Income Tax Comparison Study
Full name: "42-State Individual Income Tax Comparison Study"
Latest Edition: 2003
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Non-Member Price: $100 ($107 w/sales tax) Add the companion Property Tax Study and get both for only $180! ($192.60 w/sales tax) |
Members: Previous Editions
Note: The price on the PayPal purchase page will reflect a 7% Minnesota state sales tax.
| Name | Year | Price |
|---|---|---|
| 42-State Individual Income Tax Comparison Study (1999) | Payable Year 1999 | $15 |
| 42-State Individual Income Tax Comparison Study (1997) | Payable Year 1997 | $15 |
| Previous years' Income Tax Studies, both years | $25 |
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PRESS RELEASE: MTA’s Research Arm to Update National Property and Income Tax Studies
With a commitment to improve upon the stellar record of two nationally recognized comprehensive comparison studies, the Minnesota Center for Public Finance Research, MTA’s research arm, has updated its property and income tax national comparison studies in time for the 2005 session, for taxes payable in 2004.
[Note: We want to alert our members and other interested persons to the opportunity to contribute toward these two studies. Read about them below, then consider a tax deductible contribution to our Minnesota Center for Public Finance Research to get these studies in the public arena before the 2005 legislative session. Call me or Mark Haveman, our Development Director, if you have any questions. -Lynn Reed]
Property Tax Study
The best known of these studies, the 50-State Property Tax Comparison Study, was first unveiled in June of 1996 for taxes payable in 1995. Over the course of that summer, nearly every major daily paper in the state carried an editorial about the onerous property tax burden of commercial and industrial properties that our study documented empirically for the first time. With that quality of research available, it is not too surprising that serious property tax reform began to be undertaken in the 1997 session.
What do we mean by serious? In our judgment, no reform proposal was serious that did not narrow the wide gap between homeowner and business property taxes for the same market values. That narrowing began during the 1997 and continued right through the landmark reform of the 2001 session, proposed by former Governor Ventura and only slightly modified by the legislature. Reformers were bolstered with measures of progress and a look at how far they still needed to go by checking our property tax study updates for taxes payable in 1998, 2000, and 2002. This final year, released in May of 2003, is more a documentation of how much reform has been achieved.
The latest study is for property taxes payable in 2004. The previous studies used the same assumptions for all three updates, but this study re-examined our assumptions to make sure they were still valid and likely use different market value examples. It was also done in closer cooperation with several of our sister organizations as part of the National Taxpayers Conference, and included additional cities to accommodate other states’ interests.
This study is the only one like it that we know about. It locates parcels of property for four different classes of property (residential homestead, apartment 4+, commercial, and industrial) in the largest city in each state and a few others, and calculates the property taxes for several different market values for those parcels. We also calculate the taxes for smaller rural cities with typical tax rates for each state. The values are adjusted for differences in assessment practices.
It is a powerful tool for comparing the property tax systems of the 50 states to one another while taking into account various levels of quality of assessments. We also calculate taxes on the median selling price of homes in the largest cities around the country, to give an idea of how the combination of values and taxes affect the cost of owning a home.
Income Tax Study
It has been four years since our Individual Income Tax Comparison Study has been done. The Minnesota Department of Revenue (DOR) used to be the primary producers of this study, done every three years by their Research Division through most of the 1980s and 1990s.
As the 1999 legislative session approached and it appeared likely that income tax cuts would at least be on the table, MTA learned nearly simultaneously that 1) DOR was not going to do a study for 1997 and 2) that we would be able to do the study ourselves.
We worked closely with DOR to develop taxpayer profiles and appropriate income examples for three filer types. As a result of this careful work, it became clear to the majority of lawmakers that the only appropriate way to cut tax rates was to cut them for all income levels. Before our study, there was significant pressure to cut rates only for lower incomes.
For the 2001 session, we provided an update on our income tax study for tax year 1999. We were able to show that for higher income singles and families, Minnesota still ranked in the top 10 states with a significant income tax.
Our goal this year is to produce a re-benchmarked study for tax year 2003. We worked with DOR again to develop all new taxpayer profiles. In calculating taxes for other states, we again adjusted property tax and mortgage interest deductions based on data from our 50-state property tax comparison study that shows different levels of property taxes and home values. We will also prepared the income tax study in close cooperation with our fellow National Taxpayer Conference members from other states, and add features that will be particularly useful for them as we are able to do so.
The study includes income tax calculations for 10 income levels for single taxpayers, single head-of-household taxpayers with 1 dependent, and married filing jointly households with 2 dependents, using standard and itemized deductions when appropriate, as indicated by our taxpayer profile data from DOR.
The Bottom Line
Both these studies have been completed in plenty of time to analyze as part of the major budget session of 2005. They will be a significant part of the debate on whether tax increases are appropriate or not. We have enjoyed the research, and are pleased to present our results to an interested public.