Connecticut's Economic Freefall: Sources, Consequences and Policies to Restore Prosperity

Robert Stefanowski Arthur B. Laffer, Ph.D. With Luke N. Daigneault November 2017

The 50 States: Road Quality vs. Tax Freedom Dayl

s 70% rr, N5 o;60% E !c 8 sose It $ oo* .= o !to € 30% o (!

Days l,leeded to Pay Total Tax 8il1, 2017

l Tax Freedom Day is a study done by Tax Foundation to determine how many days it takes for each state to pay off its federal, state and local tax burden. Source: https://files.taxfoundadon.org/20170418101758/Tax-Foundation-TFD-2017.pdf Laffer Associates | 12a12017

SUMMARY Part 'l: the Story of Conneclicut Connecticut-Whai's Wrono Now a Connecticut's gross state product (GSP)growlh ranks 46rh nationally since the Great Recession, and is lhe worst among the New England states. a Connecticut's personal income growth since the Great Recession is 49h in the nation. a Conneclicut's debt as a share of GSP is lhe 3'd worst in the nation (2015). o Connecticut's credit rating is tied for third lowest according to Standard & Poor's. o According to Pew Research, connecticut's pensions are the 4h worst funded in the nation (2015). a Connecticut has the 2nd worst net in-migration of adjusted gross income (AGl) for the latest tax year 2015 (see back cover). This one year's net loss tolaled $1.3 billion in reported adjusted gross income. o Major corporate HQs are fleeing connecticut: GE (2016), Aetna (2018), and now Alexion (2018). a Connecticut has the 2nd worst roads in the nation (201s)-(see front page exhibit)

What's Wrono Lonoer-Term a As of 2016 Connecticut has had the slowest employment groMh of all 50 states since 1992 when the state tirst adopted its income lax.

O Connecticut currently ranks srh best among all states for productivity (GsP per worker). However, since 1992, the first year after the state adopted its income tax, growth in Conneclicul's productivity level was relatively weak: 2l "t in the nalion a Connecticut's housing prices are falling relative to the nation, eroding residents' net worth a Over the 22 years after Connecticul adopted the state income tax, the stale lost a net 8.8% of its adjusled gross income lo other states (srh worst in the nation).

@!+Ij!isJre!s a ln 1991, Connecticut adopted a state income tax. ln the years 1992,2003,2009, 2011, and 2015, Connecticut's legislature raised (with the governor's approval) income tax rates and made the tax levy more progressive. The highest tax rate was increased from what rvas a flat 4.5% to a progressive tax with a top rate of 6.990/0

O ln 1992 Connecticut had 50 less full time equivalent (FTE) government employees per '10,000 population than the national average (9.7% less). ln 2015, Connecticut had 28 more FTE governmenl employees per 10,000 population than the national average (5.5% more). a Connecticul has the 2nd highesl paid FTE public welfare workers (2015)., a According lo Tax Foundalion, Connecticut has the highest totaltax burden in the nation (Tax Freedom Day in 2017 was May 21-Connecticut is #50). a Connecticut is the only state with both a gift and estate tax, which drives retirees from the state. An astounding net amount of $6 billion in adjusted gross income (AGl) migrated to Flodda from 2005 to 2015 (see appendix).

I Workers compensation costs in Connecticut are the srh highest in the nation.

2 The ofiicial Census Burea! name for this type of government employee is "Public Welfare Worker,'and they lnclude: the adminislration of various public assislance programs for the needy, veleran seNices, operalion of nulsing homes, indigent care institutions, and programs lhat provide paymenls for medicalcare, handicap transportation, and other services for the needy.

2 Laffer Associates 1112812017

a Connecticut's property taxes are 3'd highest for collections per person and 6ir highest as a share of GSP (20'15). Pari 2: Fixing Connecticut What to do a Phase out lhe income tax over eight years. o Decrease or entirely eliminate ihe corporate income tax with revenue triggers.

O Eliminate the gift and estale tax as part of the first budget in office. o Embrace zero-based budgeting. a Empower the people through a trax payer bill of rights. a Adjust spending lo revenue and nol the other way around.

To oet Connecticut to orow aoain. ws muat olav the film backwards a For the 15years, between 1976and'1991 (before the stale income tax existed), Conneclicut's groMh in per capita gross state product was #1 in the nation. We need to return to the prosperous past. o The table below shows what happened to the 11 states that added an income tax after 1960, including Connecticut. Each and every state declined relative lo the rest of the U.S. in every major metric!

ornca or rno rr r'Erles r nat Aoopled an tn@me Tax posa-1960 (including CT and CT separably) verEls the Percentage of the 39 Romalning Statca Itlaximum Tax rate Population GSP Tax ReYenue 5"1ff lnitial Cunent ,oro % Ciange Years 2016 Change Years 2015 "/" Change Bebre BF,ftrE 11 State 36% 410/o Equal Wt. 3.2% 5.90/o 45.1% 29.0v" 49.2y6 m.oo/. 42.50/o 31.0% Decline Ar€rage Decline Decline

22% 50/" Connecticut 1.50h 7.Oo/. LAok 1.4% 2.40/" 1.9% 2.40/. 2.2% Decline Decline Decline

Source: U.S. Census Bureau, Bureau of Economic Analysis, Tax Foundation

o The reason why Connecticut's declines are less than the 11-state average is simply because the olher 10 stiates introduced their income taxes longer ago than Connecticut and, therefore, had more time to collapse than Connecticut has had. Laffer Associates 11t28120't7

O Taxes make a difference in other states as well. i*ji*:*!.-;:iii:J::*;i::j t$in*rf m,ril" SYr{hcl ffiiittrc: r:;2mryff15',.' 'r:''flftlrefffi}::, Budget State and Local Tax State & Local &rrden as a Share Personal Surplus/Deficit Population Eimployment Tax &venue State lncome as a%ofTotal of Personal lncome ex-severance lTar Foundaiionl &venue South Dakota 7.1o/o 10.SYo 4.SYo 50.901 55.2o/o 5.21o lA/yoninq 7.1o/o 12.Oo 5.2% 43.10/, 55.6% 21.0o/o Tennessee 7.4Yo 9.2o/o 3.7o/o 43.8o/. 34.8Yo 4.1o/o Louisiana 7.60/o 8.8o/o 4.804 42.2o/. 30.4o/o Q.3To Texas 7.60/0 19.3o/o 17.6Yo 62.3o/o 63.4o/o 5.40h

Average'for 5 Lowest Tax 7.40/o 12.0o/o 7.2Yo 48.5% 47.9o/o 7.2o/" &rrdens lContiouous lJ.S-l

fll-State Avq.* 9.5o/. 7.9o/o 4.2Yo 41.OYo 41.9Yo 3.0olo

Average'for 5 Highest Tax 11.9o/o 2.604 1.2Yo u.7% 41.7Yo -3.21o Burdens lConliorrorrs lJ-S-l

llinois 11.Qo/o 1.2o/o -1.2Yo 31.5% 51.6% -5.7o/. \Msconsin 11.0o/o 3.604 2.60/0 35.67o 25.7o/o 2.801 l.,lew Jersev 12.2o/o 3.3% 1.5o/o 32.3o/o 36.1o/o -9.101 Gonnecticut 12.601 1.7o/. 2,60/' 33.3% 40.8Yt -3.40/, Itlew York 12.7o/o 3.4Yo 0.5o/. 40.8% *.30/ -0.6%

Source: U.S. Census Bureau, Bureau of Economic Analysis, Tax Foundation, Pew Charitable Trusts3

The above table vividly illustrates the job and income-killing aspects of excessive taxation, and the highest taxed don't even get more tax revenue. Even among the highest taxed states, Connecticut is below the average on most growth metrics including, population, personal income, gross state product (by a longshot!), and tax revenue.4 More telling yet, is the growth in tax revenue that excludes severance taxes, which are subject to the exogenous volatility of energy prices (mainly that of oil and gas).

Gonnecticut Must Caoitalize on its Remaininq Strenoths

O Connecticut has great schools. Educational outcomes, year in year out, are in the top 5 in the nation.

O Connecticut has an extremely well-educated population to supercharge growth. 4th in nation for bachelo/s degrees and 3rd in nation for advanced degrees.

Connecticut needs to regain a competitive economic advantage over the metro areas of NYC and Boston (the elimination of the corporate income tax can help do this)

3 "Fiscal 50: State Trends and Analysis," Pew Charitable Trusts, Novembet 7 ' 2017 . http://www.pewtrusts.org/en/multimedia/data-visualizationd20l4/fiscal-50#ind9 o This growitr occurred ii spite of the immense fall in the price of oil in 2014. Four out of the five low-tax states are heavy oil producers

4 Laffer Associales 11t28t2017

SUPPORTING EVIDENCE FOR SUTTARY CUIMS Part 1: tho Story of Connectlcut

Conn..ddrt-Whd3 Wrond llow

a Connacdcui'3 GSP growth ls $ ftom thc bottom of lll rirbr slnco iha frnanclal crl3b (Grrst Roca33lon).5

a Conngctlcut'3 pe]3onal lncome grc rtr is lfta 2d wolrrt ln tho nldon 3inco th€ Grrat Roco$lon (frnanclal crl.i3).

Connocilcut b 5S to last for cconomic g.owth, From 2(x)g b 201 6, Conneclicuts mminal GSP grew at a I .8% annual average (ranks 46h) ---€ tull 2.3% below (onethird of) the sGstate equal weighted a\€rage at 4.1%.

Connoc'ticut'3 emploFffit growtr b ln th. botiom 10. Employment gr€w at a 0.4% (ranks 406) annual averago from 2009 to 2016 comp€€d to lhe 5o-state avetqe ot 1-?h.

a Connocdcut'3 labor forca pardcipstion rate b lhlinking. While lhe mo6t commonly reported unemployment rate has dsdined, lhs distubing trend is ihe sl,ab's participation late-$e porcsntago of the populalion that is either rvorking or activsly s€€king ryork-has dedined fiom 68.8% to 65.9%. ilor€ lhan one-third of lhe stais's populalion n'ho could yuork ar€ now on lhe sidslines, placing an ever-incrgasing burden on f6rr€r numbers of wage- eamets.

Source: Bur€au of Labor Statistics, Burcau ot Economic Analysis

5 From 200&2015, ConrFdbi E9 3d frqn th€ bot!o.n, M Loubhm and tlew Merho iust FcEnUy surpo$€d t rih *o. p€rbrnrance in 2016 to make ConnecdcNrt 56 *o.st fro.n 2(x}}20t6.

5 Laffer Associates 11t28t2017

O Gonnecticut's debt as a share of GSP is the 3'd highest in the nation (2015).

