KSFY notes a new WalletHub table showing that South Dakota ranks 44th for state and local tax burden. Our friends in the People’s Republic of Minnesota rank fifth, with the highest tax burden as a percentage of personal income in the septa-state region:
| state | total tax burden | total rank |
| Minnesota | 10.37% | 5 |
| Iowa | 9.32% | 14 |
| Nebraska | 9.17% | 17 |
| North Dakota | 8.69% | 22 |
| Wyoming | 8.03% | 37 |
| Montana | 7.64% | 42 |
| South Dakota | 7.22% | 44 |
The absence of an individual income tax keeps South Dakota toward the bottom of state tax burdens. However, our property tax burden is the national median of 2.90%, and our sales and excise tax burden is well above the national average of 3.51%.
| state | property tax burden | property tax rank | individual income tax burden | income tax rank | sales & excise tax burden | sales & excise tax rank |
| Minnesota | 3.00% | 20 | 3.70% | 4 | 3.67% | 21 |
| Iowa | 3.43% | 16 | 2.50% | 20 | 3.39% | 27 |
| Nebraska | 3.83% | 10 | 2.39% | 24 | 2.95% | 40 |
| North Dakota | 2.20% | 41 | 1.28% | 41 | 5.21% | 4 |
| Wyoming | 4.17% | 7 | 0.00% | 44 | 3.86% | 18 |
| Montana | 3.55% | 13 | 2.69% | 15 | 1.40% | 46 |
| South Dakota | 2.90% | 24 | 0.00% | 44 | 4.32% | 10 |
Our property tax burden isn’t much different from that in Minnesota. We take more sales tax out of residents’ hides than every other state in the region except for North Dakota.
Having the tenth-highest sales tax burden in the country is another indicator of South Dakota’s commitment to taxing the poor more than the rich. By my rough calculation, we could drop our sales tax burden to the national average by dropping our state sales tax to 3.28%. We could replace that lost revenue with a 0.81% flat income tax, or a flat 1.62% income tax on only the top half of income earners, or some fairer progressive scheme exempting income below the poverty line and scaling up by income bracket to average out to a 0.81% share of statewide personal income. That replacement of some sales tax with a piddly income tax that for many would be a tenth of what Minnesotans pay would make South Dakota’s total tax system more fair and still keep us at 44th in the nation for total tax burden.
Plus, as Donald Pay reminds us on this morning’s other tax-related post, state-based sales tax is obsolete! Income tax would be easier!
The reason that so many South Dakotans vote like rich guy wannabees is because that is their only chance that they can see.
The numbers is the chart for MN sound so much worse than what you actually see taken out of your paycheck. Probably because I get paid so much better than what I ever would in SD. Sure there are plenty of crappy jobs here just like in SD, but if you have a college degree in the right field you will find a decent paying job. If you don’t have that college degree, find a Union job. They pay wages that SD factory workers could only dream of.
Degrees in the healthcare field pay very well in MN. IT also pays well but I would have to say healthcare jobs here are among the best paid in the nation.
As for teachers, MN ranks right in the middle amongst the states. Having a masters in Education
will definitely help and put you in the $75000 range.
Even MN State legislative pay puts SD embarrassingly in the dust. $40000 for being in St Paul four months of the year PLUS a per diem.
What Jenny said.
And, we pay taxes and we have the good services to show for it. Check just about any quality of life index. I’m very glad I live in the “People’s Republic of Minnesota.” 😁
The above tax burden figures are based on each state’s income, but as Jenny says, Minnesota pay may be so much higher than South Dakota pay that one doesn’t notice the higher percentage one pays in taxes, especially not when, as Debbo notes, one gets better public services.
In January, I reported that median for workers with BAs was $42K in SD and $59K in MN. Take 7.22% out of $42K, and the median SD BA-holding worker is left with $39K. Take 10.37% from $59K, and the Minnesota counterpart is left with $53K.