January 13, 2015


State & Local Taxes in 2015


Connecticut Tax Code Features

Progressive Features

• Graduated personal income tax structure

• Provides 30% refundable EITC (temporarily reduced to 27.5% but modeled at 30% in the report)

• Provides comparatively large personal exemptions and credits for low- and middle-income taxpayers

• Provides a property tax credit for low- and middle-income taxpayers

• Sales tax base excludes groceries

 Regressive Features

• Comparatively high reliance on property taxes

• Comparatively high cigarette tax rate

• Fails to provide a property tax “circuit breaker” credit for low-income non-elderly taxpayers

• Fails to use combined reporting as part of its corporate income tax

Tax Changes Enacted in 2013 & 2014

• Starting in 2015, clothing under $50 is exempt from sales tax

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Connecticut has the 26th most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Ap­pendix B for state-by-state rankings and more details).

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