Re: (“Governor Rell won’t seek reelection,” Nov. 9): The author notes that “the tax rate [in Connecticut] is relatively high compared to other states.” Although one hears this sort of assertion often in Connecticut, it does not stand up to close examination.
Connecticut residents do pay some of the highest per capita taxes in the country, something anti-tax folks are quick to point out. Connecticut, however, also has the nation’s highest per capita income, so this claim is rather meaningless — someone who earns $1,000,000 each year and pays 1 percent in taxes would owe more than someone who earns $10,000 but pays 99 percent.
Anti-tax folks also argue that Connecticut residents pay one of the highest proportions of income in total taxes, but this figure includes the federal income tax. Since that tax is progressive, it charges wealthy taxpayers considerably higher rates, meaning Connecticut residents are affected much more than average. Again, this is a function of being well-off — not a bad thing — and it doesn’t involve state taxes.
When you remove federal taxes and look at total state and local taxes as a proportion of income, Connecticut suddenly looks pretty good — according to the Census Bureau, we rank third lowest in state and local revenues as a proportion of personal income. And, the pro-business Council on State Taxation recently ranked Connecticut second lowest in corporate tax burden. At the same time, our neighboring states New York and New Jersey have considerably higher total taxes.
So, the real story is not how high Connecticut’s taxes are; it’s how low they are. And, the bigger story is that the people in Connecticut facing the highest state and local taxes are the poor. They pay a higher proportion of their incomes in state and local taxes than the wealthy because urban property taxes are much higher than suburban ones (New Haven’s rate is about four times Greenwich’s), because a larger proportion of their income is spent on consumer goods (which are subject to regressive sales and excise taxes) and because Connecticut’s income tax is not very progressive.
Seen in this light, Governor Rell’s efforts to cut taxes for businesses and the wealthy look very different.
The writer is a second-year student at the Law School.