The tax plan proposed by Gov. Tim Walz would hit lower income Minnesotans harder than wealthier earners.
That's the outcome of analysis by the Democratic governor's own Department of Revenue, which carried out a tax incidence analysis of the
Walz's plan includes, among other things, a reduction in state income taxes but increases in business, estate, gas and vehicle sales tax, among other changes.
According to the revenue department, the overall tax burden on Minnesotans would increase from 11.63 percent currently to 12.39 percent under Walz's plan, an increase of 0.76 percent.
However it's the lowest earners who would see a bigger increase in their taxes.
Currently, those earning $14,528 and under have a tax burden equivalent to 27.61 percent of their income. Under the changes, it would increase to 29.98 percent – an increase of 2.37 percent.
This effectively works out as an extra $2.37 in tax for every $100 earned.
In contrast, those earning $185,601 and over would see their overall tax burden increase from 11.23 percent of current income to 11.72 percent, just 0.49 percent more.
It's even less for those earning more than $636,248, whose burden would rise by just 0.38 percent of income.
The 20-cents gas tax hike – which has proved controversial since suggested by Gov. Walz – would disproportionately impact lower-income earners as the tax is applied equally.
The same goes for the 0.376 percent increase in motor vehicle sales tax, which would also be imposed no matter what your earnings, albeit higher earners would likely pay more of it as they'd likely buy more expensive vehicles.
Gov. Walz sought to soften the blow of the gas tax on lower earners by increasing the working family tax credit for all who qualify for it by $100 – and $200 for those filing jointly, but it doesn't wipe out the additional burden on lower income earners.
In response to a Star Tribune request for comment, Gov. Walz's office said that it would be the lower income Minnesotans who benefit from increase spending in education, roads and health care.
"Minnesotans agree that every child deserves a high-quality education, that we need to lower the cost of health care and that we need to fix our crumbling roads and bridges," spokesman Teddy Tschann said.
"Gov. Walz proposed a budget to improve the lives of Minnesotans and explained exactly how he’ll pay for it."