State Debt at the end of FY2015 as a % of GSP from Lowest (#1) to Highest (#50)

NE 1 1.60/o AZ 14 4.9% lN 26 6.71o lL 39 8.31o TN 2 1.9Yo KS 15 5.0o/o sD 27 7.Oo/o NE 40 8.7o/o \ 3 2.10/o w 16 5.0% MI 28 7.OYo t{Y 41 9.5Yo ^/ l{\/ 4 2.4o/o M.l 17 5.'lo/o [,lS 29 7.1o/o 42 9.70A GA 5 2.6Yo oH 18 5.5% t/t 30 7.1% AK 43 10.7Yo TX 6 3.0olo @ 19 5.5Yo Kf 31 7.2o/o F[ 44 10.9o/o tA 7 3.5% lD 20 5.6Yo DE 32 7.2o/o VT 45 11.0o/o f{C 8 3.5olo vA 21 5.90/o wA 33 7.20/o NH 46 11.'lo/o ND 9 3.71o oR 22 6.0% NM U 7.20/o NJ 47 11.9Yo

Fl- 10 3.8o/o CA 23 6.1Yo [D 35 7.3Yo AR 11 4.2Yo tls l,l/A 6.4% wt 36 7.30/o AL 12 4.5o/o Itll 24 6.60lo 1A 37 7.4o/o OK 13 4.7Yo PA 25 6.6% SC 38 7.5Yo o Connecticut's credit rating is tied for third lowest according to Standard & Poor's.1o

o The state is tied with Kentucky and Pennsylvania and better than only lllinois and New Jersey.11

10 'Rainy Day Funds and State Credit Ratings, "Pew Charitable Trusts, May 2017. http://www.pewtrusts.org/-/media/assets/201710S/statesfiscalhealth_creditratingsreport.pdf 11 "California's Current Credit Ratings," Calilomia State Treasurer, 201 7. http://www.treasurer.ca.oov/ratinos/cunent.asp o Laffer Associates 11/24t2017

a Connecticut's pensions ar€ the 4rh wolst tunded in the nation (2015).

o Connecticut's pension funded ratio has been in the bottom five for over ten years, o According to Pew (uses liability that states self-report) Connecticut had the 41h worst funding ratio in 2003 at 66.1olo. ln 2015, the state still had the 4th worst funding ratio onty now at 49.4o/o.13,1a o lf we use ihe Stanford University's Hoover lnstitute data for 2015, which uses lhe actual, market value from a sample of pension funds, lhe funding ratio was even worse-34.S%.15,r6

SD 10,352,405 10,776,534 1 669,955,702 495,833,306 26 89,999,506 68,50a,670 943!{ 10,1a6.720 7/4r6,066 73..t!t 27 NY 193,065,921 189J12,416 98.1% 3 36,736,096 25.937,531 70.6% 2A NC 93.392319 89,r65,r93 95.5* ND 6,45,72A 4376,59 70/x E TN 45334.192 43,260,91a 67,480,0a0 46,027,685 6A 2% 30 OR 70.605,1@ aa.s23.800 9t.9!a 6 5.622,$O 3r13,8At 67.6t( 31 to 15,669,157 14,345.9:r6 20.!07,716 1r,03]l.857 67.5% 32 NE r9,03r,0r0 11s1,127 913!a aE50t3r7 325€o50e 67.0!6 33 DE 10,341,683 9233.919 89.3% I NH 11.471,453 7,509.926 65 5% 34 85.8r0249 74,705,075 .14 10 t.s 2531at71 16335521 64.9r 35 171,619.936 148,505,168 86.5% 11 IN 46,839.007 30,268,263 64.6% 36 UT 31.15033a 2t.160tt0 65.7* 12 M E5338874 5aJ38:06 03.7X 34,091,215 4,004424 85.1% 13 50259,386 31,816,943 63.3% 38 l/E r5,403.E90 12,f11,111 E25!t 1a R 05,rla2ao rfi,5€9,951 632X 39 29,427,439 24.540,957 42.4% 15 HI 23,236,495 14,505,465 62.1% tD 6a.8t2,8€3 52,780,81a .aa 10 u,srlno 52,a5699/t 624\ at 102,015,080 82,498,305 80.9% 17 rvs 40,863.600 25,246,219 61.8% 42 75522t.o @25f ,142 7St* t8 co 70,'823?O ,c58,4e! 60.ata OK 36,539,396 28.930,879 792% 19 sc 50558,085 29,305,690 17333,67a r3,566,069 76'9!a m RI 11,t05,i91 6,$4,457 57.1t oH 191,957,918 r46.641,904 21 139,139,830 77.640,521 55.8% 46 TX 28tn216 15319a,670 f55X I 46,195,357 34,714400 751'/, 23 ll 199O89,640 ao,o172u 402% 48 8AB85,aa8 66/.063!1 7a.6!( 2a KY s0,9r3362 21,fil210 1f .ax 13,561,567 10,r05,644 25 NJ 217.055,414 81,354,8,18 50 trltotat ttl 2,7!t"lrotrt 71tX

Source: Pew Research

a Connecticut has tho 2d worst net in-migration of tax returns for the lat$t tax wat 2015. (chart on back page)lr

o The stale of Conneclicul is losing people and taxable income in every direction. lt's as if the state has a huge gaping hole in its pocket. Since the income tax was passed, the state has lost nearly 9% (share of AGI in 2015) of ib adjusted gross income to other states. Almost 4% of that amount was lost belween 2010 and 2015 o There were 671 fewer ('1.8%) non-exempt corporate income tax returns filed in 2014 than there were in 2009.20

r3 http://www.pewtrusts.org/er/research-and-analysis/issue-bdely2ot 7/O,Vthe-state-pension-funding{aF,-201S r' http://www peMrusts.org/er/multimedia/data-visualizations/2O1snhe-fiscal+ealth-of-state-pensio;-itansflaltstatecompadsons 15 CT did have very good relurns in the lasl fiscal year (14.3%). Treasurer Denise Nappier is emphasizing lo,vering th; expecled rettims of their pension portfolios. She says 8% retums are unrealistic and that assumptions need to be lower. lt s also been under her watch that the pension fund has perfomed so poorly.

15 Joshua D. Rauh, "Hidden Debl, Hidden Deficits: 2017 Edition,'Hoover lnstitution, May 15, 2017. http://www.hoover.org/researchihidden- debt-hidden-deficits-201 7-edition 17 All $ figures are in thousands. 'Change in Percent Funded Ratio' is the difference in percentage points from lhe previous year. 13 lntemal Revenue Service, Population Migration Data a Annual Reporb, Connecticut Oepartment of Revenue. hltp://www.ct.gov/drs/c$D,!iew.asp?a='trt42&q=266020&dlspNavctFl49916l

7 Laffer Associates 1112812017

O CT has the 2nd worst roads (2015) but the highest tax burden in the nation according to the Tax Foundation's Tax Freedom DaY. State Road Quality Vs. Tax Freedom Day,2O'|,72e

Alabama 99 75.9To Alaska 100 45.6o/o Oklahoma 101 29.6o/0 Georgia 107 72-5o/o Maine 107 44.60/a West Virginia 102 29.6o/o 29'Oo/o Nebraska 104 62.60/o Vermont 108 43.60/o Pennsylvania 113 North 62.3% 't06 43.0o/o Washington 117 24'7% lndiana 107 Carolina Wyoming 113 61.5% Michigan 113 42.4o/o New Jersey 133 22'8o/o 2'l.7To Tennessee 97 61.4Yo lllinois 120 40.7o/o Califomia '121 North 116 60.2o/o Texas 107 39.5% Hawaii 109 16.40/o Dakota Florida 110 57.6Yo New Mexico 99 39.5% Massachusetb 125 'l2.7Yo South 55.6% 98 37.6Yo Kansas 110 Dakota 10.9% Nevada 113 55.07o Maryland 't 19 37.3o/o Rhode lsland 118 Oregon 114 54.7Yo Louisiana 100 37.2o/o New 112 35.87o Montana 107 54.5o/o Hampshire Minnesota 120 52.60/o Colorado 114 35.0% Utah 111 52.0o/o Wisconsin 1't7 32.3o/o South 101 32.0o/o Kentucky 101 51 .9To Carolina ldaho 105 51.5% Missouri 103 31.9% Delaware 108 49.7To New York 131 31.6% Ohio 110 49.'l% Mississippi 95 30.3o/o Arizona 105 48.6Yo Arkansas 't 03 30.1% lowa 48.1o/o 't 13

Source: Tax Foundation, Reason Foundation

2s Tax Freedom Day is a study done by Tax Foundation to delermine how many days it takes for each state to pay off its federal, state, and local tax burden. source: https://files.taxfoundation.orgt20170418101758/Tax-Foundation-TFD-2017.pdf

8 Laffer Assooiates 11128t2017

E|E!s-Wre!s-!e!s-@ a Connectlcut has had the slowest employmont growth, s{rb out of 50 3tates, sinco 1992 (see page 23).s

o Between 1992 and 2016, growth in por capita gro$ state product was #19 in the nation.31

o Houslng prlca3 are falling relative to the nation.

o High tax burdens make it much more difficult to for people to qualiry for mortgages. o Until 2001, Connecticut home prices outsaced or matched the U.S. as a whole. However, we now see that with the two most recent in@me tax increases, Conneclicut experienced little to no house price growth, while residential prices in lhe whole U.S. have been growing at much healthier pace.

House Prico lndex, Connocticut vs. US3 (seasonally adjusted, quaderiy, 01 1975 through Q2 2017, semilog scale, indexed to 100 in 1980) 512 512

1992-lndiv*lual lnco.ne Tax fully phas€d in.

256 256 2011-lndividual lncome Tar raised ftom 6.5% to 6.7%

128 124 Conn€cticut 20ltlndividual lncome Tax ---- U.S. - raised fro.n - 6.70lo to 6.99%

64

32 goqooaoqoQoogoooooaooo(' ? rr F (t |o (?, F t-F r,-o co oart o €F Io g, g, (') oF- oro o- o oro or- o6 i Fo F|b iti o o o o) cD o) or o o o) o cD ar, o o (\t(\t(\c!6t(\tNo o o o- o o o

Source: FedeEl HorJsing Finance Agency

s S€o App€ndix 31 See Appondix B 'House Prica lndex, Purchase Only lndexes," Federal llousing Finance Ag€ncy, 2017. httssr/www.ftfa.gov/DataTools/Oo*nloads,/Pag€./Flouse-Price.lndex-Oatasets.asp)dqpo a Laffer Associates 1112812017

a ln '1992, 2003, 2009, 2011, and 2015, Connecticut raised its income tax rate.

conneclicut GsP as a shar€ of Total US GSP vs' Connecticut'3 Tax Burdena,'3 (annual) 12.0o/. 1991-1.5olo Personal lncome Tax passed for'91 tax year 11.50/o 201s-Top PIT 2.20/o Total Tax Burden as a Raised to Share of Personal 6.se"/"4 lncome (L) 't1.00/o 1 2.Ovo

GSP as a share ot US GSP (R) 1.8L 10.50/o -CT

10.00/o \ t, t, t lt I 1.60/0 ,l 20u-25% tax s{rharg6 im+s\d tr/ I V / on cr,norale incolne tax for t year 9.5% ! 'tggfCorporatettfcomtgglcorooratetdcom e // 1/lr200tsuccessiohlllr2O0tsuccessioh txThx repealed; Gift 't.40/o t Ta/Extended to / and Estate Tax passed bn transfeGtransfe.s of n96profit corporations lggT-succession Tax realor personal propert\valued over $2 t million t !firelated business (inheritance tax) 9.00/o t / income extended to nonresident 1.20/o I t' estates--.-,-- 200G'20% tax surcharge imposed on I | .nrPorate income tax for the Year r has been extended every year since) 8.5% 1.Oo/o ppFppsE$3333b3885$E33E56EEES8388EEg?ilg:9o o o o o b, b b, b b, 6 6 6 o 6 6 di o 6 6 6 6j oF::; o o, O oi oi F-o o NNN9 o o NNNN c{N(\la{I I I I Qc..l c\lI N C1I c!9 - -;;;

source: BEA. Laffer Associates

Connecticut experienced exceptional economic growth relative to the United States before the income lax, and its groMh has been dismal ever since.

