Connecticut Passes a Pro-Tax, Pro-Government Budget


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Bucking the anti-tax, anti-government, cuts-only approach to state budget shortfalls embraced by most state leaders across the nation this year, Connecticut governor Dan Malloy signed a two-year state spending plan this week that raises $1.4 billion in new taxes to mitigate cuts to core services.
 
The tax package includes increases in personal income taxes for the state’s best-off residents, a new 30 percent refundable state Earned Income Tax Credit, a reduction in the state’s property tax credit, an increase and expansion of the sales tax, a new ‘Amazon’ tax, a corporate income tax surcharge, a lowered threshold for the estate tax, and increases in cigarette and alcohol taxes.

What makes Connecticut truly unique among the states in its revenue-raising approach this year was the care given to make the tax changes progressive and reform-minded rather than simply relying on quick or one-time fixes that postpone fundamental decisions and ignore the more significant structural and fairness flaws in state and local tax systems.

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