Reality Check: Do MN’s Millionaires Pay Highest Taxes?

MINNEAPOLIS (WCCO) — President Barack Obama is proposing higher taxes for millionaires to help pay for a jobs program.

In Minnesota, it’s a tax hike that could hit thousands of millionaires.

Here’s a look at Minnesota.

“It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million,” said Obama.

That’s misleading. People with more money do pay higher rates. But as a percentage of income, the top one percent of Minnesota earners pay on average 9.7 percent in state taxes. The rest of Minnesota pays an average of 11.5 percent in state taxes.

Here’s the 2011 analysis of Minnesota household and business taxes.

Here’s what you need to know: Minnesota has three times as many lakes as millionaires. About 7,700 millionaires paid Minnesota income taxes this year, but only 3,900 actually live here.

According to the Minnesota Department of Revenue, non-resident millionaire athletes and corporate executives are among thousands of wealthy taxpayers who pay Minnesota taxes on the portion of the income they earn here.

That’s not the whole story. Even though millionaires pay a lower percentage of their income in taxes, they pay a lot more in dollars.

Last year, the top two percent of Minnesota taxpayers kicked in 32 percent of all the income taxes paid.

Are the rich taxed less than secretaries?

The “millionaire tax” President Obama is proposing is exactly the same title and talking points of the “millionaire tax” proposed in Minnesota by Democratic Governor Mark Dayton.

For Republicans it was a key factor in budget talks and for them, it led directly to the government shutdown this summer. Despite that setback, Dayton said he’ll bring it back next year.

More from Pat Kessler
  • Heading south

    It’s getting cold out. Florida looks better all the time. What’s the state income tax rate in Florida or Texas?

    • Jake

      Even SOUTH DAKOTA sounds better than Florida or Texas. They have a ZERO income tax rate, they don’t have spanish speaking radio stations all over the dial, and a LOT LESS CRIME. So Pat puts out an insanely lenghty report, what 200 pages long, and he expects ALL of his readers to analyze it, LINE BY LINE, to try to figger it out?? Earth to Pat: We know what you are trying to do: Offer an overwhelming amount of *BS* data from a traditionally LIBERAL state, and try to portray that has FACT or ‘common sense’, and expect the public to buy it.

      Sorry, but I won’t. Not when I know that you are a Keillor lackey, refuse to recognize how BAD obama’s and dayton’s leadership has been, and are totally DEAF as to ANY OTHER ideas that are being aggressively presented. You should seriously consider a career change, PAT.

      • Dannn G

        If thiss is a long article yoorr really have a problem with attention span. The pile of poo coming out of Perry’s mouth is pay the workers minimal wage and the world will be fine.. Except iif you work for wages

    • Steve L

      MN is driving people away faster than they can collect taxes from anyone. The MN answer is TAX the hell out of everyone. Maybe we will all be the same…poor. Why not control the spending? Get rid of the complicated tax system and tax everyone the same. Redeploy the 700,000 IRS emp’s and stop the Medicare fraud. Bet they could earn their keep in no time. But, no, that would be too easy and makes way too much sense!
      Limit terms in office at ALL levels. Put the congress folks on the same medical and ssn systems as the rest of us. TRY DOING THAT!!

      • me

        So you think a college kid making 10.00 per hour should pay the same as a millionaire?

  • Dale Gribble

    Job creators should pay NO taxes. They make everyone else’s lives possible.

    • Matt

      Everyone is a job creator. You go to a store to buy something it creates a job for someone. Are you saying no one should pay any taxes?

      • mike

        You’re right Matt,but think about how many more jobs there would be if the what you buy were produced in the USA

        • Daisey43

          I agree You all should be watching ABC nightly news, their having great segments on buying American products only, very interesting on how many jobs we would create., and about the rich pay less taxes ,, they should be paying alot MORE than they do, thats crazy, I guess I wont be voting for those idiots anymore if they don’t change their minds..

    • huh?

      Come on Dale. You know, better than anyone, that IT”S JESUS that makes everyone else’s lives possible. Right?

  • Common sense

    Job creators make everyone’s lives possible?!? Really? So if all the people were unemployed who would the employers sell their goods and services too? And who would he get to run the equipment and provide the services?

    Because, obviously employers don’t need employees.

