Republican gubernatorial candidate Betsy McCaughey promised Friday to phase out the state income tax altogether if she’s elected.
It’s a promise other Republicans have failed to fulfill in Connecticut, but McCaughey said it could give Connecticut a competitive advantage over other states in the Northeast.
“Good-bye to dying New York, and welcome to booming Connecticut,” she said during a press conference at the Legislative Office Building in Hartford.
Former Gov. John Rowland never delivered on his promise, despite a decade in office, while Bob Stefanowski made the elimination of the income tax the cornerstone of his losing 2018 effort against Gov. Ned Lamont (D-Connecticut).
McCaughey, a Newsmax host and former lieutenant governor of New York, said her plan was different because she would make incremental cuts to the income tax as state revenues met certain benchmarks.
She did not have specifics on Friday, instead saying she would put together a panel to come up with a plan modeled after actions in states like South Carolina.
McCaughey said the state would make up for the revenue by attracting businesses and giving residents more money to spend, thereby increasing collections from the sales tax and other revenue sources.
The state is expected to receive roughly $13.6 billion in income tax revenue, slightly more than half of all state revenue. By comparison, forecasts project $5.3 billion in sales tax revenue.
Some economists question whether eliminating the income tax will spur sufficient economic growth to offset lost tax revenue elsewhere.
University of New Haven professor Patrick Gourley said people could spend some of that money in other states or use it for purposes that don’t generate tax revenue.
“Just because some of those additional earnings people get to keep, they’ll save themselves or invest and not spend,” he said.
McCaughey pointed to a report from the conservative-leaning American Legislative Exchange Council that ranked Connecticut’s economy 48th based on data from 2013 to 2023 as a sign that the state’s economy needs a jump start.
“Governor Ned Lamont, moneybags Lamont, claims that the state’s economy is resilient,” she said. “That’s a lie; this state’s economy is almost dead.”
More recently, the U.S. Bureau of Economic Analysis said Connecticut’s economy had the 4th best growth rate during the third quarter of last year, a stretch that covers July through September.
Lamont defended his economic record, including his proposal and negotiation of an income tax cut in 2023.
“I think every 4 years for 30 years, Republicans said we’re going to eliminate the income tax,” he said after a press conference in Wethersfield. “Who’s the one guy who actually cut the income tax?”
Even some Republican gubernatorial candidates were dubious of McCaughey’s pledge.
Sen. Ryan Fazio, (R-Greenwich), touted his own plan to fund a tax cut, averaging $1,500 per person, using spending cuts and savings in the budget. Some of those savings would come from reduced pension payments.
“Empty promises are just that, they can never become reality, unless there’s a leader who can articulate them and deliver them,” he said. “I’m that candidate.”
Former New Britain Mayor Erin Stewart, who is also seeking the nomination, declined to comment.
