🔒GOP gubernatorial candidate McCaughey pushes to eliminate CT income tax; is it possible?

Betsy McCaughey, a Republican candidate for governor in Connecticut, says she’d rather “slit my throat than raise a tax.” That partly explains why she has revived a long-standing but controversial idea — eliminating the state income tax — as part of her campaign platform. The plan has drawn political attention and sharp criticism from opponents who say it rests on misapplied research and shaky assumptions. A former New York lieutenant governor and conservative media commentator, McCaughey has pledged to phase out Connecticut’s personal income tax within five years, if elected. That won’t be easy: The tax, first enacted in 1991, generates roughly half of the state’s revenue — about $13 billion annually — making it the single largest funding source for state government. McCaughey (whose name is pronounced “McCoy”) frames her plan as a way to boost economic growth, attract businesses and make Connecticut more competitive with lower-tax states. “We can make Connecticut the tax haven of the Northeast,” she said when launching her campaign. Her proposal echoes pledges made by past GOP candidates for governor, including former Gov. John Rowland and, more recently, Bob Stefanowski. Rowland never eliminated the tax before resigning in July 2004, while Stefanowski lost to Gov. Ned Lamont twice. The idea, though, is gaining renewed traction nationally, thanks to a boost from the Trump administration and several states already pursuing policies aimed at reducing or eventually eliminating income taxes.

National trend

In recent years, states including Mississippi, Oklahoma and South Carolina have adopted or proposed phased income tax reductions, often tied to economic “triggers” such as revenue growth or budget surpluses — mechanisms intended to allow gradual cuts while limiting the risk of budget deficits. McCaughey has pointed to those states as models, particularly Oklahoma, arguing that Connecticut could follow a similar path. Oklahoma in 2025 adopted a trigger-based approach that allows income tax cuts only when revenue growth meets certain benchmarks. The state enacted similar measures in 2012 and 2016, but later reversed them amid budget shortfalls. A January 2026 report from the White House Council of Economic Advisers examined the potential economic effects of eliminating state income taxes, concluding that such a shift — if paired with replacement revenue sources — could modestly increase economic output. “You can almost envision the trucks full of business equipment and furnishings moving … toward the states that are going to zero (income tax),” McGaughey said. “They’re gaining population, they’re gaining business development.” Assessing those claims is difficult, in part because many of the recent tax-cut laws are relatively new, with several approved in 2022 or later. Kentucky, which adopted a trigger-based tax-cut law in 2022, has already implemented multiple reductions. According to a March 4 report from the nonpartisan MOST Policy Initiative in Missouri, the law produced 0.5 percentage-point cuts in 2023, 2024 and again this year, lowering the state’s income tax rate from 5% to 3.5%. The state, however, did not meet the benchmark for a cut in 2025. Even in states pursuing reductions, full elimination remains uncommon. Only a handful — including Texas and Florida — operate without a broad-based personal income tax, typically relying more heavily on sales taxes, tourism-related revenues and other sources. Economists caution that those states often have structural advantages, such as faster population growth or natural resource revenues, that may not translate easily to Connecticut.

Feasibility questions

Critics of McCaughey’s plan say the scale of the income tax’s role in Connecticut’s budget presents a major obstacle. One skeptic is Mark Boughton, commissioner of the state Department of Revenue Services, which collects the state’s taxes. Boughton, a former longtime Republican mayor of Danbury, ran for governor in 2018, when several GOP candidates — including him — backed plans to eliminate or phase out the state income tax. Stefanowski ultimately won the nomination. After nearly six years leading DRS, however, Boughton said eliminating the tax is not realistic. “I’ve been looking at these numbers for six years,” he said, “and I will tell you that it’s always possible to reduce your (tax) burden. But completely eliminate it? It’s not possible.” Economists say doing so would likely require a combination of deep spending cuts, increases in other taxes — such as sales or property taxes — or sustained economic growth large enough to replace the lost revenue. Some warn that relying heavily on consumption taxes could require significant increases in sales tax rates, raising concerns about both economic and political feasibility, as well as the regressive nature of those levies. “What other states have done is, they’ve cut their income tax, but then they’ve raised all kinds of fees and other revenue sources,” said Fred Carstensen, director of the Connecticut Center for Economic Analysis at the University of Connecticut. “That means shifting the tax burden,” Carstensen said, noting that such changes can push more costs onto municipalities — leading to higher property taxes — while placing a greater burden on lower-income households.

“Basically, she wants to make the aggregate tax burden, state and local, more regressive than it already is,” Carstensen said. Other economists have raised similar concerns, noting that consumption-based taxes tend to fall more heavily on lower- and middle-income households than progressive income taxes. Carstensen also questioned McCaughey’s use of a 2013 study by economists Karel Mertens and Morten Ravn, published in the American Economic Review and cited in this year’s Council of Economic Advisers report, which found tax cuts can spur economic growth. He said the study is being misapplied because it focuses on federal tax policy, not state systems. Because of that, he said, “you can make no analogy from their analysis of federal policy with state policy. They’re entirely different animals.” McCaughey said she cited the study with that distinction in mind, but views it as supporting her broader argument that income tax cuts are more effective than reductions in other taxes. She also pointed to research cited by conservative activist Grover Norquist, Americans for Tax Reform and the Council of Economic Advisers that she said shows income taxes play an outsized role in corporate location decisions. “The income tax is the one that it seems most corporate executives look at when they’re deciding where to locate or where to relocate,” she said.

A different era

While proposals to eliminate the state’s income tax are nothing new, efforts have historically run up against fiscal realities. Gov. Ned Lamont, who faces at least one challenger within his own party as he seeks a third term, and other Democratic leaders have expressed skepticism about eliminating the tax, citing potential impacts on funding for schools, transportation and other services. The state is also grappling with rising Medicaid costs, which state Comptroller Sean Scanlon recently cited as a factor in Connecticut facing its first budget deficit during Lamont’s tenure. McCaughey, though, says her proposal would not create a “budget hole” or require any program cuts. “If you impose the fiscal discipline that any increase in revenue must be dedicated to reducing and phasing out the income tax, you have a shot at becoming a high-growth state,” she said. “You’re not going to have a revenue hole, because spending is not going to dip below current levels,” McCaughey said. As for Boughton’s comment that it’s “not possible” to eliminate the state income tax, McCaughey chuckled. “Maybe he can’t do it, but I can,” she said.