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  • Common sense

    I think this article is confusing!

    So higher income earners pay a higher income rate, by as a percentage of income they pay a lower rate? What the heck?

    I’m taking it that they pay a lower percentage of income because of tax breaks and loopholes? So in actuallity they are not paying their fair share, just taking advantage of the system!

    • Gary

      I agree. This piece is very poorly structured and does the public a disservice. I would strongly suggest that this topic be revisited in a well researched and thoughtful manner. Maybe then there will be fewer comments by people just trying to advance a selfish and mean spirited agenda.

      • larry

        Good point Gary. What are the tax breaks that lower their taxes? This is an important piece of the puzzle. If they are legitimate right offs, then they pay exactly what they should be paying.
        When he gives a limited view of the situation, you know he is trying to back someone’s agenda.

    • Don Strei

      “Commonsense” you are absolutly right. The rich pay a lower RATE, but more dollars. They would have NO dollars except that gleaned from workers. Nothing is produced by anything but workers, like in factories, schools, hospitals,etc..

  • Common sense

    Misleading? Is 9.7% less than 11.5%? Isn’t that what the President said?

    • sid

      he was talking federal not state. the federal rate is higher the more you make. what is misleading is Obama was talking about capital gains which is a tax above and beyond income tax which again is higher for those that make more money. .

  • fkafka

    Pat Kessler is misleading us,
    The title of his article suggests he’s speaking about Obama and federal income tax. Here Obama claims the rich are taxed at a higher percentage – I do my taxes by myself and see the tables – the percentages are higher the more income you show. Kessler, reading between the lines beneath the misleading title speak about Minnesota State Taxes. Obama will kill what’s left of the American Dream my grandfather had when he canme here. Wny not have a flat tax on income and don’t tax anything else – and don’t tax business’ because the owners/stockholders are getting taxed on capital gain and employees are getting taxed on income from the business. Figure out the percentage that we must pay on income alone and make the same for everyone and gradually getting rid of all subsidies and deductions. Lump in all current Medicare and Social Security into Fed income tax and eliminate the caps on income..

    • Ron Paul 2012


  • lars

    Oh so the middle class and thepoor are nothing more than mere servants for the wealthy? Must be that Republicans are secertly working for the Queen to return the US to the Brits. Just remeber there are far more middle class and poor then there are wealthy.

    • Common sense

      Again, I’m confused by another argument here. I don’t see anything in the article or comments that says the middle class and poor are servants?

      These completely out of the park comments only serve as rhetoric, and smoke screen the topic.

      • Yeah

        Yeah, I had to look it up since the story is headlining Obama and a fed tax and CCO decided to talk about the state tax. I was also confused!! Here’s the info.
        For a Single tax payer, Federal taxes are:
        0-8,500 10% bracket
        8,501-34,500 15% bracket
        34,501-83,600 25% bracket
        83,601-174,400 28% bracket
        174,401-379,150 33% bracket
        Over 379,150 35% bracket
        Seems to me, they need more brackets.

        • Really

          The brackets are irrelevant. As stated above the percentage the rich pay is lower than the middle class. This is due to the deductions and other tax shelters only the rich have access to.

          • Yeah

            That’s why the story is irrelevant. MN voted it down for this budget. Obama is proposing it now. So Pat is talking about Obama’s proposal than goes off into MN. All I get from it—Seems to me MN has to figure out a better system as well as the Fed. They are both flawed.

            • leroy

              And WCCO needs to get better writters…

          • sid

            what deductions and tax shelters do the rich have that you don’t have access to?

  • Jake

    I would also say that the people in the Black Hills of SD are FAR NICER and FRIENDLY than the tree-hugging vegans in minnesota’s arrowhead. Given a choice, I would rather be in the Black Hills than in the arrowhead, and I’ve been in BOTH.

    • Paul Solinger

      Last time I checked, Jake, I-90 went west. Feel free to pack up and head out. Actually, perhaps Wisconsin would be more to your liking. They really hate the middle class and working men and women over there.

      • Sue J

        Paul, Would you like a tissue? Seems like you want to cry like a baby.

  • Jake

    Can’t wait to hear kessler speak of how ‘productive’ the unemployed are, or how it’s so necessary that we continue on with the never-ending WELFARE, at every LOCAL, COUNTY, STATE, and FEDERAL LEVEL, and how much all of these programs to our national GDP, and how much these inter-generational families have made such a great positive contribution to our society.

