Archive for January 2017

Minnesota Re-Illustrated: Correcting Economic Disinformation

Last week, the conservative Tax Foundation and the Minnesota Chamber of Commerce released a report entitled, Minnesota Illustrated: A Visual Guide to Taxes & the Economy. Much of the information in the report is presented in such a way so as to give the impression that Minnesota is facing looming economic peril because it is…

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Fiscal Disparity Program Reduces Business Tax Disparities

The seven-county metropolitan tax base sharing program has successfully reduced property tax disparities within the metro region, as revealed by analysis presented in the previous article in this series. By taxing a significant portion of the business value in the metro area at a uniform rate, the program is particularly effective at reducing business property…

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Metro Tax Base Sharing Reduces Disparities

The metropolitan tax base sharing program—more commonly referred to as the fiscal disparity program—was designed to meet various tax policy goals, as noted in part one of this series. The success of the program in meeting some these goals—such as fostering “more orderly regional development”—is difficult or impossible to measure. However, other goals—such as reducing…

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Metro Tax Base Sharing: Net Contributors, Recipients

From the time we are toddlers, we are told that sharing is good. However, it is often not easy—and it can be complicated. A case in point is the metropolitan tax base sharing program, known more commonly as the fiscal disparity program.* For over four decades, the fiscal disparity program has been used to redistribute…

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Criticisms of Minnesota's Estate Tax are Inflated

The estate tax plays a positive role in generating revenue and reducing the regressivity of Minnesota’s tax system, as noted in the first part of this series. However, no discussion of the estate tax would be complete without addressing conservative criticisms of the tax. The most frequently cited attack on a state-level estate tax is…

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Estate Tax Increases Fairness

The one tax that conservatives seem to hate more than any other is the estate tax. Before the significant estate tax relief enacted in 2014 is even fully phased-in, they want to cut the tax again. However, the estate tax is an effective way to prevent the accumulation of extraordinary levels of wealth in the…

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Fourth Tier Impact is Modest

Ever since its passage during the 2013 legislative session, Minnesota conservatives have been critical of the fourth tier income tax, which increased the state tax rate on income above the fourth tier threshold from 7.85 percent to 9.85 percent. However, as noted in part one of this series, a significant portion—up to nearly 40 percent for…

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Much of Fourth Tier Tax Increase Shifted to Feds

Conservatives contend that Minnesota’s fourth tier income tax has led to a significant reduction in work, as well as flight to other states, among the high-income households affected by the tax. However, if we do the math, the impact of the fourth tier income tax increase upon the total tax liability and disposable income of…

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Comparing Health Care Premium Relief Proposals

This week, both Governor Dayton and the Republican-led legislature released proposals to help Minnesotans deal with spikes in health care premiums. Governor Dayton originally proposed his plan in October 2016, while the GOP plan is new. Both proposals spend about $300 million on premium relief, and include a 25 percent rebate. That’s about where the…

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Real City Spending Down Since 2006

Total Minnesota city revenues—adjusted for inflation—have declined by six percent from 2006 to 2015, based on data from the recently released Minnesota City Finances report from the Office of the State Auditor (OSA), as summarized in the preceding North Star article. The decline in city revenue exceeds twelve percent if we further adjust for growth…

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