Around New England

Connecticut’s Economic Malaise Tied To High Income Tax Rate, Democratic Governor Says

January 11, 2020

Connecticut Governor Ned Lamont said he opposes higher state income tax rates and he linked anemic growth with high income taxes.

Lamont, a Democrat, rejected the idea of eliminating the state income tax on the grounds that it would force local municipalities to make up the difference. (He attributed support for eliminating the state income tax to his 2018 Republican opponent in the governor’s race.) 

But when a caller to WNPR radio on Tuesday, January 7 asked Lamont why he doesn’t support raising the marginal tax rate on the richest 1 percent of Connecticut residents, Lamont responded: 

“In part because I don’t think it’s gonna raise any more money. Right now, our income tax is 40 percent more than it is in neighboring Massachusetts. Massachusetts is growing, and Connecticut is not growing. We no longer have the same competitive advantage we had compared to even Rhode Island and New York, not to mention, you know, Florida and other places. So I am very conscious of how much you can keep raising that incremental rate. As you know, we’ve raised it four times in the last 15 years. So you’re absolutely right – I held the line on tax rates.”

(Lamont’s answer on the WNPR radio program begins at 28:33.)

Connecticut has seven income tax rate tiers, the highest of which for tax year 2019 is 6.99 percent on individuals earning $500,000 or more and married couples earning $1 million or more. 

That’s 38.4 percent higher than Massachusetts’s single flat-tax rate for calendar year 2019, which is 5.05 percent.

Connecticut state income tax rates for calendar year 2019