1'?State GDP in Currenl Oollars, Bureau of Economic Analysis o" JuOiinlotrman, 'State Tax Changes 1990-2008,' Connecticut Office of Legislative Research, July 14, 2008. https://www.cga.ct.govi2008/lpv2008-R-0408 httn

10 Lafier Associabs 11t2W2017

ConnocliDut St tt and Local Tar Rryonrc, 2015 % ofTotal Tax UnhEd 3tab3 Equd- Dollarr R.wnua Weightad Av€r.gE % of Total Tax R9Y9nur"

T&l Ta( Revonu€ $26,607,123 'Eqtlal{€lghbd p€rEdtagE do mt a(ld io rms6. Prop€rty 94a.2Le. 3E i96 3IJE6

Sal€6 and gross l€ceiptB l0-56rLEE5 2!l^06 35-5% Gon€ral sal€s $4.082.787 15.3% 23.5% Selective sales .472.O9A 9.3% 12.1.h

Motortuel $481,825 1.8% 3.80 Alcohofic b€\,€rqe $61,612 0.2/9/, 0.50/o

Tobacco prcducb f,31t7,944 13% 1.4% Puuic utilitiG v8ts.'o'4 1.1% 1.6% Other sd€ciiv€ sales $1.287,64ii 4.8% 5.4% lndividual income $EJ8a0Z1 gts6 m,99^ CoDorate incqne $e.6Es 2.6% 3t96 Mobr whicle lic€nse l219.gE (t8% L9t6 D6ath and Gn Ta)(Es l1dtzL2 0^6% 0.% Other tare6 lszElES 2.% 7-ff6

Source: US. Census BuEau

11 o t- N o 1cl o 6o o=aa= oan rnd Tar hnndrlid T.! co o a. .DEi=O ot 2J312017 2017 3a o aDE at, Sumo{ TdFr6# +5 hy (Til Top Top Rwdy, ga Overd hMnd tupotlt" ad tu'''dt1 tunk sbt6 . tunk sbt6 l-$b! funk $r. Sbt6 sbla hcm _td &nk remnro Mfud +!i Eby3lo tuy dt Rab tula Td tr;ttlt ild Burd€n3 tt tulTd Ba Jt AK ib AL Y6 li4s 95 UI AK 0.0% 1 so 0.0% m 356.s ib AZ Y6 IN 97 s'g N FL 0.0% 1 wY 0.0% vA 1s7.5 AR fb AR Y6 SD 98 iG w 0.0% 1 ft/ 0.5v" o( i57.84 2.6v. Mr t59 30 AZ fb FL Y6 99 N) sD 0.0% I TX ia 361.15 CA t$ GA YB l{rl s lN TX 0.0% 1 tc 3.0?. rc m Itb DY6 AK 100 =4 tu wA 0.0% 1 G 36% AL t61.17 FL t& NYs 1m wY 0.0% 1 AL 4.2% tr 361.89 *B GA t\b AY6 KY 101 AZ M.{ 0.0% 1 iD 13% t\D 363.14 t) tb KS Yes 101 x I lN 0.0% 1 o 4.6v. D i63. 6'd 10 i63.67 10 tf i\b KY Y€3 OK r01 D 10 m 2.9% 10 AZ 4.5% GA Px 11 KS l.lo LA Y6s 102 11 11 u 3.6% 11 lirs 5.0ol. 11 t.lc i63.82 E s.o% 11 96,1.31 12 M MY6 iro 103 12 c SD 12 L 3.8% 12 sc i,lA s.ovo 11 ur s41.79 M M 6Y6 AR 103 12 13 AL 4.0% 13 uT a 11 11 t$ l€ Y6 tE 104 14 14 AZ 4.5% 11 u 52V. @ 165.37 [o o ti,is Y6 1g 11 @ KS 4.6% 15 FL 55% 15 E 3S.30 15 lb tW 't6 sc 368.37 16 tltT t$ t€ Y6 D 105 16 o( 16 @ 4.6% 16 GA 60% 17 E t$ t0 Y6 AZ 105 5' GA 17 llil 1 17 o< 5.0% t6 N t68.42 18 t\b OK Y6 rc 106 18 f+t 18 [6 5.O% 18 rc 6.2% 18 AK 369.{ io 19 19 t*t b sC Y6 GA 107 19 fr 19 ffi 5.0% 18 fil 6.m m $9.77 o= 20 N ib SD Y€ N 107 19 M 20 N 5.0% 18 N 6.3% 20 cA t70.23 5 21 ib IN Y6 MT 107 19 21 or( 5.0% 18 H 6.4% 21 olr 370.69 o 22 371.02 22 Otr NC ilY6 i/E 107 19 3!: i6 22 iiA 5.1% AR 6.5% M t$ Uf Y6 TX 107 i9 o AR 23 A 5.4% n 6.5% 22 wv i71.m o( 32.99 21 sc fb VA Y6 CE 108 24 3 rc 24 r€ 5.5% 21 wv 6.5% 22 KS 108 24 vA s.8% wA 6.6% rN s7323 SD t$ WV Y6 o 173 56 26 TX ts WY6 H 1m 26 o KS 26 R 6.0v. 26 Mr 6.8% 26 rlr I'b Y6 FL 110 o sc GA 6.0% KS 7 0v. 27 u 373.S 27 W WY o KS 110 28 $/v 6.5% 28 Rl 7.0% 27 AR t7,t.06 ts AKM M Glb cl 110 29 M 6.7% 29 D 7A% 2S AZ S7,1.25 29 4 30 @rt UT 111 30 AK 30 t€ 6.aah 30 vA 7.6% n A J74.27 l$ 7.8Vo 31 31 t$ Eib Ni 112 ct 31 btT 6.9% 31 L w 174.40 IE AR 6.9% t€ 7.e% I szs.sz ]N tb Htb 113 DE Ltb 113 32 o tr 33 PA 7.O% w 7.*/o 33 M't 175.72 H [E tb M 113 32 bo u I 7.0% g iA 8.O% v t\D 576.27 v J 376.m 35 iDb 113 t{, 35 lio 7.0% 35 M 8.0% 3,1 E o 36 L PA 113 32 R 36 sc 7.of/o 36 KY 4.2% 36 |t t77.15 iab 37 37 l(Y N l.b m 111 37 DE 37 o 7.4% 37 t+t 42% a- 177.n 0l tb co 111 37 B s oH 7.s% s i/O 8.3% 38 sD t81.18 s tulf, x 3a1.24 39 i,I) MTb M) 116 39 .ll MT 39 w 7.7% vT 8.5% 39 6 ,() 11f 40 ,t0 tE 7.v/. ,t0 cA 8.8% 4 L 3al 29 liC l*lb 41 i/N Y6 N l.b 117 10 o OR 41 K A.Z% 41 i/E 8.9% 11 wY 382.0i o 3a2.83 42 E Y6 t{,1 fb R 118 12 E 42 H 8.3% 42 f s.oz. 42 il CL 43 NJ Y6 wfb io 119 13 H 43 lio 9.0% 43 NJ 9.0% 42 wA s44.15 o fb n 1m 11 L 4 vr 9.0% 43 AK 9.,{% 4 Rr $85.64 4 t$t oH 3 OR L 1m 4 45 i/N 9.9% ,ts iil 9.8% 45 NJ 185. 45 ORM PA mfb CA 121 16 o 46 ru 10.0% ft A 9.9% s ilc $89.60 6 o, 17 $92.61 47 R Fr l$ 125 17 CA 47 E 10.2% 47 oR 11.31o tt/ ,t8 s92.96 ,t8 VT l.b w 131 ,18 NJ ,t8 oR 10.5% 48 DE 11.7% vT 397.11 WAM 49 49 w 12.7% ,t9 m 17.O% 49 Ht 49 d tf/ 50 N @ oN {

Source: American Legislative Exchange Council (ALEC), Tax Foundation, Laffer Associates Laffer Associales 't1t282017

a Connecticut i3 lhs only 3tate with a state gift and ostato tax.

o ln 1976, only one state did not have a death tax.

gtat* wlth Death Texee ar of Jrnu.ry I , I 976

!rc'.0.r'u Qr*m+'t*t !ar*mcrrr Today, 37 slates do not have a death tax. State! wlth Gift .nd lteath Taxos as of January l, 2017

Connecticut

!rr'rl.oCnn !r*rmorcgru '-,,*^....*ffiH Conneciicut today is lhe only state with both a death and gifi tax. Shall we change the state bird from the American Robin to the Vutture?

13 Laffsr Assodatss fnnm17 o workor'c conp.nssdon cort .rt tro 5s hlgha.t ln th. ntton: a2.71 Fr ll(Xl of p€ytoll (ALEG-l-aftr RanklnF 2017).

a prcprrty tar ntcr ere hlgh

conncc'tlcri E t!c'!v. PtoFty Ttx Rfr., 2017 (166 of 169 munidpaliliosf 6% 6%

5% @ 5% [td"'hry,42%l Y 4% 4% 3.896 a a a 3% 3% a a 'b' o oo o .o.. a a '. i'^ 't.i. 'aoo' to a 2% 2% aa ..4 lf. .".^.;i ... oO a tl ^;.^1t -. a t a .t . . 1% aa 1o a 1% a Efiss-tiw Tar Rate, 2.1% 'Awrage

0% 0% Sourca: Connsciicut Slete Ofic6 ol Polict and lilanagsmsnt

{ Mill rat€s fui tirE munttpah{gs l9rB unavalht o,

14 Laffer Associales 1112a12017

a Connecticut has the 5s highesl paid state and local governmeni workeni per 1O,0OO in state population.

o CT has substantially more public employees than the U.S. average, and they make a lot of money. o Connecticut currently pays public employees comparatively high salaries. Salaries were the third highest in 2005 and srh highest in 20'15. However, since the income tax fully wenl into effect in 1992, the state has had one of the lowest overall groMhs in public employee wages (ranks 48rh counting DC). They have, however, been employing full time equivalent employees per '10,000 of the population at a faster rate than most of the US (ranks 3'd). Prior to the income tax, Connecticut had some of the fastest growing wages for public employees.

