Keith Phaneuf’s article on Dec. 22 states that over the next year, Gov. Ned Lamont has to help guide Connecticut’s economy out of the coronavirus pandemic and close a huge budget deficit. Phaneuf points out that many of the governor’s fellow Democrats say these things cannot be accomplished without doing something Lamont loathes: raising state taxes on Connecticut’s wealthiest residents.
His reported reasoning: if taxes are raised on our wealthiest citizens they will flee the state. Over 10,000 households have incomes far exceeding $1 million a year. Increasing the marginal income tax rate on these residents could easily produce $1 billion in additional revenue, income badly needed to close that huge deficit….perhaps increasing the funding needed to ensure that every Connecticut student receives a quality, integrated education.
The governor is mistaken if he thinks a small increase in taxes will prompt any significant flight from the state. Research shows that a few of our wealthiest citizens will be prompted to leave. But most, by far, will chose to remain. The reason: place still matters for the rich – the benefits of living in Connecticut’s communities far outweigh the additional tax they will pay. When you’re in the top 1% (which in Connecticut includes at least 14 billionaires) paying a little more doesn’t really cramp your style.
Whereas the top 1% pay just 8.1% of their income in state and local taxes, the 40% who constitute our middle class pay over 12%. We are soaking the middle class, giving wealthy residents an easier ride because of it.
Now is the time for the legislature to address this issue and pass a more progressive taxing structure. It’s the right thing to do. It’s the just thing. The fair thing. That’s much better than Lamont asking his department heads to reduce the compensation for their employees next year as he reportedly has done.
As Phaneuf points out, many, many Connecticut residents are hurting. Badly. Yet our wealthiest residents continue to do very, very well. They, by the way, garnered 100% of income gains in the state generated since the end of the Great Recession.
I hope the governor will reconsider — and listen to his fellow Democrats, and to a growing coalition of over 15 community/faith-based/labor organizations that are now planning, along with CT Voices for Children, to submit proposed legislation in January to tax the rich. Just a bit more.
Courtney Bourns of West Hartford is co-founder of FairShare CT.