Connecticut’s Tax Freedom Day

Connecticut's Tax Freedom Day - the day on which the state's citizens stop working for the government and start working for themselves - arrives on May 13, 2013. This is the latest date for any state in the nation, according to the Tax Foundation. This year’s tax freedom date is also eight days later than it was last year, reflecting a truly amazing and alarming jump in our tax burden. Here are some of Connecticut’s taxes at a glance, as reported by the Tax Foundation: • Connecticut's personal income tax system consists of six brackets and a top rate of 6.7%. That rate ranks 18th highest among states levying an individual income tax. Connecticut's income tax collections per person were $1617 in 2010, which ranked 4th highest nationally. • Connecticut's corporate income tax system consists of a flat rate of 9%. That rate ranks 6th highest among states levying a corporate income tax. Connecticut's corporate tax collections per person were $142 in 2010, which ranked 12th highest nationally. • Connecticut levies a 6.35% general sales or use tax on consumers, which is above the national median of 6%. Connecticut's state and local governments collect $881 per person in general sales taxes and $623 per person in excise taxes, for a combined figure of $1505, which ranks 15th highest nationally. • Connecticut's gasoline tax stands at 45¢ (4th highest nationally), while the cigarette tax stands at $3.40 per pack (3rd highest nationally.) • Connecticut's state and local governments collected approximately $2522 per person in property taxes, which ranks 3rd highest nationally. High taxes - many of them retroactive taxes – have helped create a dismal economic climate in Connecticut. According to the United States Department of Commerce Bureau of Economic Analysis, personal income growth in Connecticut was only 2% from 2011 to 2012, the second lowest in the country. Since the state income tax was passed in 1991, our state has ranked dead last in economic growth. Connecticut has increased its tax revenue by 15% from 2011 to 2012. Less than 1% of that increase was the result of economic growth; the rest came from higher tax rates and one-time revenues. The Governor’s Office of Policy and Management (OPM) reports that the economic recovery of the state is “quite slow” and shows only “minor growth.” This legislative session, I introduced a bill to ban retroactive taxes here in Connecticut, like the increase in the state income tax which surprised so many people in 2011. SB 154, An Act Concerning Retroactive Tax Increases, was debated in the Finance, Revenue and Bonding Committee. Though I haven’t heard a good argument against my bill, there seems little chance it will even be brought up for a vote this session. Meantime, the state faces a $2 billion deficit over the next two years, despite the enormous tax hike—largest in state history—in 2011. The problem is spending. The Governor’s latest proposed budget increases spending over the next two years by nearly 10%. We cannot afford to continue in this direction.