How many times have we heard the canard that it's the rich who bear the tax burden, carrying all the takers along? Not quite in Connecticut, one of the richest per-capita states in America. Here are the figures from an item in today's newsletter from the Tax Policy Center:
A new report from Connecticut’s Department of Revenue Services shows that 725,202 households that earn up to $48,000 a year paid $3.5 billion in state and local taxes. As for the 4,003 households with incomes over $2 million? They paid $1.9 billion. DRS commissioner Kevin Sullivan noted that the data highlight the state's reliance on income taxes and the regressive nature of Connecticut’s sales tax.
The TPC newsletter also had this item on the sources of Americans' income over the years:
The latest TPC Tax Fact by Bob Williams and Lydia Austin, shows that the composition of reported income on federal tax returns has changed a lot since 1952. While wages and salaries remain by far the biggest source of reported income, their share dropped from 80 percent in 1952 to 71 percent by 2012. Investment income rose steadily from the 1950s through the mid-1980s but has fallen somewhat since in part due to low interest rates. Business income sagged from the ‘50s to the mid-‘80s but has rebounded since, probably because so many business owners report income on their 1040s.
Investment income, of course, is taxed at preferential rates (though a bit less preferential, starting in tax year 2014, for those making really big bucks.) Is there any good, public policy reason for lower rates on investment income than on wages and salaries? None whatever.