Minnesota Governor Tim Walz introduced his budget proposal last week, a plan that is dominated by big tax hikes. 

Walz leads his tax grab with a so-called millionaire’s tax that will in fact hit people making far less than $1 million annually. Walz seems to think the government gave successful people their earnings, saying, “This is about a progressive taxation system that says, much is required of much given to some folks.”

Walz wants higher taxes for many reasons, including giving teachers’ unions more money. Also standing out amongst a mess of bad tax policy is a tax hike on life-saving e-cigarettes.


The proposed tax increases for Minnesota include:

-An increased income tax rate for household incomes above $1 million

-An increase in the corporate tax rate for large companies, specifically companies who recorded a profit during the pandemic

-Imposing an additional capital gains tax that includes a 4% tax on gains over $1 million for individuals, trusts, and estates

-Taxing foreign income that returns to the U.S. 

-Revising the estate tax for individuals, not for small businesses or farms

-$139 million increase in tobacco taxes on both vaping and cigarettes


Fee increases include:

-Increased fees on new car license plates

-Higher state park fees, specifically state park passes

-Higher boat registration fees 

-Increased licensing fees for industries such as insurance, pesticide fees, and newborn  screening fees


Republican lawmakers and Minnesota businesses voiced opposition while Democrats, teachers, and labor unions praised the budget’s proposed provisions. Minnesota Chamber of Commerce President Doug Loon said of the budget proposal, “While some of the governor’s recommended investments have merit, the tax increases required to support this degree of ongoing spending will knock Minnesota out of competitive rankings and threaten our economic recovery.”

GOP leaders stated that they would not approve a plan that included tax increases and that the state should cut state various agency budgets and dip into budget reserves instead of raising taxes.

“Proposing tax hikes is shockingly tone-deaf after Minnesota families and businesses have endured nearly a year of the governor’s shutdowns and constantly-changing executive orders,” House Minority Leader Kurt Daudt, R-Zimmerman, said in a news release. “The governor knows they have no chance of becoming law. We are ready to roll up our sleeves to pass a bipartisan budget that funds our priorities while asking the government to tighten its belt to close the budget deficit without tax increases.”

Although the COVID-19 pandemic has posed significant challenges for state governments. It is not in the interest of anyone to impose new taxes and fees. States will prolong their economic recovery if their only course of action is to raise taxes despite the unsteady financial health of their small businesses, families, and students.