Minnesota Individual Income Tax System Remains Most Progressive in the Nation
Study Update Compares Individual Income Tax Burdens by State
Contact: Mark Haveman or Aaron Twait: 651-224-7477
The Minnesota Center For Fiscal Excellence (MCFE) today released its 2019 edition of Comparison of Individual Income Tax Burdens by State. The study, based on tax year 2016 information, is the ninth edition of this report now published on a biennial basis.
The study models 38 households based on different combinations of income, age, and size and calculates how much state and local income taxes they would pay in each of the 41 states that have an income tax plus the District of Columbia. It shows how state and local income tax burdens vary between states while offering insights into state tax policy issues such as tax competitiveness, income tax progressivity, and state earned income tax credits' impacts on low income households.
The report also includes:
Minnesota Highlights
These results do not include the effect of the Minnesota Social Security subtraction enacted for tax year 2017. Had the state enacted the Social Security subtraction for tax year 2016 instead of tax year 2017, only five senior filer types would have been affected. Four of these five types would have experienced quite modest improvements in tax rankings and in taxes as a percent of U.S. average (1-3 spots and 7%-15% decline respectively). The exception is single senior filers at $35,000 of income whose taxes as a percent of U.S. average would decline by over half.
It is important to note states' conformity responses to the TCJA in 2018 are not included in this study. That impact (and other state policy developments) will be presented when our payable 2018 report is issued in 2021.