Toial FTEESponding on Salarlos per FTEPS per 10,000 State Populatlon Averag€ Salari€s 10,000 State Population St.l€ 2015 Rank 2015

vf/ 864 1 CA $72,934 AK $46,818,599 1 AK 731 2 NJ $69,662 $45,324,387 2 KS 671 3 f,tY $68,824 f,lY $40,902,583 3 VT U7 4 $65,053 NJ $37,238,095 4 MS 638 5 $s,781 $34,68s,435 |{o 627 6 AK $64,082 6 $33,658,795 6 l€ 625 7 RI $63,838 7 CA 933,200,796 7 NM 602 $62,461 8 ND $3i.634,538 8 l.JY 594 I\,D $61,898 I l\D $31.328.272 I A 584 $61,264 10 $31,177,375 10 AL 582 11 L $60,13s 11 $31,120.166 11 AR 571 12 OR $57,611 12 $31,101,346 12 MT 563 13 [f'l s57,294 13 if $30,748,012 13 v\v 557 14 PA $56,240 KS $30.534,980 14 oK 557 15 M $56,0s6 I\,N $29,783,702 LA 555 16 HI $55,668 L $29,409,529 16 K/ 550 17 us $55,276 HI $29.328.722 17 sD ,44 18 @ $55,169 1 RI $29,060,537 18 l.lc 539 19 DE $54,690 18 D€ $28,636,419 19 I s35 $53.288 t9 @ $28,622,373 20 NH 535 21 $s2,931 20 NM $28.499,s39 21 sc 535 $52,1149 21 t6 s2a.u2.115 NJ 535 $s2,030 22 OR s27.517.438 22 VA 533 oH ss1,331 23 $27.2U.718 TX 532 AZ $51,139 NH $27 .117.73A 24 tlE 529 26 $51,077 $26.277.U6 Ht 527 27 l']ll $50,648 MT $26,028,626 26 DE 524 28 ND $50,477 $26,014,231 27 i.40 521 29 UT $49,256 rc $25,9s2,700 2A MN 520 30 NE s49,178 TX $25,879,074 29 @ 519 31 TX $48,678 OH $25,836.079 30 us 507 FL $48,543 31 t\.,ts $25,555,794 31 l\,D 506 l'lc $48,171 PA $24.957,750 oH 503 NM $47,3s3 33 lit $24,682,845 t/A 498 $46,213 u $24,435,316 34 w 496 t\,€ $45,711 i/E $24,187.313 GA 496 KS $45,511 36 sc $24,1,14,368 TN 492 37 N $45.154 37 KY $23.7n.Ar 37 rL 489 D $45,149 38 SD $23,688,128 38

lD 486 $45.120 UT $23,464,11 1 lN 486 40 $44,733 OK $23.433,037 40 wA 479 41 $44,000 $23,408,530 41 oR 474 42 GA $43,953 AR $23,273,378 42 UT 476 43 IN $43,616 $22,967,977 43 Rl 455 44 SD $43,575 l\,1) $22,538,886 44 cA 455 45 t\0 $43,229 ID $21.U0.227 45 PA 444 46 KY $43,158 IN $21,925.s53 46 Mt , 47 OK $42.073 47 GA $21,818,467 47 FL 433 48 $42,02A 48 TN $21,451,256 4A AZ 419 49 AR $40,751 49 AZ $21,418,109 49 tw 375 50 l\,,ts $40,027 50 FL s21.013.747 50 Source: u-S. Census Bureau Laffer Associates f nu20't7

ln 1992, Connec'ticul had 51, l6s3 FTE goysrnment emplotlees per 10,000 poPulation ihan the national avorago. ln 20'15, Conneclicut had 2E moi€ FTE govemment employg$ per 10,000 population than the national average.

Connec{icut gtate and Local FTEE'3 per 10,000 Population vs US Average (197$201s,annual, bars indicate year of increases in the PIT) 600 600

580 580

560 560

540 540

,r:-""""d 520 520 \ )

500 500

ir80 480

460 460

440 44

420 420

400 400 o F- I o o

Source: Ceosus Bureau

15 Laffer Associates 1'1282017

Part 2: Fixing Connecticut @ O Phase out the income tax over eight tears.

o Massachusetts has successfully lowered their income tax over the last 15 years to 5.1 % in a fiscally responsible way through revenue triggers.5l Over the last 10 years, Massachusetts' groMh has performed above the US average in employment, personal income, gross state product, and lax revenue if you can believe it.

1 &Year Growth As of 11112017 2006-2016 200t 2015 Top Marginal State & Gross Personal Personal Local State Population Employment State lncome Tax lncome Tax Product Rate Revenue

50-State Ava. 5.60% 7.90/ 4.2yo 41.0% 32.6./. 43.Oo/ Itasgach usetts 5.100/" 6.3% 6.50n 13.30/" 40.9./" 19.70/.

Under Governor Fife Symington in Arizona, the income lax was cut from 8.7% to 5.6% with a similar revenue target system from 1992 to 1996. The Cato lnstitule conducted a study of the top 10 tax increasing stiales vecus the top 10 tiax decreasing states from 1990 to '1995. The tax raisers averaged 0.0% employment groMh, while the tax cutters averaged 10.8% employment groMh. Arizona, in parlicular experienced 18% groMh in employment over the five year period.52

sr "Massachuselts Part B lncome Tax Rate Set Lo'rt€r to 5.1% Effective January 2016,' Press Office of the Govemor of MA, December 15, 2015. http://t't/ww.mass.gov/govemor/press-ofrce/press-rel€seyfy2016/mass+art-b-income.tax-rate-set-lo-lo',!€r{o-t10.html s'z Stephen lroore, The States l\,love to the Supply Side," Cato lnstitute, November 5, 1906. https:/,!ww.cato.org/publicalions/commentary/states{ove€upply-side

't7 Laffer Associates 1112812017

O Decrease or entirely eliminate the corporate income tax rate with revenue triggers. (see table on next page) o This has been done successfully in North Carolina, which has cut its rate successfully down from 6.9% in 2013 to 3%. The state legislature did this by establishing a rule where they would only cut the rate if the predetermined revenue targets were met.55

10 Highest vs. 10 Lowest State and Local Corporate Income Taxes56 57

South Dakota 0.00% 10.5o/o 4.5o/o 50.9% 48.0% 55/% Wyoninq 0.00% 12.0o/o 5.2% 43.1% 15.9o/o 41 .6Yo Nevada 0.49o/o 16.5% 9.1To 27.4o/o 14.9% 31 .0o/o Texas 2.560/o 19.3Yo 17.6% 62.3To 48.60/0 63.7Yo Mrth Carolina 3.00% 13.8o/o 9.3% 40.1o/o 33.9olo 39.3% Ohio 3.640/" 1.2Yo -3.4Yo 32.9% 30.3% 22.9% Alabane 4.23% 5.1To -2.0% 31 .60/" 24.6% 30.9o/o

Mrth Dakota 4.31% 16.7% 15.2To 95.8% 97.2% 227.60/0 Colorado 4.63To 17.4% 11.40/ 52.20 39.6% 59.8% Ar2ona 4.90o/o 15.0% 7.QYo 33.3% 21 .9To 31 .0o/o

Weighted ftual 2.77o/o 12.74o/o 7.39o 46.970 37.480/ 60.32o/. Average

ftualWe[hted 11.32o/o 5.52o/o 3.12o/o 38.21Yo 29.41Yo 38.7s% Average

It/aine 8.93% 0.6% -0.8% 30.0olo 22.7% 26.5%

Connecticut 9.00% 1.7o/o 2.6To 33.3% 18.9% 40.8To New Jersev 9.00% 3.3Yo 1.5Yo 32.3% 25.0% 36.1Yo Alaska 9.400/ 9.9Yo 3.1o/o 48.8o/o 13.5To -12.30k Mnnesota 9.80% 6.9To 4.OYo 41 4To 34.0o/o 55.8% bwa 9.90% 5.1Yo 2.60/o 42.8o/o 39.7o/o 53.1o/o

Oreqon 11.250/" 11.5o/o 9.5% 44.70/o 38.7o/o 58.2o/o

Delaw are 11.69Yo 10.8o/o 6.2Yo 30.5% 25.7o/o 37.4% Fennsylvania 17.02Yo 2.2% 1.9o/o 37.7o/o 37.8o/o 37.7Yo Mw York 17.19o/. 3.4To 0.5To 40.8o/o 38.0% 54.3To

Source: BEA, BLS, U.S. Census Bureau

55 Liz Malm, "North Carolina House, Senate, and Governor Announce Tax Agreement," Tax Foundation, July 15, 2013. https://taxfoundation.org/north-carolina-house-senate-and-governor-announce-tax-agreement 56 Arthur B. Laffer, Stephen Moore, Rex A. Sinquefield, Travis H. Brown, "An lnquiry into the Nature and Causes of the Wealth of States HowTaxes, Energy, and Worker Freedom Change Everything," John Wiley & Sons, lnc., April 2014. 57'Averages are equal weight.

18 Laffer Associales 1' 28t2017

a Eliminate the Gift and Estate tax as part of the first budget in office. o it raises$160 million/year (0.6% of all state and local tax revenue) but it costs much morethan thatas it causes people to leave the stale (see migration data in appendix).

O Embrace zero-based budgeting.ss o Empower the people o Adopt a Taxpayer Bill of Rights.

. Set term limits for legislalors (5) and the governor (2) . Recall petition for state elected officials . Require a 60% supermajority (by conslitutional amendment) to enact lax or fee hikes. Pass the amendment by its adoption by two successive legislalures if the numbers are not there for immediate placement of the measure on the ballot. '1. A very similar measure was implemented as part of California's Prop 13 in 1978 which required a two-thirds vote in each house of the legislature.se 2. ln 2010, Missouri took a referendum to the people regarding the elimination of its earnings tax. The referendum passed by a landslide, and the earnings tax was phased oul.60 3. Prior to adoption of a constitutional amendment, enforce the 600/0 rule by legislative rules or statute. . Require transparency of private interesls thal receive taxpayer dollars. . Allow Connecticut citizens the rights of initiative and referendum.

o Review and compile a comprehensive list of pension, healthcare and other unfunded liabilities at the state and local levels. This will be part of a larger concerled effort towards full transparency. a Adiust spending to revenue and not the other way around.

o Reduce the slate workforce by attrition, and any other means available to the next governor.

o Establish a Little Hoover Commission also known as a Grace or Blue Ribbon Commission. This commission should:

. Consolidate and reduce the number of state agencies.

