HARTFORD, CT — There might already be a partisan deal on a two-year state budget, but that didn’t stop one union from continuing to ask the state’s wealthier residents to pay higher taxes.
SEIU 1199 debuted an ad Wednesday that features the CEO of CareCentrix, a home health services company that received about $24 million in state assistance for creating 290 jobs over a five year period. The company, which has offices in both Hartford and Stamford, now has 400 employees.
In the TV ad, John Driscoll, the company’s millionaire CEO, said “successful people and successful corporations have to pay their fair share.” He said his company isn’t going to leave this state “just because we have to be part of a budget solution.”
The legislature’s Finance, Revenue, and Bonding Committee is expected to meet Wednesday afternoon to adopt a revenue package for 2018 and 2019. However, after raising taxes in 2011 and 2015 and seeing a number of marquee companies exit the state, lawmakers in both parties have steered clear of any increase in income taxes.
Progressives continue to argue that increasing taxes on the wealthy will help fill the budget hole. They said there are 17 billionaires who live in the state, along with hundreds of millionaires. According to CNBC, Connecticut ranks second in the nation in the percentage of millionaires in its population.
But most lawmakers and state officials don’t believe increasing taxes on the wealthy will actually benefit Connecticut.
The top 100 taxpayers returned $200 million less in revenue to Connecticut last year, according to the Office of Fiscal Analysis.
Why does that matter?
The top 1 percent pay about 30 percent of the income tax revenue in Connecticut.
But is the reason for the sharp drop in taxes from the rich because they are fleeing the state due to the tax burden?
There are actually several reasons, according to Department of Revenue Commissioner Kevin Sullivan.
“Yes, some people are retiring and moving out of state,” Sullivan has said. “Or they are moving to a more tax friendly state — but there is so much more than that involved.”
Sullivan said one of the biggest reasons why tax revenue from the state’s wealthiest is down is because the stock market is up.
“People are parking their money, not cashing it in,” Sullivan said, adding that it isn’t until the money is cashed in that Connecticut reaps the tax windfall from the wealthy.
The DRS commissioner and former Senate president said one of the problems when the stock market is performing well is that those who have a lot of money invested in it “sell and buy,” and that doesn’t immediately turn into money for the state of Connecticut.
What’s compounding the problem currently, Sullivan added, is that a lot of the country’s wealthiest are waiting to see if President Donald Trump’s promised tax cuts come through, so again money is being “parked.”