  • Bill

    Kessler’s report is both misleading and rambling nonsense. Let’s start with his own figure that the wealthy pay 9.7% and the rest 11.5% in state taxes. Get an elementary math book – 9.7 is less than 11.5. That is an example of what Obama said..

    Next, what is the point of spending so much time saying that some of the rich live out state? Obama was talking about the wealthy wherever they live.

    So the top 2% payed in 32% of taxes paid. Sounnds impressive, untill you take into account the fact that someone who makes 50 million is getting 1000 times someone who makes 50,000. Their 32% doesn’t seem like much,

    And you who think the millionaires and billionaires are job creators – you must also be the folks who believe professional wrestling is real. They are the folks who lay off honest workers and send jobs overseas. They are the ones whose business fails under their leadership and and get away with a big bonus while the workers get nothing. This is not class warfair, just the facts. Borders books is the latest example.

    Pat, you need to come back with a report on this subject that makes sense. And you folks who talk about moving to another state – please go.

    • thesuperman

      Bill, No poor person has ever given me a job. Borders went out of business due to the internet. Why would I go buy a book at Borders when I can find a used one for half the price or lower and then have it sent right to my house for $3? I did not have to use any gas driving to Borders.

    • SUe J

      well said Bill

  • Gary

    Pat, take another swing at this. I know you can do better.

  • DamnAngryModerate

    This story adds nothing to the average person’s understanding of how the tax system has been rigged against people who work for a living. I checked three dictionaries for the definition of “millionaire”. They all define it as “possessing a million of a unit of currency”. Let’s make it even more clear; I’m talking about US dolllars now and I am in fact a “millionaire”. I didn’t earn a million dollars in income last year and I don’t see why that seems to be the definition of millionaire. Nobody anywhere in the media will admit the basic fact that, not only do the people who sit on their ass all day (like me) collecting investment income pay a 15% federal tax rate; they can write off their losses against the gains and eliminate ALL their federal tax liability. Who cares about the state tax rate when I’ve already reduced my tax liability by 2/3rd.

    • Reality sucks


  • Sue J

    Kessler is a joke as a reporter. He spins things better than most people running for office. Don’t know why WCCO even keeps him around. Poor story WCCO! I thought WCCO got a new News Manager?

  • Common sense

    Thanks DamnAngryModerate,

    That makes a whole lot more sense. WCCO, please use that type of structuring to make your point. Concise argument/s with concise facts. It comes off a lot more cleaner.

    My english teacher would have me rewrite my papers over about 3 or 4 times and reduce and simplifying the wording and structure of every sentence before excepting the paper for grading.

    As my teacher quoted Zinzer; “Simplify, simplify, simplify!”

    It’s that easy.

  • Common sense

    I guess the point of this article again comes to where should the burden of State’s and Federal Gov’t budget short comings come from.

    It either will come from the middle class or the rich. And since it’s probably easier to fix the budget by cutting, (which seems to already have happened for school districts around Minnesota) this taxation thing may become mute.

    Just remember everyone (both rich and middle class, and poor), everything comes around. Usually not in the same way as you give it, but it does come around. Slash budgets and you increase class room sizes, eliminate unique tools and programs to better prepare our kids for the digital high tech. age we are now deeply in.

    Eliminate special programs to keep the focus on troubled kids, and help them integrate them into society, you’ll end up with more problems, larger prisons, and shelling out more money there.

    Just remember people don’t work in Social Services or teaching because they want to make a lot of money. At least I hope that they don’t have that delusion. They do it because they want to make a difference in a youg person’s life and perhaps feel a little better about themselves.

    Every Business owner I’ve talked to (both big and small), and I’ve talked to a lot of them, is in business to make money. Period! Do they want to cut jobs when times are tough? No of course they don’t! Who would like to tell someone they are fired? But their sole purpose is to make money.

    It’s also true that some people take positions solely on making more money. No doubt there either. But the difference is what they end up doing with the money that I believe is more important to the whole (nation, people, ect..). Track the money and you’ll find which side of the fence you’re on.