. Evaluate every department and agency in order lo eliminate redundancy, fraud, inefficiencies, and obsolete concepts. To eliminate redundancy and obsolete concepts. Creale efliciencies in every corner of every workplace. lmplement a reward system, with whistle blower protection, for state employees who offer help which results in savings.

. Reduce regulatory burdens and associated costs hindering business growth. Establish a process: if a regulation is known and respected, it can stay; otheMise, purge it! The goal here is to eliminate waste, abuse, fraud and unnecessary burdens on business and municipalities.

O Otherrecommendations o Reform Connecticut's workers' compensation insurance paid by business, which is still one of the most cosUy systems in the nation.

s For more on infomation zero-based budgeting, see Shawi Callaghan, Hawke, Mignerey, "Five myths (and realities) about zero-based budgeting," McKinsey & Co., October 2014. https:/ /yww.mckinsey.con/businessJunctionvstrategy-and-corporate-finance/our-insightgfive-myths-and-realities-about-zero-based- budgeling ss "What is Popo6ition 13," Califomia Tar Data. httpsj/v/ww.californiataxdata.convpd/Prop13.pdf m "Missouri Eamings Tax, Proposition A (2010)," Ballotpedia. httpc:rballotpedia.org/Missouri_Eamings_Tax,_Pmposition_A_(2010)

19 Laffer Associates 1',U28t2017

o Contract out as many of Connecticut's public services as makes economic sense, and look to transform them into private sector models where possible.

O Ending on a positive note, Gonnecticut has excellent schools. lt's important that the state continues this tradition if it wants to turn itself around. Educational outcomes, year in year out, are in the top 5 in the nation.

NAEP Composite Rankings6' (annual, reading and math grades 4 and 8) Compo!lts ilAt Score Ranklng! (4th and 8lh grsdo maih and roldlng) Stat€ $ato Stat! 2013 Slatr 20'15 State 1992 State 199611998 Sl.lo 20002002 Stlto 2003 St.to m05 St.tr 2007 2m9 20ll -NFT rq r irA 1 T' I j,i--i- r.tr 1 -ffi T- I NH 1 to 2 tE z I 2 tll 2 i/A 2 MA 2 vr 2 [,lA 2 i,tA 2 i/A 2 ti,E3MT3VT3 VT 3 l/N 3 t\t{ 3 iAl 3 VT 3 VT 3 VT 3 NH4wl4MT4 iitl 4 VT 4 VT 4 iilA 4 il 4 itl 4 iiN 4 iit.l 5 i/N 5 KS5 IsIsIsIsIstQsIs W6i/46 t\E 5 nD 6 r€ 6 r.D 6 r\D 6 r0 o 16 to 6 MA7@7 SD7 MT7 sD7 sD7 sD7MT7SO7 tlE8UT8oll ^D7 8 lvlTSSDBMT8NJS NI8NJ8NJ8 WYgWAgN9 WY 9 [€ I NJ I lvlT 9 ]vlT I SD I MT 9 '10 10 Iro oR 10 VA 1O lA 10 A 10 i/E VA 10 i/E 10 liE 10 i,lE NJ 11 WY 11 NE 11 NJ 11 NJ 11 VA 'I'1 [G 11 VA 11 VA 1'I A 1'I uT 12 VA 12 t€ 12 VA 12 VA 12 A 12 A 12 A 12 A 12 VA 12 PA 13 TX ,13 OR ,I3 KS 13 Vf/ 13 WY 13 V\l/ 13 WY 13 WY 13 WY 13 D14[O14 wY 14 [€ 14 @ 14 KS 14 KS 14 KS 14 lS 14 KS 14 i/lc 15 NY 15 M15 co 15 KS 15 0H 15 CO 15 rc 15 @ 15 @ 15 N16F{16 D16 W 16 OH 16 @ 16 I'lC 16 CO 16 KS 15 l€ 16 cD 't7 I{C 17 [,1] 17 oH 17 W 17 W 17 0H 17 0H 17 0H 17 oH17 VA 18 WV 18 UT 18 l€ 18 rc 18 rc 18 W 18 W 18 Wl 18 W|',18 ot( 19 KY 19 TX 19 r.rE 19 NE 19 NE ',19 NE 19 NE ',19 l.€ 19 l'€ 19 OH 20 i/D 20 ].lY 20 WA 20 iiD 20 WA 20 WA m N 20 WA 20 WA 20 ti 21 ]N 21 Rt 21 N21N21N21 N21WA21 N21N21 tl/ 22 AZ 22 i/D 22 i/lf, 22 WA 22 IIY 22 tlY 2. DE 22 tf'/ 22 De 22 RI 23 D€ 23 KY 23 NY 23 N/ 23 t\,D 23 i/l) 23 M3 23 0E 23 NY 23 TX 24 GA 24 WV 24 oE 24 DE 24 DE 24 D€ 24 NY 24 [0 24 irc 24 UT 25 UT 25 UT 25 UT 25 OR 25 PA 25 OR 25 i/D 26 FL 26 GA 26 oR 26 D 26 PA 26 0R 6 D 26 l.rT 26 D 26 AZ 27 t{/l 27 SC 27 D 27 FA 27 0R 27 PA 27 Ur 27 0R 27 UT 27 wv 28 sc 28 rN 28 PA 28 OR 28 D 28 D 28 PA 28 D 28 PA 2A KY 29 AL 29 AZ 29 M 29 |n 29 M 29 M 29 M 29 M 29 M 29 GA 30 CA 30 AR 30 L 30 L 30 L 30 L 30 L 30 [,D 30 L 30 t'tt 31 F{ 31 M/ 31 iD 31 [D 31 TX 31 i/O 31 TX 31 L 31 KY 31 SC 32 LA 32 AL 32 KY 32 TX 32 iiD 32 K/ 32 lD 32 TX 32 i/D 32 l.lC 33 i/6 33 LA 33 TX 33 sc 33 KY 33 Tx 33 KY Cg KY 33 Tx 33 IN3/ DC3/.l-{34 sc 34 KY U SC 34 SC 34 SC U WV U SC 34 FL 35 M 35 N\,1 35 FL 35 WV 35 WV 35 WV 35 Rl 35 SC 35 R 35 AR 36 D tVA CA 36 wv 36 Rt 36 Fl 36 0K 35 WV 36 Rl 35 V/ 36 l-i 37 N tVA i/s 37 AK 37 FL 37 FL 37 AK 37 FL 37 OK 37 FL 37 CA3SAMA DC 38 FU 38 AK 38 AK 38 Fd 38 ol( 38 AK 38 AK 38 AL 39 KS tVA cowA oK 39 0N( 39 0l( 39 FL 39 AK 39 FL 39 0K 39 LA 40 l€ wA E IVA cA 40 GA 40 C'A 40 GA 40 GA 40 GA 40 C'A 40 t{A AR 41 IN 41 TN 41 TN 41 TN 41 'IN 41 AZ 41 i/s 41 l.l\/ lVA FL 'IN DC 42 l+r MA A tlA lN 42 AR 42 AR 42 AR 42 AZ 42 AR 42 42 KS IVA NJ IVA Ir^ wA AZ 43 AZ 43 AZ 43 AZ 43 AR 43 AZ 43 AR 43 MT t'VA tD wA NH I.UA tW 44 tW 44 tW 44 tW 44 l.l\/ 44 l.V 44 tW 44 tW MA OH tVA NJ MA Ht 45 LA 45 Hr 45 CA 45 Hl 45 LA 45 LA 45 OR MA OK tVA PA tVA cA 46 Hl 46 CA 46 LA 46 CA 46 Hl 46 CA 46 VT tVA PA IVA LA 47 CA 47 LA 47 Ht 47 LA 47 CA 47 AL 47 WA tVA VT }.I/A W IVA AL 48 AL 48 AL 48 AL il8 AL 4a AL 48 Hl 48 AK IVA AK lVA AK t{A lr,ls 49 [,lS 49 ils 49 tI\,| 49 lr,ls 49 lls 49 [lS 49 L tVA L lVA L tVA ltt 50 tt 50 il, 50 tJS 50 tltl 50 l.l, 50 tOl 50 SD NA SD IVA SD IVA DC 51 DC 51 DC 51 DC 51 rc 51 DC 51 DC 51

Source: National Assessment of Educational Progress, Laffer Associates

61 N/A means there was not enough data for the state to accurately compare it

20 Laffer Associates 11t24t20't7

a Connecticui has an exlremely well-educated population to supercharge growth. 4rh in nation for Bachelor's degrees and 3d in nation for advanced degrees. The state is ranked 6rh for science and engineering doctorates in the workforce and 6rh on the State Technology and Science lndex (Connecticut Economic RevierY 2017).

llgh schoolgraduale or Bachelor's degree or more Advancod degroo or more more

91.4o/" 16.4v. [,1.] 91.50/. @ I\,D 16.0% AK 91.4V. iD NH 91.3% 14.1./. 91.0v. 5 14.0./. MT 90.8% 6 13.3% A 90.5% 7 12.9./. HI 90/% 8 tr/ 32.40/" @ 12.70k UT 90.4% NH 32.jVo 9 11.70/o 10 902% 10 10 RI 11.7% 11 so 10/" 11 31.0% D€ 11.40/, 12 SD 89.S% 12 30.6% 12 l.lFi 11.20/o 13 tG 89.80/o 13 11.1% 14 89.8% 14 CA CA 10.7% 15 KS 89.70/" '15 29.6% 16 NM 10.40/ 16 89.7% 16 KS 15 OR 103% 17 @ 89.30/" 17 OR 292% 17 l\f.l 10.30/" 18 OR 89.1% 18 D€ 28.7% 19 89.070 19 UT u.s. AvG.' 10.30/.

