In Minnesota, we’re smart and taxed
The good news is Minnesota is one of the smartest states in the United States. The bad news is we’re also one of the most taxed states.
Two studies were released back to back — purely coincidental we’re sure — where states are compared in education and taxes. The good news first.
The Washington Post crunched the numbers to come up with the smartest states in America using objective measures including IQ, SAT and ACT scores and the percentage of college graduates in the state.
“To create an intelligence score, we determined the percentage-point difference between a state’s score and the national median score. Then, since IQ seemed to be the most on-the-nose metric, we doubled that value and then added it all up,” the Post explained.
Granted all this number crunching was done for a different purpose, but bottom line is, they got the numbers for us.
Minnesota was named second smartest, just behind Massachusetts, and followed by New Hampshire, Connecticut, Wisconsin, Kansas, Vermont and Iowa. The bottom five states were Florida, Alabama, Mississippi, Nevada and, in the 50th spot, Hawaii.
So yay, we’re smart!
And now for the bad news.
Minnesota was ranked 47 out of 50 in the newly released 2016 State Business Tax Climate Index from the Tax Foundation. This means that the state has the 4th least favorable tax climate in the country.
“Our state’s abysmal tax rating shows that Minnesotans are taxed far too much and I can see why: it seems every chance they get our state leaders are trying to raise taxes,” Americans for Prosperity Minnesota State Director Jason Flohrs said.
“Between proposals for a 16 cent gas tax increase last session, and billions of dollars of income and sales tax hikes in recent sessions, Minnesota’s tax climate is holding back our economy and getting in the way of job creation and economic prosperity.”
Those coming out worse than Minnesota in this study are California, New York and the worst, New Jersey.
The Index explains that the states in the bottom 10 tend to have a number of afflictions in common: complex, non-neutral taxes with comparatively high rates. New Jersey, for example, is hampered by some of the highest property tax burdens in the country, is one of just two states to levy both an inheritance tax and an estate tax, and maintains some of the worst-structured individual income taxes in the country.
Glad we’re not in New Jersey at least.
On the flip side, the top five states for tax system are Wyoming at No. 1, followed by South Dakota, Alaska, Florida and Nevada.
The absence of a major tax is a common factor among many of the top ten states, the study says. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax, or the sales tax.
Wyoming, Nevada, South Dakota, and Texas (No. 10) have no corporate or individual income tax (though Nevada and Texas both impose gross receipts taxes); Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire (No. 7) and Montana (No. 6) have no sales tax.
So, it’s good we’re so well educated so we can get jobs and pay all those taxes.