact, as a percent of income, they…

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Minnesota Business Taxes Low Relative to Benefits Received

The public in general and businesses in particular understandably pay close attention to the taxes they pay. However, the other side of the coin—the benefit derived from the expenditure of tax dollars—is frequently overlooked. This makes about as much sense as focusing on the price of the new car you’re buying, but ignoring the quality…

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No Significant Net Migration from Minnesota

In recent years, Minnesota conservatives have fretted over the net loss of population to other states. As with nearly every problem the state confronts, the culprit—according to conservatives—is Minnesota’s progressive tax and fiscal policy. The problem with this theory is that it does not jibe with the facts—especially the most recent information from the Internal…

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Myths of the 2017 Federal Tax Act

The “Tax Cuts and Jobs Act” (TCJA)—the massive federal tax cut passed in December 2017—has failed to produce the benefits touted by its promoters. And if history is any indicator, there is no reason to believe things will change in the future. The following debunks several often-touted claims made by TCJA backers. Myth #1: The…

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State Aid Decline Coincides with City Property Tax Increases

Some state elected officials regularly express angst about the growth in city property taxes, blaming local elected officials for this trend. However, this is a case of misplaced attribution. True, city property taxes have increased since 2000. However, the primary culprit behind property tax hikes are reductions in other city revenues—most notably, state aid. The…

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