44.4./" u.s. AvG.' 27.9% 18 KS 10.2yo .20k 19 10.2% 87.90k 20 GA 27.50h GA 9.9% 87.90/o 21 MT 27.40h 20 HI 9.9% 25 OH 87.6./. 22 IG 27.40/" 22 i?E s.60/" 26 DE 87.4./. 23 I\rE i,lf 9.50/. 27 NJ 87.4% 24 AK 26.6% 24 MI L40k 2a t\40 86.8% NC 26.5% 25 AZ 29 t{ 86.6% PA 26.40/" 26 UT L10/" 30 86.6./" 27 ND 25.Ao/" AK 9.0% 31 46I% 2a 25.7% 28 FL 9.00/" 32 OK 85.6% 29 AZ 25.6% 30 t€ 8.8% 33 FL 85.3V. 30 TX 29 NE 31 FL 25.3% 31 OH u.s. AvG., A53';/" 32 NM 33 KY 8.50/" 33 [40 32 TX 8.50/" u tf/ u.7% 34 25.1% 35 a.40/" 35 u.7"/" 35 SD 25.1% u 8.40/. 36 l.lc u.3% 36 M 24.60/" 36 t\47 8.30/o 37 AZ 442% 37 37 N 8.1% 38 GA 83.9% 38 OH 24.10k 7.9v. 83.970 39 ID 23.9% 7.9./. 83.6% 40 23.80/o 41 ]N 43.1% 41 TN 23.00/. 41 7.6./. 42 NM 82.8% 42 OK 22.70/. D 7.5% 823% 43 IN 22.50/. 43 7A% 44 AR 82/% 44 22.0"/. OK 7A% 45 82.20/ 45 21.4o/" 45 SD 7.3% 46 82.1% 46 21.40/. 46 t\.,ts 7.1% 47 KY 81.7% 47 KY 21.00/" 47 6.9% 48 80.6% 48 [4S 1S.6% 6.7./. 49 t\4s a0.40/o 49 AR 18.9% 49 6.70/o 21 50 79.9% 17.3% 6.10/o 'U.S. average is equal-w eighted Tax in connectlcut Growth Motrics and Rankings Before and After the lncorr Employment Labor Force Particlpation labor Force Bnployment Rate Adult Population Rate tPr N 1976-1991 1992-21116 1976-1gll t9!t2-2016 N 19?6n991 1992-m16 1976-1991 1902-2016 1976-1991 1902-2016 1 lW 12'lo/o t.l\/ 97o/o lEd 3.7 t N/ 114!o tIV 95% 1 l\{\/ 115% t..l\/ 1190h r ur 7.9 t'0 :il-e-q" -ts---lg 91o/o AZ Tlo/o 73lo 2 Vf 8.1 WV 1.2 2 AZ 14B -0.4 AZ 83ok AZ 82Vo 2 t\m 7.5 m 2 !x8 2 AZ 73% AZ 3 VT 7.8 PA 1.0 3 FL 85% tT 73Yo s.P -9.,8 3 Ft 81lo UT 70% a. 3 R 61% tfi 760h ,.? 4 AK 67Yo @ 610/0 .!m -- 57o/o 4 oE 7.7 l.{Y 1.0 0) /t VT 7.1 l'lY -1.4 4 AK 690/0 @ 4 AK 59o/o @ 65% 0.4 5 ur 63% D 58% o 620/o D 53o/o 5 tvil 7.6 lv!\ Uo/o 5 I\,l) 7.o A ''1.6 5 uI o 5 CA 4o/o D 7.4 NH -0.3 6 WA 620/o FL A3o/o FL 7.0 l'lE -1.8 6 WA 57o/o FL 48oh 6 WA O UT 44o/o TX 60% 6 -0.4 7 CA 55% TX 52Yo -1.8 7 t\l-l g% TX 48Yo 7FL 7.3 N 7 TX 430/o FL 55% 7 r,E _6-6 SN -0.5 E Ml 53o/o GA 47Io 54Yo GA 45'/o 8 NJ 7.3 SD 55% E DE 6.5 N -1.9 8 IX 8 WA 430/0 GA irE 6.8 NJ -0.5 9 lW 53% WA 41Yo i,lC -2.2 9 CA 53% wA 8% 9 9 NM 41% t{c 50% 9 NH 6.3 10 TX 52o/o l,lC 37Yo 10 SOYo t{C 35'/. 10 oR 6.5 Rl -0.6 48o/o 10 wA 6.2 ol( -2.3 Nf\it lO |tl 41o/o WA l'l t\ilo 6.4 FL -0.8 1l H 50o/o OR $o/o 6.0 uT -2.4 1'l @ 44% oR 320/0 tt GA 4oo/o SC 44Yo 11 t\iD -1.0 12 C1A 49o/o ND Uok 44o/o t\D 32o/o 12 NE 6.0 A 430/o 12 MT 5.9 LA -2.5 12 GA 12 &% oR 13 i,D 60 t\,lf, -1.0 13 @ 450/0 sc 31% 't 13 NE 5.8 NJ -2.9 t3 vA 43Yo E 29% 13 @ 37o/o DE 43oh 11 AZ 5.5 Lrr -1.2 1'l OR 44Yo D€ 30o/o gvo 14A 5.8 W -3.0 14 VT &oh sc 280/0 t4 sc 33% AK 15 NH 5.4 LA -1.2 t5 vr 430/0 cA 30% t5 wY 5.4 N,lA -3.0 15 Hl 39% TN 28Vo 15 l.lC 32o/o l{vt 38o/o 16 r,,tY 5.3 CA -1.3 16 VA 43Yo TN 30% 16 fD 5.4 L -3.0 16 OR 39lo SD 27Yo t6 vA 320/o vA 370/0 17 PA 5.2 lL -1.4 t7 DE 400/o Mr 30% 17 NJ 5.4 FL -3.1 17 E 37!o WY 27% 17 0R 29% lN 350h r8 vA 5.1 @ -1.5 t8 t\'D 37lo AK No/o lE VA 5.4 AZ -3.1 1E I\iD 370h Mr 260/0 t8 D 280/o Mr 35Y" 19 A 5.1 oK -1.5 '19 SC 37!o NH 28o/o 5.2 R -3.2 19 D 36% AK 25o/o t9 vr 269/0 CA 33% t9 LA -1.5 37o/o VA 28o/o 250/0 2lt ND 4.9 AZ 20 i/E 20 oK 5.0 wY -3.3 20 sc fi"|" Nni 20 [,D 25o/" WY 33o/o 21 rvlT 4.8 Ml -1.5 21 NIC 367o SD 28o/o PA 5.0 IN -3.3 2t ilC 360/o CA 257o 21 E 240/o Fl 30% 21 -1.6 22 D 35o/o WY 27o/o 35o/o 25oh 22 NM 4.7 VT 22 AR 4.9 KS -3.4 22 lfE VA oh 22 IN 239o i 'l 29o/o 23 W 4.7 0ll -1.7 23 iit{ 32Vo NM 23 0R 4.9 @ -3.5 23 tvN 31o/o Ml 22% 23 IvE 22Yo SD 29o/o A Hl 4.5 t\,D -1.8 lvr.' ,3% 2'l Wl 4.8 OH -3.5 24 $N 31"/. M'l 22oh ?.T]t"z: 21 W 21o/o hll 28ok -2.O 25 WY 29!o t\'D 23o/o 25 TN 30o/o OK 21o/o 25 CA 4.5 NE 27o/o 25 KS 4.8 NH -3.6 25 AL 18% AR 26 0H 4.5 TN -2.1 26 IN 29Yo OK 22o/o 26 SD 4.8 niD -3.7 26 AL 28To [/D ZQYo 26 lvN \a% f\iD 260/o Wl -2.3 27 NJ 280/o AR 20vo -3.8 2f OK 27Yo NIE '19% n LA 4.5 * 27 OK 17% OK 25o/o 2t L 4.8 VT -28 r7% ]\40 19% 'l7o/o KS 4.4 Ml- -2.4 AL -4.1 28 AR 27% t\'lC 2E 28 AR 17o/o l0 25o/o 28 TX 4.7 cA leolo - 1?% 29 SD 4'4 tvC -2.5 ?6"/"_ ry 29 AL 4.7 Mr -4.2 i;A- ,o% t4 ?x 29 I\ilS 160/o t'lE 22o/o 3tt AR 4.4 D -2.7 30 AR 26o/o Hl 19% 30 D 4.3 t\tl -4.3 30 LA 25o/o N 16% 30 LA 140/0 w 21% WY -2.9 31 i 3 24o/o NE 19to -4.3 31 tvlO 25"/" AR 16Vo 3l oK 4.3 3l Wl 'l4o/o il,O 21o/o 31 AK 4.2 Ml t\ilA 160/. 32 WY 4.3 KS -3.0 .19% 32 0H 4.0 D -4.5 32 NJ 23o/o W \z_A*_z.a'1: ,." gt -3.0 33W 22o/o W 17lo f,'-Z:- -4'5 33 MT 23% KS 13Vo lL 4.1 AR 21o/o 33 Nlt\,il 4.0 C'A 33 KY 14o/o KY 34 4.0 TX -3.1 34 lvr 220',/o vT 16Yo -- WV 4.0 wA -4.6 34 W 220/o [rA 13% @ 34 NJ 13oh N 20olo 34 -3.1 2!o/o NJ 15oh 12o/" 3!t AL 4.0 wA 35 irS '19% 35 CA 3.8 KY -4.7 35 i,fs 22oh A 35 Mf 12% KS t!o,l -3.2 36 KS 19v' KY 14% 3.8 lvC -5't 36 KS 19% VT 120/0 36 irA 3.8 36 Rl 120/0 VT 18% 36 @ -3.2 37 t\rA 19Yo t'lY 14o/o 12Vo 37 C.A 3.8 C'A rfi' 3.6 0R -5.2 37 R 19olo l(Y 37 tvlo 12o/o IvlS 18o/o 37 -3.3 '180h KS 140/0 11o/o 38 TX 3.6 0R 38 R 38 Rt 3.6 AR -5.2 38 Kr/ 18Vo NJ 38 ilA 11% tlilA 18% 39 3.6 KY -3.3 39 r{/ 17yo A 13% 3.5 TX -5.4 39 r\IA 17% LA 10Yo D 39 KS '110/o NJ 160/0 39 TN /O tJE 17o/o LA 13Yo '6 5s /o NE 160/0 AL 100h 40 AK 33 r-; tt{t 'l1Yo t\'C '16'/o - I 120h N ^ra 'lovo 41 Rt 3.1 tvls -3.9 4t oll 160/o AL 11 AZ 3.4 AL -5.6 41 L 150/o NrY 4t Mt 10% A 15% 12 t'/l 2.9 AL -4.2 42 t(Y 160k PA 120/0 42 iiE 3.3 i,ls -5.7 12 lll 15oh m 9o/o 42 0H 7% LA 15% /fit TN 2.9 VA -4.5 4:t PA 15o/o t\'E 11o/. Ml 3.1 NM -6.1 /t.lN 150h L 80h a3L 7Io L 13oh 43 -4.6 M 150/0 lL 110/0 8o/o 44 NC 2.1 AK -11 rO/ 2.2 VA -6.3 44 PA 14o/o i,ls '!t N |.N ?% f 1r% 44 -5.4 N 15Yo irs 10% @ 1Yo 45 SC 2.1 NM 45 2.O NC -6.6 Oll 14% IlE N 45 I\E 7oh I'fY 12o/o 45 C'A 'f5 -5.5 46 L 15Yo Rl 9% 57o 46 WV 2.O NC o 46 N 1.9 AK -6.7 46 l'{/ 14lo Rl 46 SO 5o/o M 11o/o -5.5 47 SD 'l3o/o M 8o/o -6.8 47 ND 13oh OH 4o/o 4? N 1.9 sc { 5Yo PA 100/o 47 l.lc 1.8 Hl WV 7oh '07 m 48 f\rs L8 Hl -5.7 48 tD 'l2o/o 4S SC 1.4 0E -7.O 1s sp 13% lTrY 48 ND 40/o R 10% 49 t.l\/ 1.6 DE -5.9 .19 A 9% Ol-l lYo H -0. t sc -7.2 v\ / 110/o M 3% -5ow 49 WV 30/o ol-l 10% '[9 't9 -6-7 ?% I 6% -7.8 50 A 100/. wv 1Vo 50 lCr/ 1.0 t{V !i0 A 1o/o WV 4Vo 50 r\^/ -0.6 t.l\/ Growth iretrlcs and Ranklnes Before and Afrsr tho lnconD Tax h Conn€ctlcut

