Chart of Tax Year 2020 Total Taxes by Income Deciles
A breakdown of tax year 2020 total taxes by income deciles. Credit: Screengrab / Connecticut Department of Revenue Services

HARTFORD, CT – Connecticut needs a more equitable tax code and to depend less on property taxes, state lawmakers said at a news conference Wednesday morning at the Legislative Office Building.

In the weeks after the Department of Revenue Services published its 2023 Tax Incidence Report, members of the General Assembly and the public have voiced their displeasure with the current state of taxation in Connecticut.

At a news conference Wednesday at the Legislative Office Building, several legislators said the state’s current tax code is inequitable and disproportionately affects marginalized and underserved groups. Rep. Jilian Gilchrest, D-West Hartford, said the disproportionate taxes paid by the state’s middle class and working poor, as well as low pay – often below a livable wage – for some essential workers, shows the inequity in the state’s tax system.

“We need Connecticut’s wealthiest earners to make an equitable investment in our state,” she said. “We need an equitable tax structure.”

House Minority Leader Vincent Candelora, R-North Branford, said in a written statement that he is worried that the Democrats are planning to adjust tax rates in a way that could lead the state back into a fiscal crisis.

“Rather than considering how to make our state less expensive for their constituents, or even reconsidering their spending priorities, Democrats are choosing to increase taxes and undo the strict fiscal controls that have allowed us to begin to pay down debt,” Candelora wrote.

Rep. Josh Elliott, D-Hamden, said that the state has become too dependent on the local property tax, and has not relied enough on the state income tax. The more money you make, Eliott said, the less you pay as a percentage.

According to the incidence report – which studied tax years 2011-2020 – property taxes make up 38.2% of tax revenue in the state. Income tax sits at 33%.

Department of Revenue Services Commissioner Mark Boughton, who presented the incidence report to the Finance, Revenue and Bonding Committee Wednesday, said that the issue with the tax structure, particularly with the property tax, is that the assessment doesn’t vary when it comes to taxpayers’ financial status.

“That’s what makes it so regressive,” Boughton said of the property tax. “It doesn’t account for a person’s income.”

That lack of equity for taxpayers, both with property and other taxes, causes many to label Connecticut’s tax code as regressive.

Connecticut Voices for Children, which released its own report as a response to the report from the DRS, said in a news release Monday that the tax structure in the state is far harsher toward low- and middle-income taxpayers. The DRS report did not include tax cuts that took effect after 2020, though CT Voices still dubs those as insufficient to creating a progressive tax code.

Emily Byrne, Executive Director of CT Voices, said in the news release that while the state tax structure is regressive, it can be changed. Investment in children and education, she said, depended on a restructuring of the tax code.

“The truth is that if we want all our state’s children to thrive, we need to invest in them more; revenue from the taxes of those who can most afford it will help raise all boats by ensuring the state has the essential infrastructure that makes Connecticut a desirable state for families, including housing, healthcare, early care and education,” she said.

The CT Voices report contained two policy changes that it believes will make the state’s tax structure less regressive. The first is an increase in income tax on wealthy earners, and the second is a restructuring of the way property taxes are assessed so they do not disproportionately affect low- and middle-income earners.

Speaking at Wednesday’s press conference about possible changes the state could make to its tax code in order to make it more equitable, Rep. Jason Doucette, D-Manchester, said that Connecticut would still remain below the tax codes of neighboring states like Massachusetts and Rhode Island.

Doucette, who co-chairs the Banking Committee, said he wanted to continue the conversation.

“I look forward to advancing this discussion, even if it’s a little bit every year,” he said, “because it’s a place we need to go.”