Hartford Business Journal

HARTFORDBUSINESS.COM | APRIL 20, 2026 5 Politics & Policy GOP gubernatorial candidate Betsy McCaughey speaks at the state Capitol about her plan to eliminate Connecticut's income tax. Photo | Mark Pazniokas/ CT Mirror Feasibility Test GOP gubernatorial candidate McCaughey pushes to eliminate CT income tax; is it possible? them amid budget shortfalls. A January 2026 report from the White House Council of Economic Advisers examined the potential economic effects of eliminating state income taxes, concluding that such a shift — if paired with replacement revenue sources — could modestly increase economic output. "You can almost envision the trucks full of business equipment and furnishings moving … toward the states that are going to zero (income tax)," McGaughey said. "They're gaining population, they're gaining business development." Assessing those claims is difficult, in part because many of the recent tax-cut laws are relatively new, with several approved in 2022 or later. Kentucky, which adopted a trig- ger-based tax-cut law in 2022, has already implemented multiple reduc- tions. According to a March 4 report from the nonpartisan MOST Policy Initiative in Missouri, the law produced 0.5 percentage-point cuts in 2023, 2024 and again this year, lowering the state's income tax rate from 5% to 3.5%. The state, however, did not meet the benchmark for a cut in 2025. Even in states pursuing reductions, full elimination remains uncommon. Only a handful — including Texas and Florida — operate without a broad-based personal income tax, typically relying more heavily on sales taxes, tourism-related revenues and other sources. Economists caution that those states often have structural advan- tages, such as faster population growth or natural resource reve- nues, that may not translate easily to Connecticut. Feasibility questions Critics of McCaughey's plan say the scale of the income tax's role in Connecticut's budget presents a major obstacle. One skeptic is Mark Boughton, commissioner of the state Depart- ment of Revenue Services, which collects the state's taxes. Boughton, a former longtime Republican mayor of Danbury, ran for governor in 2018, when several GOP candidates — including him — backed plans to eliminate or phase out the state income tax. Stefanowski ulti- mately won the nomination. After nearly six years leading DRS, however, Boughton said eliminating the tax is not realistic. "I've been looking at these numbers for six years," he said, "and I will tell you that it's always possible to reduce your (tax) burden. But completely eliminate it? It's not possible." Economists say doing so would likely require a combination of deep spending cuts, increases in other taxes — such as sales or property taxes — or sustained economic growth large enough to replace the lost revenue. Some warn that relying heavily on consumption taxes could require By David Krechevsky davidk@hartfordbusiness.com B etsy McCaughey, a Republican candidate for governor in Connecticut, says she'd rather "slit my throat than raise a tax." That partly explains why she has revived a long-standing but controversial idea — eliminating the state income tax — as part of her campaign platform. The plan has drawn political atten- tion and sharp criticism from oppo- nents who say it rests on misapplied research and shaky assumptions. A former New York lieutenant governor and conservative media commentator, McCaughey has pledged to phase out Connecticut's personal income tax within five years, if elected. That won't be easy: The tax, first enacted in 1991, generates roughly half of the state's revenue — about $13 billion annually — making it the single largest funding source for state government. McCaughey (whose name is pronounced "McCoy") frames her plan as a way to boost economic growth, attract businesses and make Connecticut more competitive with lower-tax states. "We can make Connecticut the tax haven of the Northeast," she said when launching her campaign. Her proposal echoes pledges made by past GOP candidates for governor, including former Gov. John Rowland and, more recently, Bob Stefanowski. Rowland never eliminated the tax before resigning in July 2004, while Stefanowski lost to Gov. Ned Lamont twice. The idea, though, is gaining renewed traction nationally, thanks to a boost from the Trump administration and several states already pursuing poli- cies aimed at reducing or eventually eliminating income taxes. National trend In recent years, states including Mississippi, Oklahoma and South Carolina have adopted or proposed phased income tax reductions, often tied to economic "triggers" such as revenue growth or budget surpluses — mechanisms intended to allow gradual cuts while limiting the risk of budget deficits. McCaughey has pointed to those states as models, particularly Okla- homa, arguing that Connecticut could follow a similar path. Oklahoma in 2025 adopted a trigger-based approach that allows income tax cuts only when revenue growth meets certain benchmarks. The state enacted similar measures in 2012 and 2016, but later reversed BETSY MCCAUGHEY Republican candidate for governor Occupation: Founder & chair of Committee to Reduce Infec- tion Deaths; former lieutenant governor of New York Education: Bachelor's degree in history, Vassar College; master's in U.S. constitutional history, Columbia University; Ph.D. in U.S. constitutional history, Columbia University Age: 77 Continued on next page

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