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Our View: State's taxes help support high quality of life

Minnesota’s tax structure contributes to a superior quality of life, evidenced by top three rankings from U.S. News and World Reports, Politico and CNBC.
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Detractors have been saying for decades that Minnesota’s state taxes are too high for businesses and individuals alike.

Despite that, the state keeps attracting educated and energetic newcomers, keeps producing successful startups, and consistently leads the Midwest, if not the nation, in any number of quality of life measurements.

Which leads us to conclude that Minnesota’s taxes are high, but not too high.

The latest report comes from Kiplinger’s, the finance magazine, which concludes that Minnesota is the least-friendly tax state in the nation.

Well yes, if only taxes are taken into account, Minnesota doesn’t look that good. The income tax is above average, the sales tax is higher than many states (especially when city sales taxes are added on), and the governor and Legislature have not been able to get together on an all-encompassing tax bill the past two years.


The most tax friendly state, according to Kiplinger’s, is Alaska. But, of course, Alaska has long kept taxes on residents and businesses in check by relying on oil income.

With the oil boom slowing down, however, oil states (including North Dakota — No. 6 on the tax-friendly list), will have to make tough decisions to support state services, schools and infrastructure.

Now let’s look at the other side of the equation: quality of life. Minnesota consistently ranks near the top in "best places to live" surveys. The state was No. 2 in the 2018 U.S. News rankings, and No. 2 in the Politico rankings. CNBC ranked Minnesota No. 3 in "top states to live in," and graded the state’s quality of life as "A+."

By the way, CNBC, in a separate survey, also ranked Minnesota as the No. 4 best state in which to do business, based on quality of workforce, technology and innovation, and quality of life.

Do high taxes and quality of life go hand-in-hand? Not necessarily, but in Minnesota our taxes support good schools, an extensive health care system for even the poorest of residents, a healthy environment, an attractive arts scene and generally clean and reliable government services.

Yes, our roads and bridges are in poor shape, but then, our gas tax, which is intended, in part, to support road infrastructure, is lower than the national average.

We’re not about to diminish the impact of the state’s high taxes. But we also can’t ignore the state’s highly rated quality of life. That quality of life is an important recruiting tool for businesses, and will continue to attract the best and the brightest to Minnesota, despite high taxes.

Related Topics: FINANCE
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