In Connecticut and Vermont, at least, state tax laws exist in two worlds. It’s a serious problem.
When income taxes are reduced, and most recently, when they went up last year in Vermont, the elimination of the federal deduction for state and local taxes made for big bucks — or really big no matter who you’re talking about. At least that’s what many residents in those states suspected. In Connecticut, Vermont, Maryland, New Jersey, New York and California, many people were surprised to learn how much more income they will be paying into the state treasury — in either direction.
If you are among those taxpayers, Connecticut’s political party structure provides some relief. The Connecticut federation of Democratic clubs, the Democratic Coalition — i.e., the most important co-op of Connecticut Democrats after the governor’s office — recommends giving the income tax deduction back, regardless of whether the state raises its tax rate.
For its part, the Democratic gubernatorial candidates are not on the same page. Ned Lamont and Joe Ganim generally agree, but others are for tightening the deductibility when Vermont or Connecticut increases its tax rate in the next 10 years.