Taxes in Connecticut are among the worst in the country, according to a recent report by 24/7 Wall Street. The Constitution state is first or among the top in several key tax categories.
Like many high-tax states, Connecticut is running out of money. The state is facing a $240 million deficit this year which is threatening to go even higher. If something doesn’t change, the state deficit will eclipse $2 billion within the next two years.
The governor is proposing new taxes to help deal with the financial crisis, however the taxes in Connecticut are already high. According to the Tax Foundation, Connecticut is the second-highest most tax-burdened state in the Country.
Residents, on average, see 12.6% of their income go towards various taxes. State income tax collections per-capita is the highest in the nation. The state is also 3rd highest in property tax collections.
Where Does The Money Go?
If Taxes in Connecticut are so high, why is the state facing a deficit crisis? Despite the high tax revenue (Connecticut is first in the nation for most tax revenue collected), the state is spending more money that it has.
Non-functional spending represents the largest segment of Connecticut’s general funds. This includes pension and health benefits to state employees. It is unlikely that any legislature would seek to cut or reduce spending in this area.
Education represents the second highest spending area. However, like New Jersey’s deficit crisis; it’s unlikely that will be touched either.
New proposals include an elevated state sales tax as well as a tax on high-income earners. Connecticut is already facing an exodus of tax-payers who are leaving the state in search of a lower cost of living.
Taxes in Connecticut are so high, residents are leaving for Florida, Texas, and other states with a low tax burden. Some of them are wise enough to Download the City vs City app first!
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