At least one third of all Connecticut tax filers pay no state income tax at all - and Tom Marsh says that should end.
As the Independent Party candidate on the ballot for governor, Marsh says that "everybody who is receiving a paycheck'' should pay into the state coffers - even if it is only $100 per year - in order to battle the state's projected $3.4 billion budget deficit.
"Everybody needs to have a little skin in the game,'' said Marsh, who is serving in his third term as the first selectman of Chester in Middlesex County. "People need a reason to be engaged in the government.''
With various exemptions and credits, thousands of Connecticut residents currently pay nothing at all. Even though Connecticut is a wealthy state, nearly 40 percent of the filers earned $35,000 or less in 2007, according to public tax records. Under the state's progressive income tax that exempts those at low incomes, the filers below $35,000 paid a combined total of 1.3 percent of the income taxes. At the upper end, the top 20 percent of earners paid about 80 percent of the overall state income tax that was collected, and the top 1.3 percent paid 35 percent of the income tax.
Marsh's two opponents in the governor's race - Republican Tom Foley of Greenwich and Democrat Dannel Malloy of Stamford - both rejected his idea about the state income tax.
"We shouldn't increase any taxes in Connecticut as a means of solving the looming budget deficit,'' Foley said in an interview. "I'm surprised. Tom Marsh has been traveling around the state a lot. I'm shocked.''
Marsh should realize that Connecticut voters are not in the mood - "and don't have the ability to pay more tax in Connecticut,'' Foley said.
Roy Occhiogrosso, the chief strategist for Malloy, said the state needs to create more jobs, rather than collecting more taxes from those with the lowest incomes.
"You're talking about people who are not making a lot of money,'' Occhiogrosso said. "A couple hundred bucks might not sound like a lot of money to some people, but it is to them. ... No way.''
Marsh rejected the views of those who say it is bad tax policy to impose a tax on the poorest residents. He noted that the state legislature has raised the cigarette tax multiple times - to the current level of $3 per pack - even though many poor people are smokers and are forced to pay the tax. The poor also pay gasoline taxes, Social Security taxes, sales taxes and other taxes.
"It's a false argument to say you're taking advantage of those who can least afford it,'' said Marsh, who represents an affluent, riverfront town of about 4,000 residents.
Under the state tax law, married couples who file jointly with an adjusted gross income of $24,000 or less pay no state income tax. But with the property tax credit of $500 for automobiles or real estate, couples earning as high as $43,600 do not owe any state income tax.
While state legislators have offered various estimates through the years, a spokeswoman for the state Department of Revenue Services said the state does not officially calculate the number of filers who pay no state income tax.
Marsh, who turns 51 next week, started his campaign for governor as a Republican before dropping out to run as an independent. He collected the necessary 7,500 signatures to receive a spot on the ballot under the Independent Party.
With large deficits on the horizon, Marsh says that examining the tax structure is necessary as he blames the state legislature for the state's fiscal problems.
"I see the freight train that is coming down the tracks and the absolute dysfunction that the legislative and executive branches have shown in the last couple of sessions,'' Marsh said. "We've already maxed out our borrowing capability.''
Besides seeking changes in the income tax, Marsh said the state also needs to examine the numerous exemptions to the state's sales tax. The exemptions have been added at various times through the years - either by lobbying from various industries or legislators. Some legislators have called for a comprehensive review of the various tax credits that have been inserted into the tax code through the years.
Marsh is calling for an immediate end to the sales tax exemptions on car washes and tax preparation services, which are currently tax free.
"Everybody in or out,'' Marsh said, adding that the list of exemptions needs to be simplified. "This is an excellent opportunity to revisit what we've done.''
As a third-party candidate with less than $100,000 for his campaign, Marsh has been trying to spread the word about his race for governor. He is not broadcasting any television commercials because he lacks the millions of dollars that will be spent by his rivals - Foley and Malloy.
"We're not going to get into big media,'' Marsh said.