Minnesota is known nationally as having an extremely high “death tax”. In fact, the 13% that the Government can collect assets after a person passes away is higher than any other states starting rate.
Republican State Senator Bruce Anderson and Republican State Representatives Joe McDonald hope to change this fact and remove the “death tax” completely.
Center of the American Experiment released a report titled “The Cost of Minnesota’s Estate Tax”. The report released that Minnesota actually loses revenue due to the tax making the budgetary benefits of the tax fairly marginal.
The center reports, “Using survey evidence and official data, we are able to estimate the income tax and sales and excise tax revenue the state of Minnesota loses when people leave to avoid the estate tax. If two thirds of 55 to 65 year olds and 80 percent of those over 65 who left because of state taxes left because of the estate tax, then the tax was a net revenue loser for the state government in every year from 2012-2013 to 2015-2016. Over that period, the estate tax cost Minnesota’s government $69.1 million in lost revenue, $47.3 million in 2015-2016 alone.
additionally, the Center reports that Minnesotans are loosing high paying Jobs due to this tax
Analysis using IMPLAN suggests that 1,629 jobs were lost statewide in 2016 as a result of people leaving to avoid the estate tax. This estimate is likely to be on the conservative side, as it is derived by reducing the overall income of Minnesota households with incomes over $200,000 annually by $348.7 million (the number of residents leaving because of the state tax in 2016 multiplied by their median taxable income).
In the Senate, the bill is referred to the Taxes committee. The Chairman of the committee is Roger Chamberlain who is listed as a co-author on the bill.
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