For the first time in nine years, 90% of Minnesota taxpayers will be paying a smaller percentage of income to state and local taxes. The only taxpayers who will see an increased burden are the highest earners – the same people who have been paying nearly 2% less of their income in taxes than the rest of Minnesotans.
The top 10% of households are projected to pay a 0.2% increase in 2017 over what they were paying in 2012, but still substantially less than what other Minnesota households are paying. While these high-earners are still paying less, the gap between them and the other 90% of Minnesotans is shrinking as the tax system becomes fairer for middle-class families. This fairness is due to major policy changes that make the Minnesota tax system less regressive: increases in the property tax refund, the Working Family Credit expansion, and the fourth tier income tax rate.
The Minnesota Department of Revenue’s 2015 Tax Incidence Study analyzes 99% of state and local taxes paid by Minnesotans to determine the total share of state and local taxes paid by each of 10 income ranges.