Individual Income Tax Comparison Study

In 2023 Minnesota’s income tax system underwent one of its more consequential transformations in decades restructuring tax burdens and effective tax rates among Minnesota income tax filers.

That is why we are launching a campaign to fund the two phases of an update of our national individual income tax comparison study.

This study is not a comparison of statutes and marginal tax rates. It reconstructs how the average Minnesota tax filer at different income levels actually experiences the tax system, using simulated returns built from Department of Revenue taxpayer profiles. 

(Link to the 2021 Edition for Taxes Payable 2018)

Phase 1 -- Minnesota Results: Comparing payable tax year 2023 results with the findings from our previous study based on tax year 2018, the study will examine how the state income tax changes affected the tax burdens and effective tax rates paid by five different Minnesota filer types at ten different income levels.  It will also inform:

• how the structural progressivity of the state income tax has changed based on "effective tax rate differentials" -- the difference between effective tax rates at higher and lower income levels
• how state changes to the working family/child tax credit have impacted different filer types and income levels 
• how the combined state and federal tax burdens of Minnesotans has changed 
• how "replacement ratios" have changed  -- how many more of a certain filer type is necessary to make up for the revenue loss from the departure of another filer type.

We want to have this Minnesota analysis completed to inform the 2026 legislative session.

Phase 2 -- National Investigation: This report historically has been a national investigation allowing rankings and comparisons with the other 41 states and the District of Columbia that have a state individual income tax. Our goal is to raise enough support to also complete the national analysis by the start of the 2027 biennial budget session, enabling state benchmarking of burdens, rates and credits.

Phase 1: Minnesota Results: $15,000
National Report $60,000
TOTAL FUNDRAISING GOAL: $75,000

Thank you for your consideration and support!