Minnesota’s Consu

Expenditure Survey 

Phillip Anthony and Paul Wi

Minnesota Department of RevMinnesota Department of Rev

Presentation at the CES Data Use

B f L b St ti ti Bureau o

f

L

a

bor St

ati

stics

June 21, 2010
CE E i xper ence

 Minnesota has been producing an incidence stu

nearly 20 years

 M thi d ki ith th PUMS d t f th My third year working with the PUMS data for th

Minnesota Department of Revenue

 Seven years with the Nebraska Department of R

Seven years with the Nebraska Department of R

using aggregate data from CE
O A di ur Audiences

 Minnesota Government

 Tax Committees Legislative Research Office Governor’s Commissions

 F d ti f T Ad i i t t Federation of Tax Administrators 
Pi T i r mary Topics

 The incidence of sales and excise taxes in Minn

the Minnesota Tax Incidence Study

 P li l i Policy analysis

 Exemption Levels Sales tax rebates Incidence of Tax Exemptions
Minnesota Tax Incidence Anal

Minnesota Tax Incidence Anal Geographic Level

 National level data

 Time Period

 A combination of most recent three 

years PUMS files

 Data Files Used

 Interview Data

 Only consumer units that complete all the interview

Only consumer units that complete all the interview

 FMLI and MTAB Files

 Diary Data

 FMLD and EXPD Files

 Data is categorized into nine household types

 Single Seniors, Married Seniors, Singles, Married no children, Married o

Married two children Married three or more children Single one child SMarried two children, Married three or more children, Single one child, S

more children

 No Topcoded records used in analysis
Mi t T I id R 

Minneso

ta 

Tax Incidence 

Repo

Taxes as a Percent of Income

20%25%

All TaxesGeneral Sales

All Taxes Total ETR = 11.36%

15%

l Taxes

General Sales Total ETR = 2.16%

5%

10%

All

0%

1 2 3 4 5 6 7 8 9 

Deciles
Analysis of Adding Legal Services to the Sales Tax Base

9.00% 

Effective Tax Rates, Population Deciles

7.00%8.00% General Sales Legal Services Suits = 0.2905.00%6.00%

al Sales Tax

2.00%3.00%4.00%

Genera

0.00%1.00%

2.00%

1 2 3 4567 8 9 

Deciles
Analysis of Adding Clothing to the Sales Tax Base

9.00% 

Effective Tax Rates, Population Deciles

7.00%8.00% General Sales Clothing Suits = ‐0.1645.00%6.00%

Sales Tax Rate

2.00%3.00%4.00%

General S

0.00%1.00%

1 2 3 4567 8 9 

Deciles
Ventura Sales Tax Refund Program

FULL-YEAR RESIDENTS

Joint and Head of Household Returns

(and Qualifying Widow(er)s)

1999

Avera

ge Sales Sales Tax

Taxable Income Tax Burden Counts Rebate 

Less than $2,500 $ 575 29,760 $ 235 $ 

2,500 - $ 4,999 715 32,546 292 $ 5,000 - 9,999 750 67,078 306 $ 

10,000 - 14,999 826 64,143 337 $ 

15,000 - 19,999 936 63,021 382 $ 20,000 - 24,999 1,012 64,862 413 $ 25,000 - 29,999 1,079 67,125 441 $ 30,000 - 34,999 1,172 67,594 479 $ 35,000 - 39,999 1,275 67,651 521 $ 40,000 - 44,999 1,384 65,549 565 $ 45 000 , - 49 999 , 1 470 , 59 837 , 600 $ 

$ 

50,000 - 59,999 1,506 97,223 615 $ 60,000 - 69,999 1,572 68,516 642 $ 70,000 - 79,999 1,711 46,082 699 $ 80,000 - 89,999 1,848 31,489 755 $ 90,000 - 99,999 2,001 22,018 817 $ 

100 000 100,000 - 119 999 119,999 2 167 , 27 696 , 885 $ 

$ 

120,000 - 139,999 2,374 16,132 969 $ 140,000 - 159,999 2,566 10,640 1,048 $ 160,000 - 179,999 2,747 7,225 1,122 $ 180,000 - 199,999 2,919 5,345 1,192 $ 200,000 - 399,999 3,733 19,245 1,524 $ 

400 000 400,000 - 599 999 599,999 4 912 , 4 687 , 2 006 , $ 

$

600,000 - 799,999 5,894 1,874 2,407 $ 800,000 - 999,999 6,757 976 2,759 $ 

1,000,000and over 9,481 2,464 3,250 $ 

Total 1,010,778 $ 

Average $ 
Special Projects

 Geographic Level

 National level and regional level data

 Time Period Time Period

 A combination of the most recent three years PUMS fi

 Data Files Used

 EXPN Data Interview Data

 Only consumer units that complete all the interview

Only consumer units that complete all the interview

 FMLI and MTAB Files

 Diary Data

 FMLD and EXPD Files FMLD and EXPD Files

 Data is categorized into nine household types

 Single Seniors, Married Seniors, Singles, Married no children, Married o

Married two children, , Married three or more children, Single one child, Smore children

 No Topcoded records used in analysis
H ti F l S i l P j t Heating 

Fuels 

Special Pro

jec

t

 The current sales tax base exempts heating fuels during t

season

 Change from and outright exemption to exemption the firs

Change from and outright exemption to exemption the firs

dollars of heating expenditure during the heating season
Diffi lti d C Difficulties an

d

Concerns

 Topcoding

 20% of households in our incidence study have an inc

greater than $86,000 per year greater than $86,000 per year

– 45% of total sales tax

45% of total sales tax

 5% of households are over $175,000 per year - 20% 

sales taxes dollars

 Spending on goods subject to excise taxes Spending on goods subject to excise taxes

 CE data does not provide data on volume of cigarettes 

consumed

 Small sample sizes Small sample sizes

 Some spending categories have a high percentage of 

households with zero spending in particular categories
Hotel Expenditures by Senior Sing

Hotel Expenditures by Senior Sing

Households
Difficulties and Concerns

 Intrastate spending vs. interstate spending on tr

expenditures

 D t “I t bilit ” Data “Impenetrability”

 Short lead times for projects Other States may lack the technical abilities