In the past few weeks, state Senate President Pro Tempore Martin Looney, D-New Haven, has floated the possibility of instituting a statewide tax on expensive properties — otherwise known as a “mansion tax” — to help make up for a multibillion dollar budget deficit. Although his proposal has not yet made it into a bill, it has garnered attention from lawmakers and media alike.
Many Democrats support Looney’s idea, as they believe that Connecticut should ask its wealthiest residents to pay a higher share of taxes. Rep. Anne Hughes, D-Weston, co-chair of the Progressive Caucus, told the News she supports the mansion tax for the public’s good.
“I am for the most fortunate among us to pay their fair share,” Hughes said. “It’s not like they’re funding nothing. They’re funding public services for the good of the public. If you cut it it has a deep impact, usually to the most vulnerable.”
Connecticut is expected to have nearly a 3.7 billion dollar budget deficit in the two upcoming fiscal years, which start on July 1, according to The Connecticut Mirror. Accordingly, lawmakers are concerned that the state must raise revenue or reduce spending by almost four billion in order to balance their budget.
There are many proposals being considered by the state legislatures, such as cutting or streamlining services and increasing sales taxes or capital gains taxes. However, Hughes believes that the mansion tax has a comparative structural advantage: Taxpayers cannot avoid it by moving to another state. Even if the owner of a mansion leaves the Nutmeg State, the property does not, and Connecticut can continue to generate funds by taxing it.
“You can move to another mansion in Connecticut and you’re still paying the tax. You can move out [of Connecticut] and it’s going into Connecticut,” Hughes told the News. “You’re not taking it with you into another state. The property is in Connecticut, you’re not taking it to Florida. That’s the appeal.”
Despite Hughes’ optimism, the tax is expected to face resistance among House and Senate Republicans, who are in the minority in both chambers of the General Assembly.
State Rep. Devin Carney, R-Old Saybrook, told the News that he opposes the proposal because the tax could create an unfair financial burden on individuals who already pay high local property taxes.
“Folks already pay high property taxes. We pay one of the highest rates in the nation.” Carney told the News. “It could cause people to consider leaving the state. More expensive homes are already not moving as quickly [in the real estate market] as other homes are.”
Carney agrees with Hughes that it is essential to attempt to balance the state’s budget this legislative session, but disagrees that raising revenue is the best approach, instead wishing to focus on reducing the size of Connecticut’s government. Carney told the News that he believes the private sector often offers services more efficiently than government, and thinks the Nutmeg state should cut spending by partnering with the private sector and nonprofits.
“We should do what we can to try to shrink the size of government without looking to try to get new revenue,” Carney said.
Although Carney and his fellow House Republicans and Senators are in the minority in Hartford, they may find an unusual ally — Gov. Ned Lamont SOM ’80 — in their camp. NBC Connecticut, along with other media outlets, reported that Lamont “doesn’t support increasing income tax rates for the wealthy.” Lamont’s office did not respond to the News’ request for comment.
Despite potential opposition from the governor, Hughes is confident that some version of the mansion tax will eventually pass in Connecticut. Hughes said it is likely to be combined with other efforts, such as an increased tax on capital gains, in order to increase revenue for the state.
A capital gains tax has gained support from state legislators because many upper-class Connecticut citizens gain wealth from capital gains rather than from traditional incomes. Speaker of the House Joe Aresimowicz, D-Berlin, said that Democrats are especially interested in increasing the rates for those who make more than $500,000 a year, according to NBC Connecticut. However, Lamont also opposes this proposal.
House Democrats, such as Hughes, mostly back raising tax rates for those who benefited the most from the Trump tax cuts of 2017.
“We want to find a way for those who benefitted from the tax cuts to invest back into Connecticut.” Hughes told the News.
The Connecticut General Assembly’s legislative session is projected to end on June 5.
Emmett Shell | email@example.com