Who shoulders Connecticut’s tax burden? A proposal would require state officials to provide more details.

Back • Publication Date: April 5, 2022 • Fiscal & Economics

Connecticut lawmakers on Tuesday gave a boost to legislation requiring more information about who shoulders the state’s tax burden.

The General Assembly’s Finance, Revenue and Bonding Committee voted 36-14 to approve the measure that will likely add to the political debate over tax fairness. It now heads to the Senate.

However, a provision authorizing the commissioner of revenue services to disclose tax returns to legislative leaders, putting the spotlight on Connecticut’s super-rich, was stripped out. Its removal made it possible for the measure to win bipartisan support, said Rep. Holly Cheeseman of East Lyme, the committee’s top House Republican.

“There was no way it was going to stay in” and win GOP backing, she said.

State Sen. John Fonfara, D-Hartford, and Rep. Sean Scanlon, D-Guilford, the co-chairmen of the finance committee, could not be immediately reached for comment.

The legislation calls for the Department of Revenue Services to add to its Tax Incidence Study data available for each of the most recent 10 tax years for which complete data are available. The report also would present information about the distribution of the tax burden among the top 5% of taxpayers and the top 1% of taxpayers.

In addition, the DRS must provide data on the percentage of taxpayers who are homeowners, single, married, seniors or with children. Data also must detail the average market value of a home and average monthly rent and other information.

Liberal Democrats and organized labor say Connecticut insufficiently taxes billionaires and others with a net worth not far behind.

A Tax Incidence Study last month showed 772 taxpayers, or 0.04% of Connecticut’s 1.7 million taxpayers, paid $983.2 million in taxes in 2019, or 12.7% of the entire $7.7 billion in taxes. But as a share of their incomes, the burden on the ultra-rich from all taxes — on income, property, excise and sales taxes and other levies — was 6.7%. In contrast, the study shows nearly half of Connecticut’s population paid about 26% of their incomes in all taxes.

Puya Gerami, campaign director at Recovery for All, a coalition of labor, community and faith groups, said the DRS report “confirmed what we feared and expected: The tax structure is deeply regressive and more regressive than in 2014.”

In testimony to the committee, Patrick R. O’Brien, research and policy fellow at Connecticut Voices for Children, said the DRS study followed an eight-year gap “and therefore policymakers had to rely on an increasingly out-of-date analysis for several years.”

Legislators removed a provision authorizing the commissioner of revenue services to make confidential tax returns available to the president pro tem of the state Senate, House speaker, Democratic and Republican leaders of the Senate and House and the finance, revenue and bonding committee “for purposes of evaluating and formulating tax policy.”

Critics denounced the provision as intrusive and inviting political attacks on the state’s wealthiest taxpayers.

“Election to public office does not bring with it an entitlement to the most personal details about one’s fellow citizens,” Carol Platt Liebau, president of the conservative Yankee Institute, said in written testimony. “And legislation that enables politicians to obtain such access is profoundly flawed, opening the door to abuse and weaponization of sensitive information, with the concomitant chilling of free speech rights.”

Eric Gjede, a lobbyist for the Connecticut Business & Industry Association, said lawmakers already have access to tax information to help write policy, which “should be based on all taxpayers, not formulated in response to individual returns.”

Stephen Singer can be reached at ssinger@courant.com.

Authors: Stephen Singer •  Source: Hartford Courant • View