The federal tax-cut proposal unveiled this month by Republican House leaders would treat Connecticut’s wealthiest more generously over time, according to a new state-by-state analysis of the plan.
The gist is that lower rates, a higher standard deduction and a new tax credit — all benefits for the middle class — are designed to expire or become less generous over the next decade, according to the Institute on Taxation and Economic Policy (ITEP).
Meanwhile, benefits for wealthy residents, such as a shrinking estate tax, become more generous by 2027.
In all, the richest 1 percent of Connecticut residents will see their share of the proposed tax cut grow from 31 percent in 2017 to 50 percent in 2027, the ITEP analysis said. That’s an average cut of $53,480 that grows to an average cut of $66,020 over the decade.
Democrats have criticized the plan for having a disproportionate benefit for the wealthy at the expense of the federal deficit.
Another thing Democrats dislike about the plan is that it calls for the elimination of the ability to deduct state and local taxes on federal tax returns.
That deduction is worth $8.7 billion a year to Connecticut taxpayers, according to Department of Revenue Services Commissioner Kevin Sullivan.
