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Minnesota Shows Best Improvement in Tax Progressivity; No Economic Drag to Taxing Rich

A new report finds that Minnesota is bucking a national trend of increasingly regressive taxation. From 2013 to 2015, Minnesota has led a small minority of states (14) who improved their tax structure by laying higher burdens on higher-income taxpayers.

Jeff Van Wychen,"Minnesota's Progress Against Regressivity," Growth & Justice, April 2015,  p. 14
Jeff Van Wychen,”Minnesota’s Progress Against Regressivity,” Growth & Justice, April 2015, p. 14. (Click to embiggen!)

Using the metrics in this report, Minnesota still has a regressive tax system. Only three states have a net progressive tax system—California, Delaware, and Oregon. But Minnesota has risen from sixteenth to seventh least regressive over just the last couple years, while South Dakota has sunk further into the depths of the six most regressive states.

Ah, but if Minnesota goes taxing rich folks more, they’re going to gum up their economy, right?

Au contraire:

Despite the concerns of naysayers, the reduction in tax regressivity resulting from the 2013 and 2014 tax acts does not appear to have damaged Minnesota’s economy, as the state continues to outperform the national average based on most key indicators. Furthermore, a correlation between these indicators and the degree of tax regressivity as measured by the Suits index for 44 states (excluding oil and gas producing states that are economic outliers) shows that lower levels of regressivity are associated with above average rates of personal income and GDP growth over the last five years. In short, the preliminary indication is that reduced regressivity is correlated with higher—not lower—levels of economic growth [Jeff Van Wychen,”Minnesota’s Progress Against Regressivity,” Growth & Justice, April 2015, p. 4].

Make taxes fairer, and your economy will be fine. That’s encouraging!

40 Comments

  1. Roger Elgersma

    Oregonians have the same, no never not in my lifetime you will lose your job for it, attitude against sales tax as South Dakotans have against income tax. So they have a fairer tax system than we do by a long ways.

  2. Roger Elgersma

    If you do not overly tax the poor they will spend more money and the rich get more customers. So then they can afford to pay more taxes. So if you are smart enough and have the work ethic to make more money than most and are not greedy enough to think you need it all, you can do real well in Minnesota.
    Carnegie in steel, Rockefeller in oil and Hill in railroads all were excellent managers and did real well. Their excellent management improved their industries. When they got greedy and thought they had to run all the competition out is when we got monopoly laws. The hitlers who want to rule the world are the ones that get into trouble.

  3. SuperSweet

    I moved to Minnesota after 59 years in South Dakota. I am not unhappy.

  4. grudznick

    Mr. Elgersma! Why would you throw the towel in on your argument so quickly?

  5. grudznick

    We are all happy with you, Mr. SuperSweet. Please stay there and be mostly quiet.

  6. owen

    Yes Grud. good roads, good schools, a budget surplus that’ll help the schools and others even more. I’m sure I’m missing something. Yes Grud. What a terrible place to live

  7. grudznick

    If you need any help packing or suggestions on places, Mr. Owen, I can have a crew assist and there is this nice little town called Welcome, Mn, in which I am positive your level of happiness will be, er, welcome.

    And then that will raise our score!!

  8. grudznick

    By they way, I am only blogging the facts. That page there has the facts. I know it angers some of you libbies, and that’s OK. I understand your anger, and I also understand how me, a conservative with common sense having more understanding that you, a libbie with little common sense, angers you.

    I only offer you soothing tea to calm your nerves. And wonder why none of you whine about moving to Iowa. You should consider that, too.

  9. 96Tears

    Would you go further with a doctorate from South Dakota or one from University of Minnesota? Answer: You stand a 100 percent better chance of teaching at USD or SDSU with a U of M doctorate than a doctorate from any of South Dakota’s universities.

    South Dakota has a pinheaded legislature that believes you get sumthin fer nuthin when it comes to educating South Dakota’s youth. Well, that shit doesn’t build a state or provide anything beneficial other than the lowest paid wage earners in the United States. It just keeps pandering pinheads in office. Granted, South Dakota keeps electing these pinheads to run our state, so they have it coming. Hell, they elected a racketeer to the U.S. Senate knowing he was at the heart of the rottenest scandal in state history.

    This is a state of losers who wait in line for crumbs from T. Denny Sanford’s banquet tables. It’s a welfare state that gets back $1.50 for every dollar it invests in federal taxes, and it has the stupidity to bite the hand that feeds its economy. I think this state could do better. I’ve waited for real leaders to emerge (from any party) and for the people to realize they’ve settled for shit since Harvey Wollman turned off the lights in the Governor’s office. Maybe. Someday.

    Say what you will about Minnesota’s taxes. I see a lot of major global corporations keeping their offices in Minnesota and enjoying the benefits of living in a smarter, more enriching economy. I look at South Dakota’s economy and see only stagnation and stupid people running its government. It might be the world T. Denny likes, except T. Denny lives in California where there is also a society that supports education and culture.

    You don’t get sumthin fer nuthin. It costs money, and it requires that you tell T. Denny’s shills in politics and corporate South Dakota that you expect more.

