Connecticut Governor Ned Lamont is considering applying a sales tax to groceries and taxes on pharmaceutical drugs in order to address his state’s $1.5 billion budget shortfall. He also has officially introduced a new series of “sin tax” proposals, that include levies on sugary drinks, electronic cigarettes, plastic bags, and deposits on alcohol.
These proposals will make life more unaffordable for Connecticut residents and taxpayers who are already struggling, and leaving the state in droves. They are bad policies to pursue, especially for an already notoriously a high-tax state.
Lamont repeatedly promised during the campaign to not raise taxes on the “middle class”, though he also promised new taxes. Now these new tax possibilities show what Lamont’s attempts to have it both ways will mean for taxpayers.
Taxes on groceries and pharmaceuticals disproportionately harm middle and low-income families – this is not the right way to balance the budget and it unfair to the poorest Americans. According to a study led by Norbert Wilson of Auburn University, grocery taxes contribute to a higher rate of food insecurity, while costing families hundreds of dollars per year. It is no coincidence that the three state with the highest levels of food insecurity, according to Feeding America, – Mississippi, Arkansas, and Alabama – all have grocery taxes in place.
Pharmaceutical taxes have a similar effect. According to a World Health Organization’s policy brief on the topic, pharmaceutical taxes increase the price of medicine, are regressive, reduce utilization by the poor and elderly in particular. Taxes commonly make up 20-30% of the final price people pay for medicines, so having no pharmaceutical taxes not only reduces prices, but improves access.
The latest set of Lamont’s tax increase proposals, include a 10-cent tax on plastic bags, a 75 percent tax on e-cigarettes, a 25-cent deposit on wine and liquor bottles, and a nickel deposit on 50 milliliter bottles of alcohol. “Sin” taxes are bad policy – they disproportionately affect the poor and lead to job loss in their respective industries.
Governor Lamont’s proposals are so bad even progressives in the state are speaking out and urging the governor to ditch these unnecessary tax increases.
Not to mention, Lamont campaigned on the promise that he would not raise taxes on the middle class – which was the demise of his predecessor Dannel Malloy – so this also could hamper his ability to govern effectively, not to mention his reelection chances in 2023.