Jim Robins is a former Minnesota Senate Majority researcher assigned to taxes, metropolitan and local government, and transportation issues. He currently operates www.ScooterMaxi.com.
Minnesota's relatively progressive personal income tax masks the fact that the state is not a leader in progressive taxation, and the trend shows we are gradually getting more regressive over time.
Those are the unfortunate major conclusions we can draw from the 2009 Minnesota Tax Incidence Study. While we are not yet sure about the reasons, we know all major taxes are sliding toward greater regressivity (i.e. the poor and middle class paying a greater share of their income, the rich paying less). Addressing this worsening situation should be a high priority as we also look at tax policy to encourage business growth and replace declining revenues.
With some drama, we can say the Minnesota system has arrived at its regressive worst in the two decades since we started studying tax incidence. In fact, we saw an unprecedented doubling in regressivity from 2004 to 2006