For Immediate Release: 5/19/2016
Contact: Zachary Janowski
Mobile: (860) 384-5777
Connecticut collected 360 different taxes and fees last year
200 sources account for .15 percent of revenue
May 19– Connecticut collected 360 taxes and fees from residents, businesses and visitors to our state, to raise $19.8 billion in revenue in fiscal year 2015, according to a new Yankee Institute report. Yet the bottom 200 revenue sources generate only $29.6 million, funding .15 percent of state spending.
Read the report here: http://www.yankeeinstitute.org/policy-papers/taxes-and-fees-2016/
State officials don’t know whether it is worth collecting many of these taxes and fees because they don’t know how much it costs to collect them. The state tax panel, which finished its work in January of this year, was supposed to look at the cost of administering the state’s taxes and fees, but the final reports do not include a thorough examination of administrative costs.
Eliminating some or all of the nuisance taxes would provide some relief to the people of Connecticut and increase the efficiency of state government. After all, the cost of collecting some fees might exceed the revenue.
The personal income tax generates 41 percent of state revenue. The sales tax generates 20 percent of revenue. The next largest categories are:
- Corporate income tax, 4 percent
- Each of the two gas taxes, cigarette taxes, lottery payments and a category of federal health care grants, 2 percent each for a total of 10 percent
- Driver’s license fees, the hospital tax and payments from each of the two casinos, 1 percent each for a total of 4 percent
- The remaining 348 taxes and fees generate 21 percent of state revenue
Since 1970, state spending has nearly quadrupled. Population and per capita income grew over the same period, but not nearly as rapidly. Spending grew 10 times faster than population and twice as fast as income growth.
The 2014 version of the Yankee Institute Taxes and Fees report found Connecticut had 365 taxes and fees, one for each day of the year. The new report does not include the largest Medicaid grant to Connecticut to conform with the budget approach that separates federal Medicaid funding from the rest of state spending.
The Hartford-based Yankee Institute for Public Policy works to transform Connecticut into a place where everyone is free to succeed.