For Immediate Release: 4/1/2016
Contact: Zachary Janowski
Mobile: (860) 384-5777
CT Unions Have a Double Standard on Taxation
Unions Charge Low-Income Members More to Belong
April 1 – Many Connecticut unions advocate for a tax structure that increases rates as incomes rise, yet none of the unions representing state employees use this approach to fund their own operations.
The Yankee Institute’s latest policy brief, A Double Standard: Union Tax Policy vs. Union Dues, takes a look inside union finances. Its findings highlight the hypocrisy of union advocacy for more progressive tax rates.
As member incomes rise, Connecticut unions fail to increase the cost of membership in a progressive manner. Instead, the unions use a variation of fixed per capita rates, flat percentages and other regressive approaches to distribute the cost of running a union.
Right now, Connecticut has seven income-tax brackets. By contrast, if Connecticut raised money the way unions do, tax rates would be assessed per person or based on a single rate, often with a maximum dollar amount. A union-style per-person tax would cost each working person in Connecticut about $6,000, or nearly $120 per week. Another union-style approach would be a flat 5 or 6 percent tax rate with a maximum contribution of, say, $10,000.
“Unions probably have good reasons for limiting the cost of membership as incomes rise,” said study co-author Zachary Janowski, director of external affairs for the Yankee Institute. “All members of the unions probably get similar benefits. Increasing the rates on high-income members, might make them less likely to join. And for the same reasons Connecticut might not want to increase taxes on the wealthy.”
“When setting tax rates, Connecticut policymakers should be guided more by what the unions do than what they say,” Janowski said.
The Hartford-based Yankee Institute for Public Policy works to transform Connecticut into a place where everyone is free to succeed.