January 14, 2013

Connecticut Voices for Children: After 2011 Tax Reforms, Connecticut’s Wealthy Still Pay Smallest Share of Income in State and Local Taxes

ITEP Work in Action

Despite recent efforts to make the Connecticut tax system fairer, the wealthiest 1% of our residents will still pay only half as much of their income in state and local taxes as the poor and middle class, according to a new analysis by the Institute on Taxation and Economic Policy. The state and local tax reforms approved in 2011 made Connecticut’s tax system more equitable by generally reducing taxes for lower-income residents, through the earned income tax credit, and raising them among higher-income residents. But even after these changes, our tax system remains highly imbalanced. After accounting for federal deductions, estimates show that Connecticut’s low- and middle-income families will pay between 9.6% and 11.4% of their incomes in state and local taxes, while the top 1% of income earners will only pay about 5.5%. Few would agree that those most able to pay should contribute less of their income than those least able to pay.

Read the Full Report (PDF)