image description

Voices Speaking

November 3, 2015

Combined Reporting: Fair Taxation for Shared Prosperity

Declining revenue projections – contributing to Connecticut’s increasing budget deficit – illustrate why recent legislation to raise revenue by making business taxation more equitable was the right course for the state to take, even as some big corporations step up their attacks.

After a decade of serious discussion, the Connecticut General Assembly wisely conformed our state’s corporate income tax policy to that of 24 other states and D.C. – including every other New England state – by adopting a common sense policy known as mandatory combined reporting.

Despite the legislature’s decision to adopt combined reporting, some corporations that exploit its absence to avoid paying their fair share are making a last-ditch effort to convince policymakers to reverse the decision.

That would be a mistake. Let’s remember again why we adopted combined reporting:

  • Combined reporting nullifies a host of tax-avoidance strategies in one fell swoop, some of which can’t be stopped in any other way. Among the worst of these strategies is offshore profit shifting, using international tax havens to avoid state and federal taxes. This practice has increased dramatically over the past 35 years, with 20 percent of all U.S. corporate profits now booked in offshore havens, a tenfold increase since the 1980s.  In Connecticut alone, Fortune 500 companies hold $185 billion in offshore profits, with 64% of those holdings attributable to one company: General Electric (which has the second largest amount of profits held offshore by any U.S. company). Only in California and New York do Fortune 500 companies hold more profits in offshore tax havens.

  • Combined reporting levels the playing field for small businesses that typically operate as a single corporation or otherwise lack the resources to shift profits to out-of-state subsidiaries. The absence of combined reporting creates an artificial advantage for the large multistate corporate competitors. The Small Business Administration has reported that “states with combined reporting rules tend to have more small business activity.”
  • Combined reporting raises revenue needed to help preserve critical public services – many of which benefit businesses, like schools that produce skilled workers – and arrests future erosion of the corporate income tax base.

Connecticut companies seeking to maintain their competitive advantage argue that combined reporting will hurt state economy, but evidence is to the contrary:

  • From 2000 to 2014, 10 of the 15 states that had the best record of retaining manufacturing jobs required combined reporting, while just two of the 15 states that lost the greatest share of manufacturing jobs were combined reporting states.
  • A 2010 Voices analysis of 37 for-profit companies with more than 1,000 employees found that 32 (85%) of these companies already operated in states with mandatory combined reporting and 27 of these companies operate in five or more combined reporting states.
  • The more than 1,200 Connecticut companies that already elect combined reporting make up just 3 percent of total returns, while representing 46.3% of total state corporate tax liability.
  • Along with 24 other states and D.C., including every state in New England, combined reporting exists in so-called business friendly states, such as Texas, Utah, and Arizona.

Combined reporting closes tax-avoidance strategies, is small-business friendly, and raises much-needed revenue for the public good.  If pressure from a small number of large corporations seeking to maintain their unfair advantage over small- to medium-sized businesses succeeds in killing combined reporting it will be a big step backward for Connecticut. Every company that wants to benefit from all that Connecticut has to offer, including our highly educated workforce and our enviable quality of life, should contribute their fair share in return.

See the full policy brief here.



Issue Areas:
Budget and Tax, Family Economic Security
budget, combined reporting, Connecticut, taxes
April 11, 2017

Interactive Map: Governor's Cuts to Cities and Towns


The Governor’s budget would reduce the Earned Income Tax Credit, remove parents from HUSKY A, eliminate property tax support for the middle class, and cut municipal aid to 141 towns.

Statewide, proposed cuts to the EITC and the property tax credit are equal to a tax increase of $93 for low-income families and $157 for middle-income families. At the same time, the Governor’s estate tax proposal would be equal to a tax break of $100,000, on average, for some 600 taxpayers.

