Minnesota governor proposes 13.95 percent state income tax, highest in the U.S.

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Vying for the top spot in how much states charge their residents in income taxes, newly-elected Democrat Gov. Mark Dayton proposed on Tuesday that the tax rate in Minnesota be raised from 7.85 percent to 10.95 percent for couples earning over $150,000 and single filers making over $85,000. In addition, a special 3 percent surcharge would be assessed for the next two years on those earning more than $500,000.

The new taxes were part of Dayton’s proposed two-year budget of $37 billion. The $2.9 billion that the added tax would generate in revenues would only partially offset the projected $6.2 billion budget deficit.

GOP leaders say that the increased tax would be the highest in the nation by far, and drive wealthy taxpayers from the state. The highest rate currently charged in any state is 11 percent, by Oregon, which does not have a state sales tax, and Hawaii.

Dayton’s budget proposes an increase in spending of 7.5 percent during the next two years, although Republicans said that the figure was closer to 22 percent after taking into account $2.3 billion in federal stimulus monies and $1.9 billion in delayed school payments, the previous governor, Tim Pawlenty, used to balance the state’s budget.

Dayton also proposed a state property tax on all homes valued at more than $1 million.

House Speaker Kurt Zellers said “This budget is detached from the reality that every other state has recognized.”

Pioneer Press

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