There has been a lot of talk about taxation both in Congress and the State Capitol in the past few months. Some commentators, like former governor Rowland, have been complaining about the terribly unfair tax system in Connecticut and how it is all about giving money to the poor, who don´t pay any taxes, while soaking the rich with an ever-increasing tax burden.
¿Is there any truth to these claims? Well, a recent study by the Corporation for Enterprise Development just took a good look on this claims (via Kevin Drum), creating a handy scorecard on this subject. They compare the taxes paid as percent of income from both the poorest 20% and the top 1% households by state, taking into account both local and state taxes. The results? Not good for those free-riding poor guys, I am afraid:
The bottom 20% families in Connecticut pay 11.2% of their income in state and local taxes. Those opressed souls in the top 1% of the income distribution pay a staggering 5.5% of their income in taxes. Only half of what the poor pay in the state.
So much for the undeserving poor.
The main driver behind these numbers in Connecticut, incidentally, are the local taxes, not state. The property tax system in the state is highly regressive, heavily penalizing the region´s cities. But more about this on a later post.