Tax Reliability: The State of Minnesota’s “Big Three”

Special Report on Tax Reliability: The State of Minnesota’s “Big Three”

An important and often underappreciated tax policy issue is reliability -- a tax system’s ability to support expenditure programs over the long run and provide dependable streams of revenue even as the characteristics and nature of the underlying economy evolves and varies with the business cycle.  Diversity in the tax system, like an investment portfolio, supports such an objective.  But it also requires a closer look at the structure of specific taxes because “how” these taxes are collected in a state can have significant impacts on their growth trends and variability in collections.  We take a closer look at our “big three” by providing some current relevant statistics pertaining to each tax, structural considerations impacting revenue collections, and some relevant policy issues going forward.