On July 27, 2011, the Hartford Courant published an article, “Next Week’s State Income Tax Bite? Not So Big For Most Workers”, written by Mara Lee, a business reporter on its staff. In that article, Mara Lee remarks that the state income tax is higher on people with higher incomes, reporting that it will not hurt the bottom half of workers and most retirees. However, what is disturbing to me is the impression that her article leaves with the reader: that is, any criticism of the new tax bill on the grounds that it fails to spread fairly the tax burden on all groups is unfounded and mere class warfare.
Unfortunately, Mara Lee and Peter Brown, assistant director for Quinnipiac University’s Polling Institute, whom Mara Lee quotes in her article, miss what the public has not: that the super rich, as always, got off very lightly with this new tax law.
Of all the individuals, those with Connecticut taxable incomes of $500,000 are hurt the most by the new tax law. However, all those S&P CEOs in Fairfield County, who earn on average $9 million annually, were given a pass. Let’s run some numbers to illustrate.
Assume a physician or an attorney practicing in Connecticut has taxable income of $500,000. Under the previous tax bill, this individual’s tax liability would have been $24,800; however, under the new tax bill, this individual’s tax liablity would now be $31,050, representing a 25.2% increase in taxes.
Now let us examine the effect of the new tax bill, Senate Bill No. 1239, on the Connecticut income tax liability of the average $9,000,000 salary of an S&P CEO, a number of whom live in Fairfield County, Governor Dannel Malloy’s home territory. Although this individual’s state income taxes would increase $23,250 over that under the previous tax rates, percentage-wise it is a modest 4.03% increase in taxes: a percentage increase 20.9% less than that born by the middle-class professional citizen.
The article’s suggestion that Senate Bill No. 1239, Governor Dannel Malloy’s recent tax bill, is fairly progressive, equitably increasing taxes on the wealthy, misrepresents the actual nature of the bill: it unjustly favors the wealthiest citizens in Connecticut, targeting the middle and upper middle classes in Connecticut, as clearly evident in these two examples.
One can only wonder if Mara Lee bothered to read Senate Bill No. 1239 and investigate the tax effects of the tax bill on the various economic classes since she failed to mention the material discrepancy in tax rate increments between those individuals with taxable incomes of $500,000 per year and those with taxable incomes of $9,000,000.
If you, too, wish to see the wealthy, the super rich, the Wall Street barons who caused the collapse of our economy in 2008 and stole trillions without one being convicted and sentenced for the crime of the millenium, then sign the petition below to raise their taxes.