Others’ Opinion: Minnesota moves up among most-taxed

Published 9:53 am Tuesday, April 7, 2015

The Duluth News Tribune

Distrusted bu the Associated Press

It’s April. Tax Day, the deadline for filing federal income returns, is less than two weeks away. And if you live in Minnesota, you may be feeling like a fool (and not just today, either), and you may be having trouble letting go of your March madness.

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All of that because Minnesotans now pay more in taxes than most of the rest of the nation. According to the national nonprofit research group Tax Foundation, the state of Minnesota — apparently the Land of 10,000 Taxes as well as lakes — has moved into the top five of states with the highest tax burdens. TheTax Foundation compiles the data every year, comparing states’ policies, competitiveness and more when it comes to how much the government collects and how much we’re made to contribute.

The nonpartisan Tax Foundation is the entity behind Tax Freedom Day, the date that marks the moment each new year when wage-earners finally have worked enough hours and have made enough money to cover all federal, state and local taxes for the entire year. Minnesotans’ Tax Freedom Day this year is April 29.

Only the residents of New Jersey, Connecticut, New York and California need to work longer to cover their even-larger tax burdens. Massachusetts’ freedom-from-taxes date this year also is April 29, just like Minnesota’s.

“Just look at the data. … We’re even on the high end on sales tax. I mean, you name it, we are a high-tax state,” Minnesota House Speaker Kurt Daudt, R-Crown, said in an interview this week with the Duluth News Tribune Opinion staff. “The governor says we have a great work ethic and we have a great quality of life, and that’s why people stay here. We have an educated workforce; that’s why companies come here. They don’t come here because of the tax climate. Well, I would agree. But what if we had both? What if we had all of those things and we had a great tax climate? Think of the jobs that would come here.”

Unfortunately, when it comes to tax climate, Minnesota is going in the opposite direction. On the heels of $2 billion of new taxes enacted by the 2013 Legislature, Minnesota has shot from eighth to seventh last year to fifth this year on the heaviest-tax-burden list.

Not only that, but, “Tax Freedom Day in 2015 will occur 16 days later than it did in 2010, meaning that our tax burden has increased so dramatically in the past five years that each Minnesotan has to work an additional 16 days to pay our federal, state and local taxes this year,” Annette Meeks, CEO of the Freedom Foundation of Minnesota, said in a statement.

Minnesota’s state and local government tax burden is 10.7 percent, putting us sixth-highest among all states in that category, according to the Tax Foundation, which is based in Washington, D.C. And Minnesota’s state tax collection per capita in 2013 was $3,895, also sixth-highest in the nation.

Further, Minnesota’s business tax climate now ranks 47th out of 50, meaning that only three states have a worse business tax climate than does Minnesota.

It’s no wonder the Minnesota Chamber of Commerce’s top legislative priority this year is improving the business tax climate so Minnesota businesses can better compete, both nationally and internationally.

“If you look at Minnesota, everybody agrees the economy is pretty good right now,” Jim Pumarlo, communications director with the Minnesota Chamber, said in the Albert Lea Tribune last week. “Minnesota is getting a lot of good reports … but in tax policy we’re still ranking (among) the worst in the country.”

Closer to home, St. Louis County’s new half-cent sales tax for highway and bridge maintenance kicks in today. The Duluth City Council last year enacted a monthly street fee on all residents. In addition, in Duluth and elsewhere, 1 percent sales taxes boost local government. Other taxes here — whether paid as part of our property tax bills, applied to everything we buy, or charged when renting hotel rooms or going out to eat — are helping to pay for the Amsoil Arena, to revitalize the St. Louis River Corridor, for park maintenance, for new and remodeled schools, to lower class sizes and to boost tourism.

On top of all of that, Minnesota Gov. Mark Dayton has proposed raising the gas tax at the wholesale level to pay for transportation projects.

Most Minnesotans are willing to pay their fair share. Most of us are reasonable and can see the need when it exists. But where’s the limit? Minnesotans can’t be blamed for wondering — and even for asking out loud with some indignation — whether we’re being asked to pay more than our fair share, especially when looking around the rest of the U.S. and seeing what others are asked to pay.