The budget battle is heating up between liberals and conservatives in St. Paul regarding the best plan to erase the budget deficit (approx. $5.2 billion) and fund State Government during the next biennium. The fundamental debate revolves around the choice between spending constraints vs. tax increases.
Governor Dayton and his liberal supporters have proposed a "tax the rich" solution. Conservatives, on the other hand, believe taxes and spending are already at unsustainable high levels and that further tax increases would seriously damage the state's fragile economy. To determine which argument has most merit, a careful analysis of non-partisan, factual data sheds significant light on Minnesota's tax and spending policies vs. national average and comparable surrounding states.
The U.S. Census Bureau maintains a non-partisan data base which summarizes each state's population as well as total taxes and fees that each state collects to fund essential services. Recently released U.S. Census Bureau Data reveals that Minnesota's current population is 5.3 million ranking 22nd out of 50 states. In 2010, Minnesota collected $17.2 billion in total state taxes ranking 12th highest in the nation in absolute dollars. To provide a fair comparison with national average and comparable states, it is necessary to utilize "per capita" data rather than absolute dollars only. In 2010, Minnesota extracted $3,245 for every man, woman and child in total state taxes. This ranked Minnesota 5th highest in the nation on a per capita basis. By comparison, the per capita national average for all states combined was $2,282. In addition to exceeding the national average by $973, Minnesota's per capita tax also exceeded Wisconsin ($2,527) by $718, Iowa ($2,235) by $1010 and South Dakota ($1,602) by $1,643.
In addition to the excessively high individual tax burden, Minnesota's tax policies also negatively impact small business owners. Based on a recently released study completed by the U.S. Small Business Council, Minnesota ranks 2nd highest in the nation in total small business taxes. As a result, Minnesota has gained well deserved recognition as a "hostile" taxing state for both individuals and small business owners.
The bottom line; Minnesota does not have a revenue problem; rather, Minnesota has an "out of control" tax and spend problem. Your voice is important. Contact your elected representatives and let your feelings be known.