Connecticut's Wealthiest Pay Smallest Share of Their Income in Taxes
Wade Gibson said he's hopeful Connecticut's tax study panel will come up with ways to make the tax system more equitable.
Connecticut's wealthiest residents pay a smaller share of their income in taxes than low- and middle-income households, according to a new report from the Connecticut Department of Revenue Services.
The report reads like a sliding scale of tax burden. The state's wealthiest pay eight percent of their income in taxes, and middle-income households pay 15 percent, while the state's low-income families pay a whopping 27 percent of their income in taxes.
The report also showed that low-income families pay 15 percent of their income in property taxes, compared to the wealthy, who pay two percent. So why the disparity?
"Poor people tend to live in cities at higher property tax rates than wealthy places like Greenwich," said Wade Gibson, director of the Fiscal Policy Center at Connecticut Voices For Children. "Services tend to be more responsive to people than buildings, and so this leads to a situation where the cities end up having a higher tax rate than the suburbs to provide the same services."
Gibson said he's hopeful Connecticut's tax study panel will come up with ways to make the tax system more equitable, but they aren't expected to offer recommendations for another year.
In the meantime, Connecticut Voices for Children recommends that lawmakers restore the Earned Income Tax Credit, which was reduced in 2013, and create a dependent exemption, which would allow parent and caregivers to deduct $2,000 of income for each dependent.