Posts Tagged ‘tax regressivity’

The Connection Between Public Policy and Prosperity

Since the end of the Great Recession, Minnesota has comfortably surpassed Wisconsin in terms of GDP and income growth, and job creation. Based on newly released 2016 data from the American Community Survey, median household income in the Gopher State is 15.5 percent ($8,800) greater than in America’s Dairyland. Caution is in order when drawing…

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Income Inequality, Tax Regressivity are Worse Than We Thought

There has long been convincing evidence—both at the state and national levels—that income inequality has accelerated in recent decades, with an increasing share of wealth concentrated in fewer and fewer hands. Extreme income inequality—coupled with stagnant or declining real wages—undermines a consumer economy, since working families are less able to purchase the goods and services…

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Federal Estate Tax Conformity: A Big Win for Über-Rich

By ensuring that extremely high-income households pay state and local taxes at a rate approaching that of other Minnesota households, the estate tax does more, dollar for dollar, than any other tax to reduce tax regressivity in Minnesota. Conservatives want to dramatically reduce Minnesota’s estate tax by conforming to federal law, which would have the…

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Estate Tax Break Increases Regressivity

Conservatives in Minnesota continue to push for a dramatic reduction in Minnesota’s estate tax, which would almost exclusively benefit the state’s wealthiest residents (who already enjoy below average effective tax rates). Implementing the estate tax reductions proposed by conservatives would further increase the regressivity of Minnesota’s state and local tax system. The estate tax is…

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Minnesota Taxes Much Less Regressive

Minnesota’s state and local tax system remains regressive, with lower- and middle-income households generally paying a larger percentage of their income in state and local taxes than higher-income households, although the degree of tax regressivity is modest and significantly reduced relative to what is was two years earlier. The decline in tax regressivity is primarily…

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Federal Taxes in the MTIS: In or Out?

The Minnesota Tax Incidence Study (MTIS) looks at the impact of state and local taxes by income group, in an attempt ascertain who is paying Minnesota taxes. Since it was first published by the Minnesota Department of Revenue (MDOR) in 1991, the MTIS has been one of the best state tax incidence studies in the…

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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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How to Succeed in Tax Rankings Without Really Trying

The conservative Tax Foundation just released the 2017 version of its State Business Tax Climate Index (SBTCI) and once again, Minnesota is purportedly in terrible shape. Minnesota policymakers need only follow a simple strategy to improve its ranking on the SBTCI: increase the regressivity of Minnesota’s state and local tax system by shifting a larger…

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The 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…

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