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While the CPI's policy research involves proactive research-based recommendations for Connecticut government, the blog is a forum for shorter, reactive analysis and commentary on ongoing developments in Connecticut. 

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State to Review Tax Incentives Policy

  • Jan 13, 2012
State to Review Tax Incentives Policy

On Thursday, Governor Malloy signed an executive order creating a nine-person panel to review the effectiveness of tax credits in creating jobs. Interestingly, Governor Malloy's own $900 million jobs bill passed last year was focused largely on these very sort of tax incentives.

The taskforce, called the Governor's Business Tax Policy Review Taskforce, comes at the urging of state Comptroller Kevin Lembo.  Several Connecticut politicians have been calling for such a review for some time.

In the CPI's recent policy paper on Connecticut Job creation, the Institute lays out a three-part test for assessing whether job-creation tax incentives are good policy.  The CPI is skeptical of most targeted job creation tax incentives, instead prefering a holistic set of state policies conducive to economic activity and organic job growth.   

Reports differ on how Connecticut's total business tax burden compares to other states.  The Council on State Taxation ranks Connecticut has having among the lowest total effective tax rates for businesses.  But the Tax Foundation ranks Connecticut as having among the worst state business tax climates.  The differences can be accounted for in different metrics used to measure tax burdens.

What are your opinions on Connecticut's current business tax policy? Is heavy reform in order?  And if so, what should reform entail?