Mark Boughton: A Plan to Phase Out the Income Tax
It’s not surprising Aetna has decided to move its corporate headquarters out of Hartford, but the lack of surprise does not make it less of a jolt to our state’s failing economy. Meanwhile, the same old refrain regarding tolls, the legalization of recreational marijuana, and “taxing the rich” for more revenue keeps coming from media pundits and politicians at the Capitol.
Connecticut flourished as a state without an income tax. Our cities thrived, our population grew, people had good jobs that supported a family and the most vulnerable had a safety net they could count on.
Like it or not, Connecticut is in a regional competition with states like Massachusetts and New York for jobs, and the businesses that create those opportunities. Since the implementation of the state income tax, Connecticut has become less affordable for residents and much more anti-business than our neighboring states. When Massachusetts seems like a tax haven compared to Connecticut, you know we have a tax issue that we must wrap our collective arms around.
How can we afford to repeal the income tax? Connecticut must acknowledge that this a critical moment for our state. Under our current tax structure, we are in a perpetual state of financial crisis. We have an opportunity to dramatically reshape state government, including eliminating the income tax. The writing is on the wall and our current path is clearly unsustainable. The reality is we cannot afford to keep this tax in place. Nothing short of bold leadership and dramatic change will stop the bleeding.
Nine states thrive without an income tax. According to Forbes Magazine, economic growth in those states grew nearly 50 percent faster between 1998-2008 than it did in the nine states with the highest top personal income tax rates. Job growth climbed more than twice as fast in those states without income taxes, compared to the states with the top income tax rates. We need to look at these success stories and implement similar fiscal policies here in Connecticut to get our economy moving.
Many will argue that eliminating the income tax will unfairly benefit the wealthy, but the opposite is true. When the income tax was implemented, it shifted the tax burden from our wealthiest residents onto the middle class because the income tax replaced the capital gains tax of 7 percent, as well as 14 percent tax on major interest. Promises that the income tax would reduce property taxes never materialized, only adding to the pain of Connecticut’s families. Simply put, eliminating the income tax will benefit all of Connecticut’s residents regardless of socioeconomic status.
We need to focus on core state government services such as plowing highways, educating our youth, keeping people safe and ensuring that those who cannot care for themselves receive the help they need. I have always been an advocate of these core government services and that will not change. When we talk about innovation and reform one example that should be employed is the creation of an education equity fund that would remove state education dollars away from the political process and toward a more impartial procedure.
There is no simple, painless way with which to eliminate the state income tax. But I am committed to working with the best and brightest to restore Connecticut to its former glory. Our plan to eliminate the income tax is a comprehensive approach. It redesigns and reorganizes state government and examines the nexus between municipalities and the state.
Connecticut is a great place to raise a family and we have wonderful schools and tremendous talent. We need to get back to a sustainable, and most importantly attractive, pathway forward. I am willing to ask the tough questions and to have the hard conversations.
Mark Boughton, a Republican eight-term mayor of Danbury, is exploring a run for statewide office in 2018.