For Immediate Release: 1/22/2016
Contact: Zachary Janowski
Mobile: (860) 384-5777
Reform the Estate Tax
Connecticut is losing people and revenue to other states
Jan. 22 – Connecticut should welcome successful people who pay a large share of the cost of state government. Instead, policies like the estate tax push them away. Rather than collecting extra money from the rich, the estate tax drives them to Florida and other low-tax states – leaving the rest of us to pick up the tab for the other taxes they once paid.
The Yankee Institute highlighted these concerns in a policy brief released today, A Better Place to Die: Reforming Connecticut’s Estate Tax.
Connecticut is the only state that taxes gifts and one of only 14 that tax estates.
From 2011-2013, about 30,000 people left Connecticut for states without estate taxes, while about 5,000 people came to Connecticut from states with estate taxes. The income differential was even more profound. Arrivals brought with them $233 million; former residents fleeing to places without estate taxes took $3.83 billion with them.
Gift and estate taxes are a volatile revenue source and account for less than 1 percent of general fund spending. Nearby states, including Maine, New York and Rhode Island, are reforming their estate taxes. Connecticut risks being left behind
“Connecticut is losing very affluent residents to other, more welcoming states,” said Carol Platt Liebau, president of the Yankee Institute. “When they leave, we lose their contributions to their communities, our whole economy and to the state’s treasury. If we are serious about convincing them to stay, we must reform the estate tax.”
With the recent departure of General Electric, lawmakers need to focus on reforms that will make Connecticut more competitive. A Tax Foundation study released earlier this week found that Connecticut residents face the second-highest state and local tax burden in the nation.
The Hartford-based Yankee Institute for Public Policy works to transform Connecticut into a place where everyone is free to succeed.