by Susan Merrow

"When we try to pick out anything by itself, we find it hitched to everything else in the Universe." So said the 19th century naturalist John Muir about his beloved Sierra Nevada environment. He could as easily have been speaking of 21st century Connecticut tax policy.

Connecticut’s over-reliance on the property tax as a revenue source is hitched to economic stagnation, education disparities, questionable land use decisions, and much more. Years of tinkering around the edges of tax reform, however, has yielded more heat than light. All too often, poking at the system in one area is fraught with unintended consequences in a badly imbalanced tax system.

Case in point: a recent article by Reporter Keith Phaneuf of the CT Mirror makes a compelling case that tolls on passenger cars, as an answer to our very real transportation needs, would have had the consequence of exacerbating our state’s income inequality. While the toll debate has currently moved in a different direction, with trucks as the source for revenue, it offers an instructive example of the all too likely consequences of tinkering.

According to Phaneuf, it is estimated that many middle-class Connecticut households could have expected to pay between $400 and $800 per year, even under a scaled-back tolling plan. It may not seem like much to folks of means, but it would have essentially nullified the Earned Income Tax Credit - a long-sought anti-poverty measure that was enacted a few years ago and always seems to be in legislative peril.

Meanwhile, in order to honor Governor Lamont’s desire not to raise income taxes on the wealthy, an array of nickel and dime taxes on items such as plastic bags, prepared foods, and the Rideshare transit fee, will hit low- and middle-income taxpayers disproportionately. And yes, the minimum wage increase did pass in the 2019 legislative session, but it was likely that tolls would have added to the small tax and fee increases as they ate into its potential benefits. Further, minimum wages increases will take until 2022 to reach the promised $15 per hour.

Among the many reasons to be proud of our home state, the fact that we have the third highest rate of income inequality of all states is not one of them. According to an article about Connecticut by Elizabeth McNichol of the policy institute The Center on Budget and Policy Priorities, “….the wealthiest 1 percent is earning average incomes almost 40 times those of the bottom 99 percent. Families in the bottom and middle have faced the highest barriers to recovery since the Great Recession. Between 2009 and 2015, the top 1 percent captured 134 percent of the total income growth in the state while income of the rest dropped”.

And further, according to a study by the Federal Reserve Bank of New York, Fairfield County is the most unequal place in the country. According to the study cited above, “…The top wage earners in Fairfield County were receiving almost six times more than the bottom earners in 1980. By 2015, it was almost nine times as much.”

In an editorial printed in the elsewhere on this website entitled “Property Tax Should Outweigh Popsicle Debate,” the Connecticut Law Tribune recently editorialized, “…And the Democratic leadership, who after all represent the General Assembly’s majority party and control the flow of legislation, deserves equal criticism for proposing the underlying nickel-and-dime tax legislation rather than seeking structural reforms that promote fairness, economic security, and job growth.

We are on the verge of a new legislative session that begins in February. Next year at this time, I hope that we will look back at 2020 as the year when we stopped tinkering with and poking around the edges of the state’s tax structure. It’s time to undertake a plan for fundamental tax reform and a much-needed rebalancing of a broken tax system.

Michele Jacklin contributed editorial support to this article.