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Connecticut High-Cost State for Business, but Low Cost for Business Taxes

June 3, 2010

NEW HAVEN, Conn. - Connecticut has a reputation as being unfriendly to business, but a recent analysis of data from all the states shows that by at least one measure, that rap seems to be unwarranted. Figures from the Council on State Taxation indicate when states are compared based on economic activity in the private sector, Connecticut has the fifth-lowest level of corporate taxes in the country.

Senior policy fellow Orlando Rodriguez with Connecticut Voices for Children says that revelation comes from crunching corporate, property, sales and excise taxes.

"People confuse taxes with the cost of doing business. Connecticut, yes, is a high-cost state to do business in, but taxes are just one component."

Bonnie Stewart, vice president of the Connecticut Business and Industry Association (CBIA, disputes that analysis, but agrees Connecticut is a high-cost state. She says the CBIA does not support anything that would further discourage investment in Connecticut.

"And that would be modifying the tax policies in a manner that wouldn't incent behavior here, such as eliminating some of the tax credits that encourage companies to do research and development, and other things we think are good for Connecticut."

Rodriguez notes that Connecticut ranks near the bottom in job creation among all the states. He also points to other high costs of doing business.

"In order to start luring those companies here, what we need to do is say, 'Okay, it's not the corporate tax -- it's something else. It's energy, it's unemployment insurance, it's health care.' Let's focus on those things."

Connecticut has the highest energy costs of any state except Hawaii.

Melinda Tuhus, Public News Service - CT