“Who Pays?” How Our State and Local Tax System Burdens Connecticut’s Poor and Middle Class

Back • Publication Date: April 11th, 2008

Authors: Douglas Hall, Ph.D. & Shelley Geballe, J.D., M.P.H.

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Connecticut’s middle class and poor families pay much more of their income in state and local taxes than do the wealthiest families. After federal income tax deductions for state income and property taxes, the wealthiest 1% of Connecticut’s families (with average income in 2006 of $3.3 million) paid 4.7% of their income in state and local taxes. This was less than half the share of income paid in these taxes by the state’s middle-income families (10.2% of their average income of $55,100) or the poorest 20% of families (10.9% of their average income of $15,100).

Low- and middle-income families pay a relatively larger share of their incomes in sales and property taxes, while higher income families pay a larger share of their incomes in income tax. In total, however, the state’s wealthiest families pay a much smaller share of their income in state and local taxes than do its middle and lower income families. Why? Connecticut’s income tax rates are not progressive enough to offset the regressivity of the sales and property taxes.