Connecticut needs to end a budget crisis caused by over-reliance on finance, unfair tax loopholes, and corporate giveaways. Workers have stepped up and sacrificed again and again, while the wealthiest few have continued to benefit from our state's dangerous regressive taxation. Enough is enough. The Economic Policy Institute's 2017 analysis demonstrates that Connecticut has ample room to raise additional revenue from top earners[1], and we demand that we do just that. With that revenue, we can invest in our state and diversify our economy.

Here are four fair and sensible alternatives to the damaging and reckless cuts being proposed to our schools, hospitals, and essential services:

1. Higher Tax Rate on the Wealthiest Few (Over $2 billion annually if their effective tax rate were brought in line with that of working people)
Connecticut continues to have a lower top marginal income tax rate than New York and New Jersey, and that's before tax avoidance is factored. While the effective tax rate for Connecticut's poorest 20% of workers is 11%, the wealthiest 1% pay half of that -- an effective tax rate of 5.5%.[2] Closing that gap to make the wealthiest few pay as much as the rest of us would generate over $217.3 million for every half of a percentage point.[3]

2. Closing the Carried Interest Loophole ($535 million annually)
Right now, hedge fund managers nationwide exploit a tax loophole called the Carried Interest Loophole, by masking their regular income as income on investments. By closing this loophole and making sure that wealthy hedge fund managers at least pay as much as other wealthy residents, Connecticut would raise $535 million per year.[1]

3. Reducing Corporate Tax Breaks (a 20% cut alone would raise over $140 million this year)
Connecticut relies less on business tax revenue than any other state in the nation.[1] Much of the current fiscal burden has been caused by a decline in corporate tax collection caused by massive business tax credits and sophisticated corporate tax avoidance, dropping corporate tax collection from 13.2% of the budget in 1991 to less than 4% of the budget in 2015.[3] Our state has the highest cost of corporate expenditures in the country, with $707 million in business tax breaks being handed out in 2017 alone.[4]

4. Low Wage Employer Fee ($305 million annually)
When large corporations like Wal-Mart and McDonald's pay their employees such low wages that they depend on public benefits just to get by, that comes at cost to taxpayers. By instituting a Low Wage Employer Fee, those immensely profitable corporations would pay a fee for every employee making less than $15 an hour, helping to cover the costs of the state-funded programs on which their own employees are forced to rely. This would raise $305 million annually.[3]

We are calling on you to do the right thing, and to do the smart thing. It's time for the state legislature to step up and have the courage to make the wealthy pay their fair share. It's time to rely on a people-focused economy and to end our over-reliance on hedge funds.

_______________________________________________________

[1] http://www.epi.org/publication/recommendations-for-states-facing-budget-shortfalls-focus-on-connecticut/

[2] https://itep.org/wp-content/uploads/ct.pdf

[3] http://www.ctvoices.org/sites/default/files/Revenue%20Options%202017%20FINAL%20updated.pdf

[4] http://www.ctvoices.org/sites/default/files/Business%20Tax%20Breaks%20Final.pdf