Tax Foundation: Connecticut has second largest tax burden in the country

March 22, 2022

Yankee Institute

By Marc E. Fitch

Connecticut has the second largest tax burden in the United States, according to a new report by the Washington D.C.-based Tax Foundation, which measured the economic impact of taxes on residents in each state as a percentage of their income.

Also known as “tax incidence,” the study found Connecticut residents have an effective state and local tax rate of 12.8 percent and includes taxes paid by Connecticut residents to other states, such as an individual who lives in Connecticut but works in New York and therefore pays New York taxes.

New York had the highest tax burden in the country at 14.1 percent, while the national average was listed as 10.9 percent and, the authors note, slight changes can lead to dramatic shifts in the measurement of a state’s tax burden.

Connecticut’s position as having the second highest tax burden in the country has not changed since 2017 when the Tax Foundation began compiling the annual report.

“New York, Hawaii, and Connecticut have occupied the top three spots on the list since 2017,” the report notes. “This may be partially attributed to high expenditure levels, which must be sustained by high levels of revenue.”

According to the Tax Foundation’s report, overall the average tax burden across all 50 states has decreased since from 11.7 percent in 1977 to 10.3 percent in 2019. Meanwhile, Connecticut’s tax burden has increased from 12.1 percent to 12.8 percent during that same time period.

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