PrcAcddry (lo.i Stit Prodlrct GgP P.r C.ptr N t- tt7G.t90t lel2-2ot6 t97ct99t r!e2.20ra ItTclgol ttt2.20t6 nt jiT- 1 i/A '198% lt) 202% I il/ 1r3% 33r% 1l-iffi |p % o 2 FL 356% lW 309% 28721%{152!% 3 lt| 193% trJo 1S8% 349% 304% -.-f*fft- 3 Nl r{) 3 ru 225% i/h 157% o a NJ 187% Ir/h 156% a Az 332% fX 288% a t*l 219% uT r50% a. ID 183% 155% 5 tE TX 5 GA 306% CO 271% 5 l!l{ 217% ilY 15A% (D cR182%A155% GH303%A-2266% c Ht 189% A 151% 7 SC 173% UT 15it% 7 CA 300% OR 258% 7 Rl 197% OR 150.n E GA 172% iE 154% I E 298% WA 249% I GA 190% l\E 147% 9 H 170% SO 153% I-T** zg. 0 va 190% t/D 151% 't0 va 164% NY 151% l0 wA 285% "{-D 226% t0 vT 189% TX 143% ll r€ 166% CA 1rE% 11 VA 242% Ft 226% .fi sc 182% OK 135% '12 so 182% WA 148% 12 SC 274% flc 225% 12 i/O 1$% m 144% ll iV 159% VA 1rr3% i3 ru 267% SO 223% 13 itY 186% Mr 129% ,ta ca 15a% oK 141% ( vr 2u% ca 222% la trc 174% ca 112% 15 irD 15A% n l1rc% 15 l€ 262% tlD 216% t5 FL 183% tA 125% 'tt TN 157% rc 136% '16 uT 260% VA 211% 16 i/E 175% WA 136% '17 vT t55% it{ 13a% 17 @ 258% MT 200% t7 TN 170% l|/Y 116% It FL 147% lvlt 13a% 1a l,n 254% E m7% lE sD 181% ilt 131% 19 @ 147% KS 137% 19 i,iA 253% tUA m3% tt cA 178% l|/v 132% 20 AL MA% DE 136% zo rx 244% tE 202% 20 irit 175% R 130% 21 L/E 1zl5% 1iyr 2l i/C 236% iH 196% 2l AL 164% I\t{ 127% z l\l?.l 145% -oH 134% zit R 233% TN 194% z wA 16€% W 126% 23 PA 141% Wt 1U% 23 tN 231% OK 194% 23 FA 168% KS 128% 2a aR 141% L 133% 24 il\l 227% lv?.J 193% 2a @ 142% VA 127% 25 L 140% Rt 133% 25 i/tl 223% SC 192% 25 AR 160% OH 126% 2t KS 139% Nr 131% 2C AL 213% A lag% 2a i/P 163% @ 125% 27 Kf 138% N 130% ? NY 205% WY 187% 2tL 157'h L 128% 2"! WA 13A% @ 130% 2l AR z)3% t{/ 186% 2! AZ 1sO% N 129% 2t tw 1 37% tA 1n% 20 0R 201% M\t 186% 2! tE 156% ft]* 30 i'O 136% ll]t 128% 30 ax 198% t{ r74% 30 0H 1il9% tx 115% 3l its 135% TN 1?7% 3'l sD 196% wt 174% 3l lvs 143% vT 109% 3:t tE 134% WV 126% 32 i/D 1S3% KS 16ge; 3il KS 156% i/E 110% 3tw131%WY1% 3:l ot( 186% PA 169% 3:| W r48% M' 107% 34 0H 131% AL 125'/, L D 1E6% AR 168% L lW 143% llJO 115% 3!t TX 12E% cA 123% 3!t KS 185% i/A 161% 35 KY 142% TN 119% 36 N 128% AR 123% 3t wl 183% LA 159% 3C LA lrK% l\lJ 116% 3f (x l27 sl: 123t/, 37 nA 181% t 158% 37 UT 15t% rc 117% 36 AZ 127% Kf 122V, 38 r.rs 181% [L 154% u fx 142% aR 112.,/. 39 LA 1259" t6 122 39 LA 179% Rt 153% 39 0K 145% M 107% {o uT 121 i/E 119% |o KY 175% At 152% 40 t{\, 132% i/6 107% al M 118% i/O 119% 4l f 175% Nj 152% 4l N 135% KY 110% iul a 117% NJ 118% a2 vtY 175% A1 150% 42 A 13s% AL 108% a3 t{\,t 114% VT 1rs% 43 t€ 173% I14r% /(l oR 133% GA 112% aa wY r13% 113% a4 164% 148% M 0H Vf 44M129%FL10e% N r(t D 112% FL 113% a5 N 162% its 145% ils WY 12 SC 103% @ N aa a 109% tw 1@% at M 151% lvE 14,1% /l6D 124% D 99% o 47 tO 106% D 107% a7 tA 137% WV 141% a7 tD 123% AZ 101% .'.t /O wv 105% Az to7% at t{) 131% Ht 1320,{ a8 wv 113% AK 61% a9 MT 89% Hr 05% /O Mt 130% M 130% ita MT 105% tw % 50 AK 7E% AK 73% 50 wv 120.,4 aK 123% 50 aK 88% H 7E% Levels and Rankings Before and After the lncon€ Tax in Connecticut (1976,1991, and 2016) Lrbor Forca Partlclpailon Rate Anpbyment Ralo Productlvlty GSP Fr C.plta t- l\) 0) 5 1976 l90l 2016 1976 1976 't9?6 1"* M M I tw il.7 i/tl 69.6 t€ 69.2 I At( t4r.4os AK $8t!.103 tf/ $'t63,134 I AK $31J36 AK 958,395 irY $94,072 o 61'6 633 lE 6?3 , wY sr?336 (E $64.090 CE $156.73 2 WY $17,t40 E l4L?4O E $r3pr3 , H 613 Mr ?r.. A , l€ tE 613 o AK ?24 iE- 615 uT 6?5 SO 6?.0 3 LA Sr4l5' H 3613S4 AK $150.654 3 HJ14/06 H S4t,569 AK 092,951 o 3 At( 6S2 :-lL-9:-1 o 1 co 663 ?15 695 a @ 62.9 t] 6n A 6'?.0 l{Y S23.646 tlY $61.337 t\iA 3146,973 a tw $'t3,515 I $rrrc r\,tA irl.ar€ a. I 'a o 66.3 l€ 71.2 $) 69.0 5 Hr 62? Nl 6h 1!t1 663 5 E $13,003 wY ,so4 ogr,zso 5 l.lc t-q9'.,9.'.1 ;$r4.ss? I o 6 t+{ 661 Ur ?O' t+t 68.7 owY 627 wY 6?'0 M{ 6A? -:--1--t3S9-6 E $22.639 NJ $5E,494 cA $144,072 0 L $lr,ElS NJ S36.523 t€ $89,477 (h ? trf{ 653 vA ?03 ur 6&? 7 SD 62.4 @ 66.9 uT 66.4 ? wA $rrJr5 wY $ssJos wA $136.319 7 tA 512,711 r.IY $35,272 CA $84,864 t w 65.6 WY 70.7 w 683 E KS 62.3 I 66s w 65.4 I CA $2r,94r CA $56,594 NJ i'135,147 E TX $12.699 cA $34,680 WY $E3,669 70.6 6r.1 66.8 64.8 9 L i/t{ i55,053 wY 3132.198 , cA $1r.4?2 MA 134,229 WA $E2,0A7 _9 t€ 65.4 @ KS ,rc 6rl so vT $2'|,799 l0 vA 65.4 W 70.4 rc 5?r l0 i/tl 62.0 A 66.8 @ 64.7 l0 M t21.n0 LA 354.304 N) 3't29.232 lo wA slrj,r, wA 333.,162 NJ $81.939 ll t4t/ 653 iD ?or wY 67.0 rtwl 613 KS 6d' KS 64.3 ll TX 321,140 WA 152,80r L 1128,615 tl Mr l1r35o L l3r3rs iD tsop3s l, Ks 65'0 N/ ?03 vT 663 I'.t+l 6L? vA 66.7 iD 642 12 l{t 321.048 L 352.323 rx $127,590 t, t\t s1r2o6 l.l\/ $32,839 t€ $79,309 13 l,iA 643 VT ?02 co 6a, 'l! tA 6r' w 66.6 wY 63.5 t3 N/ $m,877 N/ $49.542 H $126,250 t3 @ $1't,975 t\il 3:12.070 L t78,914 -n1;--a; -66r "ii--vn- n -ror ;K or-e AK:;:' lia WV $20,487 TX $48,229 ;p vA 932.052 t\,tt $??633 "15 *601 r-;; lzs?_:_ SO 645 KS 6C; I@ t5 tlD ttv 663 i,tA 62.5 t5 M'l $20.407 VA i48,085 vA $121,454 l5 A S11.739 @ 131,372 TX $77,50',1 ;f-al E 6r,4 i/O 65.4 16 fo 60l iD 66J i,O 62.4 16 0R ilrps6 GA l4?53S PA $118,453 16 tvt,l $11.6r/ It/o s31"036 H $?O?5? l7 M) 64.4 SO 69.3 t 652 l?il ml vT 65.6 vA 62.2 't? oft s19,933 M $4r3S4 r,q 1118Ot, ;Irliso? LA $.31011 VA tr5564 r8a 613 H 5r2 m 64' It N 50.0 E 651 tt 613 isl s1r366 M) $46.983 iE $r1?311 It KS 3fi,504 TX $30?31 00 $?436' l, CA 633 IX 68.4 vA 64.8 t, sc 5r3 r,o 653 AK 61.7 t9 Mr t19,4m @ $46.919 itl $t16.205 't, l.l $11'48' iE $30330 SD l?32r5 ,o lt 633 [G 6S3 N 64.7 20D 59.8 rc 64.2 D 6{5 20 PA $19,235 m $46,88:) G $116,032 m $11J53 GA S"i'1 A $'3J'5 -rl ^r, rx fi,? ltc 6sJ Rt 64.4 ,t ur 5r5 TX 63 L 613 ,r N $1rJ4t tt'l $46,079 @ $1'5,80' ,t oR s1135S KS lrr33o l*l $'?t4r4 ' ,, D 6.33 i,A 6E! o 64.0 22 L 58.8 iiD 63.5 Mr 612 ,, Az t1r,O46 ot $46055 0i s115216 zI w $t1,338 r+t 129,192 uT $71,070 ,3 VT 63t iD 6t3 Mr 633 ,3 CrA 5S"? D 63.4 R 61n ,3 CO StrOrS R 345315 GA S11r3r' 23 tO__$11,321 ot-t t28,198 m $70,857 -;lf ,1 rjr 63n i/lc 6Z' Nr 633 5s3 WA 63.4 r{ 603 ,a r{ l1r.ou ll,t $448S8 l'€ 11113?5 2,a Ofl $11,308 r,s $28ls? Ks $6r3i8 ,3L 633 t 613 wA 63.7 25 iitA 54.4 oR 63.3 rlE 60? 25 i,l{ $18.626 IN $4t.969 rN s110,168 25 tufr $11.240 w $26.162 oR s69.090 ,E El6's WA 6Z' TX 6a' Mr 5?3 i,€ 632 TX 60? 26 f\D $18,823 R $44,314 R $109.854 ,o r,lj i1123' im $rso41 Ol $66,,160 '6 6?.6 63.3 27 62.9 NJ 60.6 27 $18,720 [.lc Nv_ j10e,:6:_ 2' O $11,184 M $27,952 Wt $67,722 ,?R 613 D m Vr 57.8 L *OZZ rG $44,176 ,s oR 6r, G 6?6 [,€ 63.'l ,E R 5?.6 Mr wA @.2 ,E D $1&?05 KS $,14,123 SO $109,333 ,s rjr $1L11' R $rr38o R $6688€ 29 CA 62.6 Mr 67.4 Ht 52? 29 E 57.4 GA 62.5 PA 59.8 ,, Ir,o $18.6r? rlc $43,108 rA $1orJ18 29 VA $11,060 uT $rr36s GA $66^516 30 to 62.5 NJ 66.9 oR 615 30 ?rc 5?l NJ 5'A E 5'3 30 uT $18,686 KY $43,86',1 r.^4 $107.869 30 t\,o $1qr53 PA $r?563 N $661450 3l tll 613 R 66'4 oH 525 3l OR 56.8 t\A 62.2 m 59.5 31 0( llE,599 t€ $43,750 KS $107,767 3l tMA $10€O' rA $rr535 r,€ $65314 3' n€ 6A? CA 663 tE 62.5 32 CA 56.8 SC 52.0 oH 59.4 32 i,lA $18,494 N 143,652 N $107.525 3' n6 i10i?, so $27,179 LA $65,537 33 WA 6{5 SC 663 c,A 62.4 3 KY 56.8 N 61.9 C,A 59.0 33 KS 11836' Ni $433€6 ur 310?J1' 33 tC $1or.7g w 9rrj3? iw $64,204 31 Mr 615 GA 65'9 cA 623 3a ol 56.? cA 5r.3 CA 58.9 3,a KY 318,421 M 543,211 r,r{ $10?p29 3a oK t10,305 N $27,022 lvlC $63,240 33 NJ 61.5 N 55.8 ilv 621 35 [,G 56.4 oi 612 rc 5&' 35 W S1S3O3 AL $4arc3 M $105,943 3!l PA $10,303 M,t $16516 rN $63P16 33 of{ 615 0t 655 rc 61.8 36M 56.1 R 50.7 N/ 58.6 36 [O 918,225 W $42,300 o( $105.175 36 AZ $10,279 oR $26,489 M $61,706 3? i/b 60' trt 65'0 M 61.3 37 WA 56.0 cl( 59.7 0< 58.2 3? VA $1?B60 O( $4r2rl KY $104,130 3? rc $10,274 TN $26,477 oK $61,229 3s ra, c,( 633 oK 61.2 3t TN 56.0 M 59.5 M 58.2 wv $41,9't3 w $103,488 3S GA S1o2sS AZ $25.7m vT $160,341 _90:1 ._38 1._._lll.19 39 AZ 59.8 t!,ll 63.7 lf'/ 60.6 3, O( 55I ,t 5rl NY 5Z? 39 IN 317.522 oR $41,856 i,o S101,286 3o rN $9,814 SC 325,528 t{r,l i57.964 ^ 63.2 603 M 5-r-.9 nt 5?2 all GA ti7,,148 vr ,361 AL $1m,482 .0 \,w $gsr3 FL 925,527 KY $56,977 'O t|!l 59.7 m AZ 10 N' 55r _ ,al at TN 59.6 AZ 63.2 m 60l al tlls 9.7 lN 56.9 AZ 5?l 'll AL $17.386 W $/1247 wv s9s.635 SO $9,665 rc/ t 5n4s Az $56319 ,O OK 58.8 IN 63.i FL 5'2 Mr 1' r.E $16536 A 14120? FL $9S.034 a, r/T $1316 ol< $25.226 MT t55,790 '2 --.14-4- T...... T:9 .r ,(' ils 58.5 AR 62.6 sc 5rl /lil AZ 54.0 AR 58.0 SC -T:l56.3 /(t AR $16.523 SC $41,187 AZ $98,802 iB R $9,383 r,p $rsJr6 Fr- 155,?80 4 PA 58.2 FL 62.3 LA 59.1 4 PA 53.6 KY 57,8 AR 55.8 11 R $162?€ SD $40S68 SC $r5BO3 ilia AL 09,239 D $25.077 i/E $54. 15 tX 5S2 KY 613 AR 58I il5 AR 53.6 FL 57.6 LA 55.5 15 r/T $1624' AR $39'?6' AR $13630 ,(' t+l $9.154 i,E $rd?66 sc $1e55 N as AR 5Z? N/ 5r! tr, 5r5 {s AL 53r 5?5 r(Y 54? {6 $6,05e D $39.563 VT 593.190 i|6 SC $9,055 AL S24,4'r2 AL $53,683 ^l/ E @ ,47 53.7 il7 1J54 il7 FL $9,023 AR D $52,83s 1? AL 5?.o i,s 61.8 KY 57.6 LA 52.6 LA 57.1 tSi i/C t15,996 Ir,E $3rjr3 Mr t $23,056 oN il6 LA 56.4 AL 61.7 AL 56.8 46 r.{Y 52.2 AL 5?I AL 53.4 ,at SO tt5,,193 t€ $38.779 lvs $89,303 iat liG $9.016 MI $23,0:]7 AR $52,235 !49 56.5 52.4 $15,114 [,E $E9,268 1, AR ,,rS S11336 WV $11333 { 'l9 FL 553 LA 6{ 6 irs 560 FL 50.3 i,G li,ls € sc nB $37,732 $8^861 so w\/ 51r wv 55r wv 532 50 wv 4?3 wv 4r3 WV sOJ 50 t+t s14.827 MT $36.725 D $85,872 lat i,ts $8.781 wv 320.65t irs u7.117 Laffer Associates fl28'2017

