Republican Bob Stefanowski’s signature campaign proposal is his pledge to repeal the state’s income tax.
Here’s why following through on that pledge, even in a modest way is difficult.
The income tax is Connecticut’s largest single revenue source. It provides more than $9 billion to the state budget which is slated spend more than $19 billion in the next fiscal year.
Stefanowski said after last night’s debate that trimming the cost of government is what he wants to do in the short term, but still pledged to cut the income tax.
"We're going to do it gradually over eight years. Which we've spoken about before,” Stefanowski said. “It's going to be tied to revenue triggers. We're not going to do anything in the first year, we're going to focus on cost. We're going to cut a billion dollars out of the discretionary part of the budget. We're going to call a fiscal state of emergency in Hartford."
While it’s of course possible that Stefanowski can find some, “waste, fraud or abuse,” as he’s put it, or eliminate programs, on percentage of budget, those cuts would be minimal at best.
A cut of the income tax, in any way, could lead to massive tax hikes elsewhere. For instance, in order to make up half of the revenue the income tax brings in, Stefanowski could propose increasing the sales tax by more than double from 6.35 percent to 13.25 percent. That would bring in more than $4 billion. He could also eliminate 59 varying sales tax exemptions and tax credits that could total another $4 billion, which would just about make up the loss of the income tax.
However, the sales tax is a regressive form of taxation, meaning the less money you earn, the more a higher tax on goods impacts you as a consumer. The poor would be disproportionately hurt by such a move.
In addition, the political stars would have to align in order for the income tax cut to become reality. Democrats still control the State House of Representatives and maintain a tie in the State Senate. If they hold one or both chambers in the November election, that could throw cold water on the income tax elimination Stefanowski covets, because it would likely be dead on arrival in his first year as governor.
