Posts by Jeff Van Wychen
Businesses Pay a Relatively Small Share of Minnesota’s Total Tax Bill
Businesses pay nearly two-fifths of all state and local taxes collected in Minnesota. This is significantly less than the national average and less than in all but a handful of states. Each year, Ernst & Young (EY), in conjunction with the Council on State Taxation (COST) and the State Tax Research Institute (STRI), publishes Total…
Read MoreMinnesota 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…
Read MoreMinnesota 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…
Read MoreIncome 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…
Read MoreMinnesota 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…
Read MorePoor 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…
Read MoreMinnesota 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…
Read MoreNo 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…
Read MoreMyths 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…
Read MoreState 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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