Eliminating the Connecticut state income tax was a political rallying cry more than two decades ago for former Gov. John G. Rowland, former state Sen. Tom Scott and others.
The task has become far more difficult as the tax has grown to bring in more than $9 billion per year — raising more than double the amount of the state sales tax and becoming the single largest revenue generator by far in the state budget.
Now, Bob Stefanowski, a new Republican candidate for governor, said Monday that he would eliminate the state income tax in eight years if elected. And Stefanowski touted the support of one of the biggest names in the Republican tax-cutting world: economist Arthur Laffer.
As friends for more than 20 years, Laffer and Stefanowski are traveling around the state on a two-day tour to spread the supply-side message in Windsor, Hartford, Norwich, North Haven and Norwich.
Laffer told reporters and some Republicans that Connecticut needs to emulate Tennessee, his adopted home state for the past 12 years that has no state income tax or estate tax.
“If it works in Tennessee, it will work in Connecticut. Believe me when I tell you,’’ said Laffer, who moved from southern California. “There is a state that has done exactly what Bob Stefanowski intends on doing here in Connecticut, and it works. We have been to the future, and it works. … I am right there 100 percent with Bob Stefanowski. I think he is the best gubernatorial candidate I have seen in any state, anywhere, any time. Period.’’
Praised by Republicans and often scorned by Democrats, Laffer gained national fame by popularizing the “Laffer curve’’ that summarizes his belief that cutting taxes will generate huge economic growth under supply-side economics. A graduate of Yale University, Laffer, 77, has served as a prominent economic adviser to Presidents Ronald Reagan and Donald Trump.
Another nationally known tax-cutter, Larry Kudlow of Ridgefield, was scheduled to be on the traveling road show, but he felt ill and did not travel to Hartford on Monday.
“He does have a copy of the plan,’’ Stefanowski said. “He likes it. Anything with lower taxes, he likes.’’
But even supporters said that eliminating a tax that generates about half of Connecticut’s general fund revenues would be a highly difficult task.
“On a scale of 1 to 10, it’s probably a 9.99 because we’ve become addicted to it,’’ said state Sen. Len Suzio, a conservative Republican who attended the Laffer presentation at the Society Room in Hartford. “If there’s anybody who can pull something off like this, Bob certainly has the experience, the education and the background to do it.’’
In addition to eliminating the income tax over eight years, Stefanowski wants to eliminate the state’s estate and gift taxes immediately, and end the corporate income and business entity taxes over two years. The income-tax phase-out would not start until the third year, and it would include revenue triggers to change the tax levels in order to ensure that the budget is balanced each year. He said he would not favor installing tolls or increasing the 6.35 percent state sales tax.
A former chief financial officer of UBS Investment Bank and high-level executive at GE Capital, Stefanowski had far more details on his tax plan Monday than on exactly how the state would solve its unfunded pension liability.
“I don’t have all the answers to all the detailed questions today,’’ Stefanowski said. “We got here by politicians making promises to state employees and not funding it. And my plan is going to turn it around by creating economic growth. … I’m not talking about specifics of a pension plan right now.’’
Scott, the longtime tax-cut advocate, also attended the gathering and endorsed the plan. He wants to see economic growth and budget proposals from the rest of the field vying for governor.
“Now let’s see everybody else’s plan, and let’s compare and contrast,’’ Scott told The Courant. “I haven’t seen any plans, to be honest with you, and I’ve been looking.’’
Scott then mentioned Stefanowski’s name in the same breath with one of the best-known presidents of the past 35 years.
“Art Laffer said Bob reminds him of his friend, Ronald Reagan,’’ Scott said. “Art said Bob Stefanowski can do for Connecticut what Ronald Reagan did for America. As an old Reagan guy, that’s music to my ears. I love that line.’’
But a Democratic candidate for governor, Middletown Mayor Dan Drew, blasted Stefanowski and Laffer.
“Trickle-down economics is a fraud,’’ Drew said. “It is a myth. It is a tax heist that steals from the middle class to give to the wealthy, and we must stop them. Arthur Laffer is one of the people responsible for 40 years of failed economic policy. As one of his top advisers, Laffer helped Ronald Reagan convince people that lowering tax rates for the wealthy would make the rest of us rich. He set the U.S. on a path that has put 80 percent of gains in the hands of the 1 percent.’’
Stefanowski said that he knows there are questions over exactly how much economic growth the tax cuts would provide — and exactly where budget cuts would be made.
“This plan could be 25 percent right, and it’s better than what we have now,’’ he said.
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