Many Connecticut officials and residents say the state’s tax system doesn't work. But what would changes look like?
WSHU’s Ebong Udoma spoke with CT Mirror’s Keith Phaneuf to discuss his article, “CT says its tax system is unfair, but changes would mean tradeoffs,” as part of the collaborative podcast Long Story Short. Read Keith’s story here.
WSHU: Hello, Keith. In all the years I've covered the Connecticut legislature, progressives have always called for a fairer state tax system- basically, increased taxes on the wealthy and homeowner property tax relief has been a mantra. But this year, for the first time, relief for renters. Is that what prompted you to do this deep dive?
KP: That was part of it, absolutely. What I find interesting is, well, raising taxes on high earners absolutely has been part of the argument historically for decades. Most people in the General Assembly recognize that Governor Lamont has drawn a hard line in the sand. He will not raise taxes on high-earning households, so you're actually seeing proposals to lower tax rates on the poor and the middle class that don't require raising taxes on the wealthy that primarily involve Connecticut perhaps not saving to pay down pension debt at the furious pace that we've been saving, still pay it down faster than in the past, but not as fast as we've done, say, over the last six or seven years. And those proposals still aren't going anywhere. Yet, at the same time, every couple years, Connecticut does, they call them the wonky term for it, is a tax incidence analysis, but it's a fairness study. It looks at who's effectively paying taxes, and it shows that low-income households can lose up to 40% of their income paying taxes, the middle class as much as 15% and the wealthy around 8%. So, on the one hand, the state keeps saying its own tax system is unfair, yet it seems like that no matter what proposal comes up, the legislature and the governor say, "Thank you for sharing,” and it doesn't go anywhere.
WSHU: Now, you give us the example of Sandie Pope as an example of the dilemma Gen Zs are facing right now. Could you just tell us a little bit about what her experience is?
KP: Sure, Sandie is a 23-year-old woman from New Britain. She's a part-time student. She would like to work toward a degree in criminal justice, and like many folks, finds the challenge of higher education and paying for higher education to be difficult, but she's got some more immediate goals. She's been living in her mom's apartment, helping to pay the rent there, and simply wants to be able to afford her own apartment, certainly a modest goal. Wants to be able to keep going to school and cannot make the numbers work, and is finding that most of the people, many of the people in her social circle at her age, can't make the numbers work.
WSHU: She can't even afford an apartment.
KP: Right, and she was looking in her home city in New Britain, which, in other words, she's not looking to try to rent or find an apartment in Fairfield or Westport, and I think her story is what a lot of young Connecticut residents are facing, they are not — forget having to have an apartment with a roommate — they're not even able to get out of home because the cost of living is so oppressive.
WSHU: Now, there's this renter's credit that Majority Leader Jason Rojas (D-East Hartford) came up with; could you just explain what that is about, and how that would help Sandie?
KP: Sure. Well, there were a couple proposals for income tax credits for renters that would range, but we're talking about hundreds of dollars a year that you would get added to your refund, and some of these proposals also are very similar to the child tax credit, that's another popular one out there, that would give you $600 per child up to $1,800 per household. Legislators have also talked about making these credits refundable; in other words, let's say that the amount of income tax you owe is already down to zero before we've even applied these new credits. You would still get this money added to your refund, even if you make so little you don't owe any state income taxes. They're pitched as programs to help low-income families save more money, but the truth of the matter is most of the folks fighting for them, whether it's the renter's credit or the child tax credit, no, they're not even probably going to get to save the money, they're just going to use them to cover essentials, be it rent or utilities or groceries. Or something like that.
WSHU: Well, it didn't get through this year. Any chance that, considering this is an election year, people are campaigning on affordability, any chance that we'll see any of this happen maybe sometime in the very near future?
KP: Here's an interesting thing: you'll see proposals come around for two or three years, and usually after that, the kind of the writing is on the wall. However, the renter's credit was just in its first year, but the child tax credit has been proposed every year since 2021 and it's gaining momentum. I could be wrong, but I expect you'll see these come back, and I think you will see them come back with increasing pressure when you're dealing with gas prices over $4 a gallon, when you see inflation driven by the situation in the Persian Gulf, and by tariffs continuing to go up. The pressure on households was driving these, and I'll just very quickly point out the child tax credit. There were a majority of representatives, members of the House of Representatives, who'd introduced a child tax credit bill. Nearly two-thirds of the senators introduced a child tax credit bill. So we know a majority of the legislature has already sponsored bills, and many people also vote for bills; they just don't necessarily sponsor them. The numbers are there; the way it's building, I think it's almost a guarantee these come back.
