Some Connecticut lawmakers want to get rid of the state income tax – but there's a catch. You'd have to live in one of Connecticut's poorest neighborhoods.
The proposal, approved by the Legislature’s tax-writing committee Wednesday night, would suspend the income tax in census tracts with at least a 30% poverty rate. Single filers earning up to $125,000 per year, or couples making $200,000, would qualify. Top earners could save $8,700 each year under the plan.
Federal income taxes and property taxes would not be affected. Renters could also qualify for the exemption.
“I would like that,” said Jose Torres, of Bridgeport. “Because, you know, I've been paying taxes like crazy.”
WHICH AREAS QUALIFY?
Torres lives in Bridgeport’s West End, one of the neighborhoods that would qualify for no state income taxes. Lifelong residents said the area could use new life.
“There's a lot of crime. A lot of crime,” said neighbor Irving Webb.
The proposal would also benefit parts of eight other communities – including Waterbury, New Haven and Hartford. It was introduced by Democratic state Sen. John Fonfara, who’s running for mayor of the capital city. Fonfara said the plan is meant to lift up impoverished neighborhoods.
“To be able to chip away at the concentration of poverty and all of its negative effects on people, on children,” he told fellow lawmakers.
WILL IT WORK?
No income tax is a powerful incentive, but is it enough to lure people to the state’s most impoverished areas?
“I can definitely see the attraction, and I wouldn't be put off by being in a poorer neighborhood in general,” said Sandy Murphy, a longtime Fairfield resident. “But I'm not looking to move.”
UPHILL BATTLE
The proposal faces tough odds. Republicans said they support tax relief, but aren’t sure Fonfara’s plan is logistically possible.
"We are basically erasing income tax for something that has nothing to do with income, but based on where you reside," said state Rep. Devin Carney (R-East Lyme). “I'm not sure that's legal.”
Also unclear is how much the plan would cost, since Connecticut does not break down tax collections by census tract.
Gov. Ned Lamont is skeptical.
“I like to do broad-based tax cuts that apply to everybody, not those that live within this zip code but not the guys across the street,” he said.
Under the governor’s proposed
tax cuts, families making less than $50,000 wouldn’t owe taxes anyway.
Lamont also opposes using state bonding, instead of general funds, to pay for Fonfara’s tax break.
“You do not borrow money to pay for tax cuts,” he said.
SOME RESIDENTS WARY
Back in the West End, some worry about getting priced out of the neighborhood.
“Something that's supposed to be a benefit to people? It's going to make it worse for them,” said Damon Vanduzen of Bridgeport. “These will become developments, and that's not good for the people who live here – who have been living here.”