Yesterday, I asked “What would a genuine ‘affordability’ agenda look like?” I noted that “the most direct way possible” for Minnesota’s state government to ease affordability concerns for its citizens would be to reduce “the amount of money it forces them to pay in taxes.”
The big picture
Taxes are a bigger squeeze on affordability in Minnesota than in most other states.
As Figure 1 shows, in 2025, Minnesota’s General Fund revenues totaled 7.0% of the state’s Personal Income. This was the fifth highest share in the United States.
Figure 1: General Fund revenue as a share of Personal Income, 2025
Minnesota’s tax burden ranks 8th out of fifty states on a per capita basis, as Figure 2 shows. Furthermore, this high burden is broad based. Across the four categories the National Association of State Budget Officers (NASBO) breaks its figures for General Fund Revenues down into, on a per capita basis in 2025 Minnesota’s burdens ranked 16th out of fifty states for the Sales Tax, 6th for the Personal Income tax, and 3rd for the Corporate Income Tax.
Figure 2: General Fund revenues per capita, 2025
What about the middle class?
It is well known that Minnesota has the 6th highest top rate of state personal income tax in the United States. It is, perhaps, less well known that this rate kicks in at a relatively low level of income. While Minnesota’s top rate of 9.85% for a single filer kicks in at $203,150, that of 4th placed New Jersey (10.75%) and joint 7th placed Washington and Massachusetts (10.00%) all kick in at $1 milion or more. Minnesota’s state government regards people as “rich” that most states wouldn’t and taxes them accordingly.
Indeed, Minnesota doesn’t just tax “the rich” more heavily than other states do. Figure 3 shows that state taxes due on the Average Annual Pay in each state for 2024. At 4.8 percent, the state tax levied on the average earning Minnesotan ranks above 42 other states.
Figure 3: State taxes as a share of Average Annual Pay, 2024
To paraphrase the late, great, P.J. O’Rourke, the good news is that, according to Minnesota’s state government, the rich will pay for everything. The bad news is that, according to Minnesota’s state government, you’re rich.
Minnesota’s high taxes contribute to struggles with affordability in our state. This is one area where the state government could act quickly to bring relief to hard pressed Minnesotans by cutting their taxes.
