On the day governors of Connecticut and New Jersey traded barbs on TV about each state’s business and tax climates, a new report shows both states’ tax burdens are among the nation’s highest.
The Tax Foundation, a Washington-based think tank, issued a report Wednesday that said taxpayers in Connecticut, New York and New Jersey bore the highest state-local burdens in the country in 2010, while residents in South Dakota, Nevada and Alaska experienced the lowest.
On average, 12 percent of Connecticut’s income goes toward paying state-local taxes, compared to 12.2 percent in New Jersey and 12.1 percent in New York. The average for the nation is 9.8 percent.
Across the U.S., the combined state and local tax burdens fell slightly in fiscal year 2009, as taxes shrank faster than income due largely to a slower economy, the report said.
Wednesday morning, before the report was published, Gov. Dannel Malloy and New Jersey Gov. Chris Christie appeared on MSNBC’s “Morning Joe,” and traded barbs about how each governor is handling their budget crises.
Christie, a Republican who has proposed to cut spending and lower taxes, criticized Malloy’s proposal to increase taxes by $1.5 billion to help close Connecticut’s $3.2 billion deficit. Christie said his state will be “waiting for Connecticut jobs at the border,” if Malloy’s proposed tax increases go forward.
Malloy, who appeared on the show in a separate segment, responded by saying Connecticut is dealing with its deficit in a different way. Malloy has proposed spending cuts, tax increases and concessions from state employees to close the deficit.
“I think Chris Christie has to do what he thinks is best for his state and I have to do what I think is best for my state,” Malloy said.
Malloy also said Connecticut isn’t interested in closing nursing homes or schools to balance the budget.
“We are taking a different path. It’s a Connecticut path,” Malloy said. Â
Malloy also noted that other reports have placed Connecticut’s tax burden in a much more positive light.
Last year, for example, a national survey of state and local business taxation by Ernst & Young said Connecticut is a relatively low tax state for businesses.
Connecticut ranked 5th lowest in total state and local business tax revenues among states when compared to the level of private sector economic activity in each state, the report said.
However, another recent report by the Tax Foundation, said Connecticut ranks among the five states with the worst tax climates for business.
