With state employee layoffs and painful budget cuts looming, some view higher corporate taxes as an answer to Connecticut’s deficit woes.

There’s a strong belief among state workers and advocates for the poor that big business did not pay its fair share when times were good. Given the hundreds of millions of dollars in red ink Connecticut faces this year and next, that preferential treatment must stop, they claim.

But some economists, business organizations and the administration of Republican Gov. John G. Rowland say the state should not rush to raise corporate taxes. Increasing the overall corporate rate or eliminating tax credits and breaks, they argue, would likely create more harm than good.

“If you get tagged as an antibusiness state in the tax area or in other areas, it’s a long-lasting tag,” said Marc Ryan, Rowland’s budget chief.

Connecticut should know. In the late 1980s, when the state faced its last fiscal crisis and ended up enacting a personal income tax, the corporate tax rate was 13.8 percent. Today the rate is 7.5 percent, the middle of the pack compared to other states.

Despite six years of lowering the corporate tax and enacting or beefing up different tax credit programs for business, Ryan said Connecticut still feels its old “high-tax state” reputation.

–Associated Press