Our report this week on the tax study conducted by the Institute on Taxation and Economic Policy provided an enlightening reality check to which rural Minnesotans should pay attention (see story on page 3). While Minnesota has a reputation as a high-tax state, the study highlighted the fact that Minnesota’s state and local tax structure is remarkably different from other states, and that for many Minnesotans, particularly those in rural parts of the state, Minnesota is one of the lowest-taxing states in the U.S.
We recognize that runs counter to conventional wisdom, and it also runs counter to the way things used to be in Minnesota. But incremental tax changes, pushed by the DFL over the past decade, have done more than any other state in the country to put the burden of taxation on those who can most easily afford it. According to the report, Minnesota households making less than $60,800 per year enjoy the lowest state and local tax burden in the country, an average of just 7.1 percent of their income.
Those supposedly low tax states like Texas and Florida? That same family would pay nearly twice as much in state and local taxes in those places as in Minnesota. For working class folks, Minnesota is a veritable tax haven, one that saves them thousands of dollars a year. In Florida, a household earning $60,000 a year would, on average, pay $7,920 a year in state and local taxes. That same household in Minnesota would pay just $4,800, a savings of more than $3,000 a year, according to the study. That’s the value of a progressive tax system to working families. It’s an approach to taxes long advocated by the state’s DFL, and staunchly opposed by Republicans. There’s a reason that red states tend to hit the working class the hardest in terms of taxes. The GOP has long favored a tax system that minimizes the use of progressive (based on ability to pay) taxes, like income taxes, in favor of the most regressive taxes, such as sales taxes, government service fees and fines.
A progressive tax structure isn’t the only way that DFL policies have helped working class people in Minnesota. In the last legislative session, the DFL-controlled Legislature funded universal free school lunches, which provided a substantial savings to families with kids in school, particularly the middle class who didn’t otherwise qualify for free or reduced lunches. A family with two kids in school could easily spend $200 a month, or more, for school lunch. Over the course of a school year, that would save that middle class family about $1,800. This past session, the Legislature also approved hundreds of millions of dollars to create more subsidized slots for child care as well as provide for pay increases for child care workers.
These are just some of the more recent changes. But over the past few decades, during times when the DFL has controlled the Legislature, the state has enacted policies that substantially equalized school funding and brought down the burden of school taxes on families. The implementation of MinnesotaCare provided hundreds of thousands of Minnesota families with extremely affordable and comprehensive medical insurance coverage.
That long history of DFL-led government in Minnesota has been great for the middle and working class, but it’s been good for business and the wealthy at the same time. The advantages of a state that invests in its people and their education is that private business tends to thrive. Minnesota’s economy has enjoyed remarkable strength, in part because we have a well-educated workforce that has made Minnesota an attractive location for some of the country’s largest corporations.
It’s worth noting that there was a time when Republicans helped play a role in Minnesota’s success. The GOP used to line up with DFLers when it came to funding for things like education. It’s also worth noting that it was Republican Gov. Arne Carlson who signed MinnesotaCare into law. But those moderate Republicans, and their sincere focus on issues of importance, are virtually gone. Former Gov. Carlson is considered an apostate in the state’s MAGA-dominated GOP today. That wing of the party is interested in power but has no policy agenda other than fighting whatever the other side is for, usually through misinformation. They focus on invented hot button topics, like the new state flag, the wolf population, or guns, in hopes of getting Minnesotans to vote with their emotions rather than their heads. When it comes to addressing the major issues that actually affect the lives of Minnesotans, they’re fresh out of ideas. When they’ve had power in recent years, they’ve accomplished nothing for Minnesotans. Absolutely nothing.
That’s something Minnesota voters should consider when they go to the polls this fall. Sound policy at the Legislature can make a real difference in peoples’ lives.