  10. grudznick

    Mr 96 tears, you should probably stop wasting your eye juices on South Dakota since you feel that way. Think about focusing on Nebraska. Or maybe Hawaii. Just stop wasting your eye juices in South Dakota. We will be even happier (happiest place on earth, you know!) than we are now. And…if you are a greenie libbie, think of all the trees you’ll save by not wasting so many tissues.

  11. Roger Cornelius

    grudz,

    In America citizens can choose to live wherever they choose, whether they like the place or not.

    Only the cheapest kind of political pol would suggest or tell another citizen to move if they don’t like here.

    We also have a right and an obligation to question or government, particularly when we find our government highly questionable.

  12. owen

    I don’t think it’s a crime to want to improve the sate I live. I know that drives you right wingers nuts. Us “libbies” want to improve life for ALL South Dakotans and not just the rich.
    I’m sure you love living in beautiful Athol SD. Seems fitting

  13. Wayne Pauli

    People with nothing to say always say, “Well, if you do not like it leave.” My grandfather homesteaded in South Dakota. My folks lost their health living here and working themselves to death. Where were you people telling them to leave as far back as 1909? Where were you Grud, when you could have provided such great guidance..

  14. grudznick

    Darn right you are, Mr. C. I think I may start bitching and whining (like some of our out-of-state-neighbors) about their states. Those damn whiners. Nothing pisses me off like a whiner who doesn’t do anything about it. That’s why the good teachers don’t get raises…because of the whiners. When the whining stops and people act to make things better, then things get better….

  15. larry kurtz

    This week, the Democratic Congressional Campaign Committee launched a one-day ad in the University of Minnesota’s student newspaper as part of an ad campaign in college newspapers at 14 universities around the country, pointing out GOP-proposed cuts to the Pell Grants that help lower-income students afford college tuition.

    http://www.startribune.com/politics/statelocal/298631721.html

  16. grudznick

    Minnesota countihood for the tribes, and Mexico.

  17. Jana

    So what adjective would I put in front of whiners about fat cat administrators and teachers with their luxury parking spots?

    Grud? Can you help me here?

    I was trying to think of a state that had better and paid their teachers less…but I came up with a blank. I tried finding a state for you that had less respect for teachers and came up short there as well.

    Guess we’re stuck with you!

  18. Roger Cornelius

    Another beauty of the 1st Amendment is that non-residents are free to criticize or support our state, they may well love South Dakota and are former residents, they do have a right regardless of their status to comment on our state activities. I’m fairly certain that grudz has stuck his nose into the politics of other states.

    It has been my experience that those that constantly complain about whiners are actually the biggest whiners of all

    Whiners also come on a liberal blog and beat their hobby horse about good teachers and good social workers that should be paid more.

    Larry, mike from iowa, Deb, and others from out of state, I say welcome to South Dakota, the land of infinite republican corruption.

  19. Lynn

    Owen,

    Athol, SD? who lives there?

  20. Wayne Pauli

    oh, and just to clarify the link you submitted Grudz…(nice job by the way using html tags)
    the report illustrates people’s perceptions. This is not a fact based report. Perceptions that we hold as true are biased on multiple levels, so they cannot be factual. A fact is how much money I have In the bank, a perception is that I am underpaid.
    “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. —”..fact? or perception?

  21. owen

    Teachers HAVE tried to change things but the Republicans won’t listen. And of course when they try to change CONservatives like you Grud call them whiners. Whine and swear all you want Grud but righties like you are what is wrong with this state

  22. grudznick

    Mr. Pauli, is that not the case with every goofy study linked here on this and other blogs?

    Mr. Owen, I am 100% behind good teachers getting raises. I know you don’t believe that and I am amused by your disbelief. You may continue.

  23. owen

    I believe you Grud. What is a good teacher?
    I’ve asked before and got nothing from you. I don’t want my grandchildren being taught by bad teachers. But what is the definition of a bad teacher?

  24. Wayne Pauli

    Is that a fact or your perception you are expounding on? Or, are you attempting to unboil an egg?

    nobody is more right or more wrong when it comes to perception. All men supposedly are created equal, it does not say all conservative men, or all straight men, or all white men, or all Christian men. the perception is all, even those living in Minnesota, Iowa, or any other place you are intent on soiling. As well as people working jobs that your perception is that they are not very good at, or are overpaid.

  25. Deb Geelsdottir

    Oh Grudz, Grudz, Grudz. Apparently it really ticks you off when facts continue to prove you wrong. Such language! What’s happened to your geniality?

    There are only a very few here with your level of resentment, Mr. Grudz. You’re angry at teachers, angry at school administrators, everything schools, angry at liberals, independents, disabled, basically anyone who doesn’t agree with you.

    I’m sorry to say that you’ve taught me that your jovial, “gravy & taters” language was just a facade. I thought your routine was a mask for a sharp mind, but lately you’ve displayed a meanness that’s not at all funny.

    I’m disappointed because I used to like you, but I can’t any more. Roger, you were right. I should listen to you more closely.

  26. grudznick

    It’s a fact, Mr. Pauli. Just like your statement that all people are equal regardless of where they choose to live, or for that matter, where they were born.

