Recent interview with Fox News, Kevin O’Leary, the renowned entrepreneur and star of ABC’s “Shark Tank,” has sharply criticized Minnesota Governor Tim Walz for his new tax policies, which he claims are driving residents out of the state. O’Leary argues that Walz’s tax increases, particularly on high earners and investors, have led to a significant outflow of wealth from Minnesota.
O’Leary focused on a specific tax hike implemented by the Walz administration, targeting individuals with net investment income exceeding $1 million. According to O’Leary, this new tax, which adds a 1% surcharge on top of the state’s already high 9.8% tax rate, has incentivized wealthy retirees and investors to relocate to states with more favorable tax environments, such as Florida and Texas. “The state tax there is 9.8 percent, then Walz put on a super tax for people that are investing more than $1 million. So all of his retirees have moved out of the state, billions of dollars,” O’Leary told Fox News.
The criticism from O’Leary highlights a broader debate on the impact of state tax policies on migration and economic growth. Minnesota’s progressive tax system, which features a graduated income tax with a top rate of 9.85%, is known for taxing higher earners at a higher rate. In 2023, the state introduced a 1% tax on net investment income over $1 million, affecting individuals, estates, and trusts. This measure is set to take effect in the 2024 tax year, adding to the financial burden on the state’s wealthiest residents.
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O’Leary suggests that this tax increase makes Minnesota less competitive in retaining high-income residents who are seeking to minimize their tax liabilities. He points to states like Florida and Texas, which do not impose a state income tax, as attractive alternatives for those looking to escape higher tax rates.
However, O’Leary’s remarks have sparked controversy. While he contends that Minnesota’s tax policies are driving away residents, some experts argue that the state’s tax system is designed to provide essential services and support social programs. According to a report by the Institute on Taxation and Economic Policy, Minnesota’s tax structure is progressive and supports lower-income families through initiatives like refundable tax credits. This report suggests that Minnesota’s approach promotes fairness and provides necessary support for its residents.
As Walz campaigns on the national stage as the Democratic vice presidential candidate, the impact of these tax policies on his political career remains uncertain. The Harris campaign has not yet fully detailed its tax policy proposals for the 2024 election, leaving room for speculation about how Minnesota’s tax approach might influence national strategies. Harris has hinted at unveiling her economic agenda soon, which may address some of the concerns raised by O’Leary.
O’Leary’s critique adds a new dimension to the ongoing debate over state tax policies and their implications for economic mobility. As the 2024 election approaches, this issue is likely to be a focal point in discussions about the effectiveness and fairness of tax systems, with O’Leary’s comments potentially serving as a key argument for those challenging the economic policies of the Democratic ticket.
