MinnPost: Is Minnesota’s Tax System Unfair?
media mentionThe Institute on Taxation and Economic Policy’s regular assessment of state taxes concludes that just five states and the District of Columbia have positive scores on progressivity: California, Delaware, New Jersey, Vermont and Minnesota. The progressive systems rely less on consumption taxes and more on income taxes, with rates that increase with wealth. They also have features to benefit lower-income people, such as refundable earned income tax credits, which give money to taxpayers even if they don’t earn enough to have taxes due. “Thoughtful, progressive tax policy decisions permitted these six jurisdictions to make their tax systems somewhat more equitable for those with the least ability to pay,” the report concludes.
Carl Davis, the research director at the Washington, D.C.-based Institute, said Minnesota does better than most states. But he also says “that’s a very low bar.”
“Most states have steeply regressive tax systems where you’re asking the most of those who have the least. It runs counter to most people’s perception of fairness,” he said. “If you stack up Minnesota next to most states, it looks better than most — no doubt. But you have to keep in mind what most states look like, and it is definitely not the case that Minnesota has a robust, progressive tax score.”