Connecticut has an insane tax break
Connecticut has an insane tax break
Private jets? Really?
For the lucky individuals that live in Alaska, Delaware, Montana, New Hampshire, and Oregon the price that’s on the tag is the price you pay at the register. That’s because these five states have no state sales tax. For the rest of us, buying one item at the dollar store means shelling out more than $1.00. In my lovely home state of Connecticut, the sales tax is 6.35% on most items - so one item at the dollar store costs $1.06.
Connecticut, like most states with sales taxes, has carved out various exemptions to the state sales tax. For some goods, like cigarettes or gasoline, the state sales tax is higher. For other goods, the state sales tax is zero. Looking at the list of state sales tax exemptions, most could probably guess what is on there. Groceries are exempt from the sales tax, while meals are not. So buying a steak at Stop & Shop and grilling it at home will be tax-free while buying a steak at the local steakhouse will be taxed. Interestingly, the sale of candy is taxed, but food from coin-operated vending machines is not. What happens if you buy candy from a coin-operated vending machine? My best guess is it creates a hole in the space-time continuum.
Also not taxed are prescription drugs and other medical goods and equipment. cannabis “sold for palliative use under the provisions of chapter 420f” is not taxed, but other cannabis is taxed. Bike helmets are not taxed, and neither are children’s car seats. Diesel fuel is taxed unless it’s being sold as heating oil and is used to heat a building, in which case it is not taxed. Shoe repair is also not taxed, a strong win for the cobbler lobby.
Most of the tax exemptions are of dubious economic efficiency, but they make political sense. Woe to the politician that announces, “If you elect me, the first thing I’ll do is tax food and medicine!” Never mind that purchasers of medicine are disproportionately wealthy so taxing medicine is actually a progressive tax. And it’s silly, but I guess I’m fine with bike helmets not being taxed. It’s not like states are getting rich off of taxing bike helmets.
Also on the list, however, are “aircraft having a maximum certificated takeoff weight of 6,000 pounds or more” and “repair or replacement parts exclusively for use in aircraft and aircraft repair services” [bold in original].
Connecticut doesn’t tax private planes! Or repair parts for private planes! This is a disgrace. Connecticut likes to tax everything. One analysis ranked the Nutmeg State as having the fifth highest tax burden. The property taxes in most of the state are punishing, peaking at an astonishing 7.4% in Hartford. Note that property tax doesn’t just mean housing in some cities. In New Haven, for example, residents have to pay property tax on their cars. The property tax in the Elm City is 4.388%, so if a resident has a car that’s valued by the city at $20,000, they have to pay $877.60 every year just to keep the vehicle. And if someone decides to sell a used car in a private sale, a car that sales tax was paid on when it was bought from the dealer, the buyer has to pay sales tax again!
Connecticut likes to tax everything. Except, apparently, private jets. This is, to repeat, disgraceful. ONLY wealthy individuals buy private jets. This is a tax break for the wealthy and only the wealthy. And this is in a state that has been run solely by the Democratic party. The Democratic Governor, Ned Lamont, insists his budget will reduce inequality. The head of the State Senate, Martin Looney, says “Equity must be at the heart of a CT tax reforms.” Well here’s a slam dunk - tax planes like you tax cars!
Will this save the Connecticut tax base? Absolutely not. The revenue from taxing planes and plane repair will be relatively minor. In politics, however, symbols matter. Taxing a 2005 Camry that Bob sells Joe but not taking a 2005 Learjet that Atherton sells Edmund is bad economics and terrible optics. It’s an obvious problem with an easy solution. Let’s fix it.