  • Douglas Julius

    I quit watching the local fox news when Heidi Collins blindsided Mark Ritchie. When i saw this report i thought you were out of line Pat. and i actually said “republican shill” the problem at the legislature state and federal is the obstructionist republicans. and you really didn’t get that did you? what have THEY done to offer one dam (indian half penny) wit of help in improving my life? I’m done. gonna watch KARE from now on.

  • Big Fat Paulie

    Just wondering how taxes are enough? And what is Obamas version of “thier fair share”? Oh wait I know its when I have no money left and supporting the 46% of the country taking thier Obama paychecks. Its about time people start picking themselves up and doing it on their own, its not the governments job.

  • Greg

    What about a flat tax? Wouldn’t that make more sense?Cut and dry. Everyone pays rich and poor.

  • jim dillon

    I’d like to weigh-in on taxing the “wealthy”. The reason given for tax breaks for the wealthy is that it allows them to invest and thus create jobs. How about this idea? When the wealthy create a job, they recieve a “Tax Credit” equal to the amount that job will pay in taxes. If they fail to create a job, they have to pay the amount that job would have paid in taxes. Either way the government gets the money it needs, and there is a real incentive for the wealthy to create jobs, which is what this country really needs.

    Oh, by the way, I’ve been a small business owner and employed people for over 28 years.

    Seems like a practical idea to me.


  • Kerry

    Pat it’s time for a Reality Check on your story. It is not misleading it is completely inaccurate. The President is talking about Fedral taxes. You are talking about state taxes. State taxes and Fedral taxes are two completely taxes. So not only is this story incorrect so is your followup mailbag story. You need to do better fact checking before you run anymore stories. The President deals with Fedral taxes, The Govenor’s deal with State tax issues. Federal and State taxes are two different tax systems.

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  • Tom

    I always respected Pat Kessler as a reporter…that time has passed..Pat you should go join FOX…since you’ve decided to throw 99% of us under the bus…nuff said!!!

  • Chilly in MN

    I’m getting so frustrated with this topic, because everyone is twisting around their logic to defend their position. People keep saying “easy math 9.7% is less than 11%” – but that completely avoids the “fairness” conversation. If someone makes $50,000 and you send them a tax bill for $5,500 – they will pay it. If you sent them a tax bill for $97,000 (that’s what the million dollar guy pays) they couldn’t pay it and would choke. So now who’s paying “the same?” Do high income earners really use more services from the state/fed? Really? We renew our car tabs, send the same # of kids to school, drive on the same roads, etc.

    If we reversed the tax system around and just took the tax bill of the state of MN annually and divided it out amongst people who can pay taxes – the bill would be so high most of us would choke on it, but “thanks” to high income earners to who cover most of the bill – we can afford it.

    Seems to me that instead of getting bitter towards the high income people out there in the state, we should have some level of thankfulness for them paying most of the tab for us – instead of saying they don’t pay their share.

    I also don’t like the rich people saying they are creating jobs when they are not paying taxes…don’t buy that either, it’s just another avoidance tactic of the conversation. I know plenty of very wealthy people who haven’t created any jobs apart from that they buy stocks and bonds that do fuel the economy, but in different ways – but not in some way that’s going to fuel new job growth cause they are all going to say “whew, i’m paying less taxes – i’m going to hire 10 people…”

    Back to my original thought. I think if the “poor” people who say they are paying more taxes (percentage NOT $$) – had a bigger bill, then it would cause them to question where we are spending our money as a government – and get them more invested in the political and budget system – and to scrutinize what/where/why/how we spend everyones hard earned tax $$. Just passing the tab down the table to the guy who can afford to pay more for more of the meal – avoids the conversation about what we are all ordering once the waiter shows up in the first place.

    I applaud Pat K for starting this side of the conversation because it’s not been looked at very often by the press and even though the stats might not be perfect, the big idea behind this idea is a good one for all sides to consider.

    BTW – I think this idea of “just cause rich people can afford more of the tab” logic is very dangerous for all of us Americans, and we should all reflect on the damage this could do. This would never fly in a family system where just cause one of our brothers/sisters makes more money – we can all buy bigger houses, drive more expensive cars, eat out more often, etc. just cause they can cover our back.

    Time for everyone to come back down to reality – stop this circular conversation that avoids the real issues, and get everyone to bend a knee and be proud of our country again.

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