    You, sir, fail to realize that I am here to goad you and point out your failures, and I have done so tonight. Happy Easter to you Christians, and may the rest of you have a mighty feaster all weekend long. Just don’t whine about the results of your own decisions, and for Hell’s sake, don’t whine about things you refuse to act to change.

    Even the most heinous libbies who are true South Dakotans work to find solutions, they don’t just whine.

  27. grudznick

    Ms. Geelsdottir, you hurt me so. But then, you live in Minnesota. So your opinions really don’t matter here in South Dakota.

  28. Lynn

    I’d say that most of the kids I knew from private and public schools plus college live in Minnesota especially in the Twin Cities metro area. They seem to be established, prospering, happy and with their families there. Will they move back to South Dakota? Highly doubtful though they either come back to visit their parents or their parents move to Minnesota to be near their kids and grandchildren once they retire.

    If you read the SDGOP spin and it really is spin you would think cars would be backed up in a massive traffic jam trying to cross the border into South Dakota when reality is South Dakotans are still moving to Minnesota for better opportunities.

    South Dakota is not really on the radar being an economic threat to Minnesota though they market to South Dakotans for tourism, Twins, Vikings and shopping getaways. Minnesota is too busy having fun comparing it’s success to the the failed policies of Governor Walker.

  29. Deb Geelsdottir

    Hahahahahahahaha! Perfect Grudz. Exactly what I expected.

  30. Roger Cornelius

    Deb,
    South Dakota’s republican sheep would do well to listen to you and your fantastic governor.

    States bordering South Dakota are important in measuring many demographics and states achievements, including the topic of this thread, taxes.

    The challenge we have as Democrats in this state is to detoxify or deprogram the grudz’s of this state. Big money dictates to even lowliest republicans of this state and they usually vote against their own self-interest, that’s why I call them sheep. As long as a states republican talks family values, god, guns, anti-abortion, etc. they will vote for Rounds, Thune, and Noem. Never mind that the only thing that these three deliver to this state are welfare dollars from President Obama.

  31. grudznick

    Mr. C, you are and always have been a swell fellow. A native South Dakotan, just like me. Both of us wanting what’s best for our state. I still owe you that breakfast. I’ll mail you the gift certificate. You can bring a guest, too. Maybe my friend Bob and you would have an interesting breakfast.

  32. Deb Geelsdottir

    Roger, there is a hilarious hash tag on Twitter, #ThingsJesusNeverSaid. It’s being used to parody (ir)Religious Right excuses for prejudice, abuse of the vulnerable, Prosperity Gospelers like Osteen, warmonger like Darth Cheney, etc. It really is very funny and sharp.

  33. Let’s clarify Grudz’s B.S.

    At no point has Grudz said anything to refute that Minnesota has a less regressive tax system than South Dakota.

    At no point has Grudz said anything to refute the analysis from the study that less regressive tax systems like Minnesota’s appear to enjoy better economic outcomes.

    Grudz throws out one link about something else as cover for taking the same jabs as usual and forcing responses into his usual, paltry collection of retorts.

    Grudz, I find your rhetoric tiresome and uninstructive.

  34. Roger Elgersma

    Grudznick, In what way did I throw in the towel.

  35. SuperSweet

    Athol is in northern Spink County, not too far south of Aberdeen. Cory, you should motor or ride your bike down there and check it out. Don’t take 281, there are some little traveled county roads that can get you there.

  36. bearcreekbat

    By imposing sales tax upon low-income folks, which in turn takes a portion of their minimal share of public benefits, South Dakota taxes itself, which seems a bit backward. And what is this crazy fear of a progressive income tax anyway?

    A truly progressive state income tax is not going to cause any real pain to the high income earner because that earner makes more than enough to live a great lifestyle, and save for retirement, even after paying a high income tax. And since a progressive income tax is, by definition, designed so that the low and moderate income families pay little or no income tax, it certainly would benefit these families by providing needed funds for the state’s teacher problem and infrastructure problem.

  37. mike from iowa

    I live on SS and get just over $11,ooo per year and pay at least 7% sales tax in iowa. Plus state fuel tax went up a dime recently. I just don’t waste alot of gas driving around and buy stuff in larger quantities. Personally,I’d prefer to be young,good looking and rich and then squawk about being taxed too much. Taxes are the price one pays to have socialist police and firemen and teachers,etc. I don’t get enough in SS to warrant paying income taxes and that is what pisses off wingnuts.

  38. bearcreekbat

    mfi – your circumstances underscore my point exactly! It seems so counter productive for government officials to enact laws that transfer tax dollars to SS recipients, but then turn around and take a portion of those same dollars back for other public purposes.

  39. mike from iowa

    I’m not complaining about being taxed. We all need to contribute. I just don’t like being considered a dead beat or a leech for being on SS. Afterall-most of us pay in to it our entire working lives and if you are on the poorer end of the pay scale,every dime of income is taxed for SS and Medicare.

    OTOH,Im not gonna let some wingnut’s opinion of me ruin a perfectly beautiful day,no matter how bad the day really is. Kindas thrills me to the marrow to see self righteous tools with major league heartburn over my very existence. :) :)

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