As we head into a new legislative session where taxes and spending will be the top issue, a new report shows that the state’s lowest income earners shoulder a higher percentage of Connecticut’s tax burden than richer residents.
The report, issued by the state Department of Revenue Services, shows that the state’s 725,202 households that earn less than about $48,000 had an overall effective tax rate of 23.62 percent in 2011. Collectively those households contribute 20.4 percent, or $3.56 billion, to the state’s $17.4 billion in total tax collections.
The state’s top earners — 357 households that each make at least $13.2 million— have an overall effective tax rate of 6.28 percent, and contribute $947 million, or 5.4 percent of Connecticut’s in-state tax collections.
The report drew from 2011 tax data and was done at request of the state legislature, which ordered the creation of and funded the study in 2013. It was completed and made public in early January. The report aims to shed light on the distribution of taxes collected in the state, but didn’t make any policy recommendations.
The report found that the state’s total 2011 tax liability was $21.1 billion, but only $17.4 billion came from Connecticut residents; the rest of the bill was footed by out-of-state individuals. Connecticut makes most of its money from property taxes ($7.3 billion), followed by personal income ($5.8 billion) and the sales and use tax ($2.6 billion).
The corporate business tax brings in $190 million.
— Greg Bordonaro