In our new interactive maps you can look at the town-by-town impact of these cuts on the property tax credit and EITC, as well as Care 4 Kids and changes to municipal aid funding. Information is available on how many residents in each town benefit from the EITC, property tax credit, Care 4 Kids and Husky A, another program at risk from cuts. 

We also created Individual fact sheets for each House and Senate district so you can share that information with your legislators. You can download them here

For more information on the Governor's Budget proposal, you can find our full analysis here

Issue Area:
Budget and Tax
budget, Connecticut, interactive, maps, municipal, town
May 24, 2017

Some Cuts Never Heal : The President’s Budget Proposals Threaten the Well-Being of Connecticut’s Children

Sharon Langer, MEd, J.D.


President Trump’s budget proposal represents a major threat to Connecticut’s economic prosperity, inflicts severe cuts to the programs that serve the most vulnerable children and families in our state, and could dramatically worsen the state’s current fiscal crisis.

The proposal slashes nutrition, health care, and other important assistance that helps hundreds of thousands of Connecticut residents meet basic living standards – food on the table, a roof over their heads, and access to health care – while giving new tax breaks to the wealthy and powerful and undermining the long term economic growth and prosperity of the state. The proposal would shift massive costs to Connecticut at a time when our state is already struggling to meet needs for education, transportation and other services. Currently, the state relies of federal funding for one-fifth of its budget.

“Slashing these programs would be both unwise and unfair,” said Ellen Shemitz, Executive Director of Connecticut Voices for Children. “Connecticut cannot afford to undermine its long-term wellbeing with program cuts that threaten the very foundations of healthy child development. We need to understand that some cuts never heal.”   

The President’s proposal includes the following cuts to key programs.

  • The budget would make deep cuts in Medicaid funding, jeopardizing health insurance and access to regular medical care for the more than 318,000 children insured through Medicaid in Connecticut—almost three out of eight children. Medicaid cuts would also endanger health coverage for the 121,000 elderly individuals in the state that rely on the program. The budget assumes these cuts would be in addition to the $880 billion in cuts from Medicaid in the bill the House recently passed to repeal the Affordable Care Act.
  • The President’s proposal would cut funding for the SNAP program (formerly food stamps) by a quarter, putting children at risk of going hungry and becoming sick. In February 2016, more than 233,000 households in Connecticut received SNAP; 35 percent had children.
  • The President’s budget proposal includes cuts to Social Security Disability, affecting 81,000 individuals in Connecticut, and Supplemental Security Income, with more than 64,000 recipients in the state.
  • The President’s budget provides only level funding for the Child Care and Development Block Grant. In Connecticut, unless funding for child care is increased, 1,600 children would lose their child care. 
Issue Area:
Budget and Tax
budget, Federal, Trump
June 26, 2017

Webinar: A Better Approach for the State Budget

Connecticut's budget is the clearest statement of its policy priorities. As such, it should prioritize revenue and expense options that advance long-term inclusive economic prosperity, improve equity, and prepare our children for success.

The current budget proposals adopt an austerity mindset.  

They contain little new revenue and, to the extent they do bring in additional revenue, do so by raising taxes on low- to middle-income families by cutting or eliminating the earned income tax credit and property tax credit. At the same time, they provide some 600 of the state's wealthiest families with an average tax break of $100,000. That's not shared sacrifice. It is not a recipe for long-term growth and shared prosperity. 

In this webinar, we provide an overview of the state budget, solutions to avoid yet another a cuts-only approach, and ways to take action. You can watch the presentation below. Click here to download the slides.

Issue Area:
Budget and Tax
#CTbudget, budget, Connecticut, Webinar
July 13, 2017

Infographic: a Better Approach to the State Budget

The state budget is the clearest statement of Connecticut's policy priorities. Connecticut needs a balanced approach that combines strategic spending with new revenue. See the our infographic below and full Revenue Options brief for more detail.

Click here to download the PDF.

Issue Area:
Budget and Tax
budget, Connecticut, priorities, revenue, taxes