The Daily Campus

Issue date: 4/3/07 Section: Commentary

Connecticut's state income tax needs refinement. Just in time for the tax season, The Hartford Courant reported Connecticut is the only state with an income tax to have not adjusted their income tax thresholds for inflation since 1991, according to an analysis from the Center on Budget and Policy Priorities.

The threshold determines at what income level the state begins to collect income tax. Connecticut used to have the largest income tax threshold 16 years ago but now lower-income families pay larger portions of their income to the state as a result of the tax threshold dropping from 73 percent above the federal poverty line in 1991, to 17 percent above the poverty line currently.

Wages, the cost of living and the poverty line have all fluctuated but the Connecticut state income tax threshold has remained constant. This makes living in the state extremely difficult for low-income families earning just over $24,100, which is the original threshold from 1991 that is still used. It is a mystery why Connecticut is the last state to act on this issue - Alabama beat Connecticut to it by recently passing legislation to raise their threshold. It has certainly been long enough since the threshold was adjusted and it is time for the state to act.

Adjusting the threshold accordingly on a more frequent basis is also something that should be considered so as to better reflect changes in economy and maintain a fair and beneficial system for the lowest earners in society.

There is also proposed legislation for an earned income tax credit program in Connecticut to aid poorer families teetering just above the poverty line by reducing the amount of income tax they would pay. While earned income tax credit could lessen the burden for struggling families, and similar programs are in place in 21 other states according to the Courant's story, legislators must scrutinize how much this would cost the state and any possible affects on other tax payers. Should the need and benefit outweigh the cost, it may be a viable option in combating poverty in Connecticut.

The simplest and first thing that should be done is to adjust the state income tax threshold for inflation and bring the state tax code into the 21st century. Connecticut was once again ranked number one in the country for highest per capita income amongst its residents for 2006, according to an Associated Press story, but this must not overshadow the substantial amount of low-income residents and where the true need for tax relief lies in the state. It is the right time to update this code, and again make Connecticut a leader in progressive taxation.

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