Posted on 04/15/2002 8:19:18 AM PDT by the
Painful as it might be, as you pop your income tax returns in the mail today, you might want to say a small thank you to Connecticut's ultra-rich, and the New York financial markets that made them that way.
In recent years, taxpayers in a handful of towns with the highest average state income tax payments - most of them in Fairfield County - have produced a huge chunk of Connecticut's income tax revenue, according to the state Department of Revenue Services.
In 2000, for example, taxpayers in just 15 of Connecticut's 169 towns paid $1.1 billion - one third of the total payments made by individual taxpayers who filed state 1040EZ or 1040 forms in 2001.
New Canaan, Greenwich and Weston, the towns with the highest average income tax per return, alone accounted for $484 million in payments from about 37,000 tax returns.
In comparison, individual taxpayers in Connecticut's three largest cities - Bridgeport, Hartford and New Haven - paid $94 million on 127,000 returns.
And though the recent economic slowdown is causing a revenue crunch, Connecticut tax officials say they expect those who gained the most from robust financial markets will continue to contribute the most in taxes.
Tax collections for the current fiscal year are about $139 million behind last year's pace, but Fairfield County should continue to power the state's revenue engine, said Ernest Adamo, a senior analyst and legislative liaison for the revenue services department.
Greenwich accountant Thomas J. McGoldrick noticed the effects of Wall Street's bearish year on the tax returns he prepared this year.
The downturn in the stock market has pared the size of the typical income tax payment in Greenwich, where virtually every return McGoldrick prepares includes some kind of capital transaction.
"It's pretty much tied to the market," McGoldrick said of the drop.
In the same Greenwich zip code - 06831 - where McGoldrick prepares tax returns, taxpayers reported $160 million in interest income alone, according to IRS data from 1998, when the markets were still surging. That was an average of more than $26,000 a tax return.
Their incomes swollen by financial returns such as those in recent years, taxpayers in New Canaan and Greenwich paid more than $13,000 per state return on average last year. That was a 30-percent jump from the average payment made by New Canaan and Greenwich taxpayers just two years earlier.
This year, the party ended; the taxman will suffer the hangover.
"There's been a significant loss in investment appreciation in the last year," McGoldrick said of the Greenwich tax returns he's seeing.
With few exceptions, Connecticut's income tax take diminishes with a town's relative distance from Wall Street.
Avon and Simsbury were the only Hartford County towns to crack the top 15 taxpayer towns. Woodbridge, Lyme and Sharon also made the list. But every other town among the top taxpayers was in Fairfield County.
Some in those wealthy towns are not happy that so little money they send to Hartford returns in state aid.
"We also realize we're an affluent community and there are other communities that have great needs; we just think we should share a little bit more" in state revenues, said New Canaan First Selectman Richard P. Bond. "You tell them up there [in Hartford] we'd like to get a little better share."
Total state revenue from 1040's (in 2000) $3.3B
Population of New Canaan, Greenwich and Weston 90,500 Tax for these three towns' residents $ 484M
Average per-resident tax = $ 5348
Population of Bridgeport, Hartford and New Haven 385,000 Tax for three largest cities $ 94M
Average per-resident tax = $ 244
Ratio of average per-resident tax paid to CT between highest taxed town and the largest cities
5348 21.8 -------- = -------- 244 1
Total state revenue from 1040's (in 2000) $3.3B
Population of New Canaan, Greenwich and Weston 90,500
Tax for these three towns' residents $ 484M
Average per-resident tax = $ 5348
Population of Bridgeport, Hartford and New Haven 385,000
Tax for three largest cities $ 94M
Average per-resident tax = $ 244
Ratio of average per-resident tax paid to CT between highest taxed town and the largest cities
5348 21.8
-------- = --------
244 1
There was NO state income tax in Connecticut when I was a kid (I grew up in CT's socialist neighbor to the south). RINOs and Dem Socialists changed that.
Personally, it is the PROGRESSIVE (anything "progressive" is usually socialist isn't it) income tax that pisses me off! If anything, we should abolish the income tax and put in a national sales tax that EVERYONE PAYS, including the tax eaters who currently DON'T pay anything, yet receive the EITC and other bennies from the Feds.
If any one would like to be removed from my CT Bump list, please let me know and it will be done ASAP. Conversely, if you would like to be added the same holds true.
Just had to mail those a$$holes another $2500 today on top of my withholding all year long. Upper-middleclass is bad enough, I can't imagine cutting a check in the amount some of those folks in the upper eschelon have to. I'd hide it anywhere I could.
Unfotunately, there is NO place within commuting distance of NYC that has low or even moderate taxes.
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