Some business leaders and economists have criticized Democratic plans to impose a temporary 30% surcharge on the corporation business tax, to repeal certain tax exemptions, and to limit certain credits. Some have complained that the state ranks poorly as a place to operate a business, in part due to its state and local taxes. This brief summarizes a report prepared by Ernst & Young in conjunction with the Council on State Taxation, a trade association. The report finds:
- Connecticut’s business taxes as a share of private-sector gross state product (a measure of economic activity in the state) are the second lowest in the nation.
- In the past seven years, Connecticut’s political leaders have held down the rate of growth in business taxes. From FY 2002 through FY 2008, business taxes in Connecticut grew at the seventh slowest rate in the nation.
These statistics reveal that Connecticut’s tax structure is relatively less burdensome on the business community than nearly every other state in the nation.