Minnesota was recently ranked as the least tax-friendly state in the country, beating out both California and New York for the top spot on the list.
According to Kiplinger, a D.C.-based financial outlet, Minnesota’s “income tax rate of 5.35 percent” earned it the title of “least tax-friendly” state on the publication’s annual listing.
“The North Star State’s top tax rate of 9.85 percent is one of the highest in the U.S. But what makes Minnesota really stand out—and not in a good way—is its income tax rate of 5.35 percent even for the state’s lowest earners,” Kiplinger reports.
And since “Minnesota uses federal taxable income as the starting point for calculating state taxes,” the recent federal tax overhaul could actually make matters “worse.”
“Minnesota lawmakers and Gov. Mark Dayton were unable to agree on a fix during the 2018 legislative session, which ended in May,” the report adds, noting that an “estimated 300,000 Minnesotans will pay higher state taxes due to the loss of personal and dependent exemptions on their federal tax returns.”
“For that reason, Minnesota moves to the top of our least-friendly list,” Kiplinger concluded.
On the campaign trail, Republican gubernatorial candidate Jeff Johnson has vowed to not raise a single tax if elected, while his opponent, Democrat Tim Walz is open to increasing the state’s gas tax to fund additional transportation projects and hasn’t ruled out raising income taxes.
“I believe Minnesotans and Minnesota businesses are overtaxed, and Tim Walz believes we are undertaxed,” Johnson said during a recent debate, saying his opponent wants to “promise the world to everyone.”
“I am not interest in making Minnesota into a mediocre state. That means we need to work together for a world-class education, access to affordable health care and to build a healthy transportation system,” Walz responded.
According to a recent NBC/Marist poll, likely Minnesota voters ranked federal taxes and spending as their fourth priority heading into the midterms, with 10 percent of voters saying that it’s their top concern.
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