Minnesota is a high-tax, high-quality state. The income tax tops out at 9.85% (one of only 4 states above 9%), but residents get measurably better public services in return: top-10 public schools, top-5 healthcare, low poverty rates, and strong infrastructure. The Twin Cities metro (Minneapolis–St. Paul) drives the economy, home to 18 Fortune 500 companies including UnitedHealth Group, Target, 3M, and Best Buy. Incomes are well above the national average, and the cost of living is moderate for a major metro. Housing is the main affordability challenge — Twin Cities home prices have climbed steadily — but Rochester (Mayo Clinic), Duluth, and St. Cloud offer lower costs with strong local economies.
Minnesota at a Glance
| Metric | Value | National Rank |
|---|---|---|
| Population (2024) | 5.7 million | 22nd |
| Median household income | $84,313 | 8th highest |
| Median home price | $330,000 | Average |
| Cost of living index | 97 | Near average |
| State income tax | 5.35-9.85% | Very high |
| Sales tax | 6.875% (+ local up to 2%) | Above average |
| Property tax (effective rate) | 1.08% | Average |
Income and Housing
| City/Area | Median Income | Median Home Price | Median Rent (2BR) |
|---|---|---|---|
| Minneapolis | $72,000 | $340,000 | $1,500 |
| St. Paul | $67,000 | $290,000 | $1,350 |
| Twin Cities suburbs | $100,000+ | $400,000 | $1,700 |
| Eden Prairie | $115,000 | $450,000 | $1,800 |
| Rochester (Mayo Clinic) | $78,000 | $310,000 | $1,350 |
| Duluth | $55,000 | $250,000 | $1,100 |
| St. Cloud | $56,000 | $240,000 | $1,050 |
| Mankato | $55,000 | $230,000 | $1,000 |
Tax Burden: High Income Tax, High Returns
| Taxable Income (Single) | MN State Rate |
|---|---|
| Up to $31,690 | 5.35% |
| $31,691-$104,090 | 6.80% |
| $104,091-$193,480 | 7.85% |
| Over $193,480 | 9.85% |
Minnesota is one of only 4 states with a top income tax rate above 9%.
What You Get for High Taxes
| Quality of Life Metric | Minnesota Rank |
|---|---|
| Public school quality | Top 10 |
| Healthcare quality | Top 5 |
| Infrastructure quality | Top 10 |
| Poverty rate | 2nd lowest |
| Median income | 8th highest |
Minnesota Pros and Cons
| Financial Pros | Financial Cons |
|---|---|
| High median income ($84K) | 9.85% top income tax rate |
| Average cost of living (97 index) | Cold winters (heating $2K-$3K/yr) |
| Fortune 500 companies (18 — 2nd most per capita) | High sales tax (up to 8.875%) |
| Excellent schools and healthcare | Short growing season |
| Strong social safety net | Below-average home affordability in Twin Cities |
Related: Cost of Living by State | State Income Tax Rates | Property Tax by State