AGI p€r brson (0o0s) AGI (OC0s) hfbw from O.rfkllv to ilel hfbw trom hfb\fl from Outfbx to tbt hflrt from hfbr from Orffbw to l$l hllolv from 96,708 82,366 14,U2 $105 $85 s20 ,162,306 $6,993,126 $.163,180 ilchiFn 8,298 3,970 4,328 t74 $84 -$9 $617,8s1 1333,178 $284,673 18,886 14,572 314 ts6 $87 t8 s1,804,725 01,624,218 $180,507 2,716 1,3€6 1,360 l8o t75 $ am,u2 t103,501 $116,541 t'lorth Dakota 1,'108 n2 816 0,52 $43 19 357,472 $12.584 i44,888 DBbw al6 1,958 1,589 369 367 i64 13 t131,012 $10r,970 $29,042 tilssbslppl 811 835 -24 379 33s $63,r"77 ,s96 527,1a1 hdbm 2,939 2,67 572 31 121s,001 $189,051 S26,040 Sodr' Bkota 729 373 3s6 f'37 sss'71 ,S18 527,@2 S20,604 $6,478 Kans6 1,177 1,163 14 $66 t62 s3 $77.408 372.6s5 $4,773 O*lahorE 1,441 1,340 101 $58 $60 -s2 183,140 t79,881 f,3,2s9 939 810 129 $57 t64 -s6 ,880 151,528 $2,352

t{ebraska 6:b 652 ,16 $72 $71 $1 $4s,855 $46,368 -$513 1,257 1,408 -151 060 $5s $5 575.826 $77.825 -$1,999 Abska 54a 766 -218 t40 $36 121,901 $27,658 -$5,757 llbnlana s51 667 -116 654 f,59 -s4 $29,976 $39,278 -$9,302 tbw aii 2,W zus -31 ls2 049 13 1119,696 $129,52s -$9,829 baho 526 s77 -51 150 f,67 -s17 s26,373 $38.530 -512,157 Loubbm 1,161 1,845 -384 t47 146 ll t68,448 f€5.224 ,$16,776 696 933 -237 184 182 t2 $,739 $76,900 -$18,161 Ol'b 5,139 5,902 -763 t85 178 t7 l4i)7.037 t458.786 -521.749 Ahb8nE 'f ,461 2,073 -612 956 ts1 t6 182,(X3 $104,884 -$22,U1 tlah 2,61 1,92 519 162 t99 -$36 412A,444 $152,111 -$23,667 lcntucky 1,324 1,858 -534 s74 173 s1 $97.968 $135.435 -537.467 lbrth Carolila 17,354 20,144 -2,790 $79 170 $1,367,555 11,405,252 ,537,697 Mnngsota 2,552 2,503 49 $9r $108 -$17 1232.845 5271.250 ,$38.405 tlstrbt ol Oobrbla 1,977 3,390 - 1,413 $77 157 s20 3152,541 $192,572 -$40,031 Ihob 6,478 7,927 -1.449 s112 397 l1s 923,614 $770,,€0 -546,8s lvbsouri 2,056 2,448 -392 i79 t86 -s7 t163.067 t210,120 -547,053 2,049 2,383 -334 $71 183 -$12 $145.826 $197.181 -S51.35s ft}od€ bh.d 13,425 12,534 891 ls2 t61 -$9 t693,050 $7m,,m8 -$67,358 1,564 2,W -1,120 $58 163 .65 $91,289 $169,295 -$78,006 O€gon 1,426 2,189 -763 $50 i76 -$27 $70,72 $166.948 ,S96.226 $totr'E 500 517 -17 t63 1282 -9220 $31,356 $1,15,91s -S114,ssg Wathirg on 4,443 6,1(X -1,615 169 $74 -$s $310,136 $450,026 -S139,890 i/hryb"d 6,3()8 8,708 -2.400 $73 572 $1 34€0.133 3623.397 -$163.264 3,535 5,422 - 1.887 $50 f,67 -$17 $175,493 $361,830 -S186,337 2,1U 4,544 -2,060 t61 S75 -$14 s152.469 1X43.472 -S191.003 Oob.ado 3,870 6,107 -2.237 $61 175 -s13 $456,49'r -9219,275 4,49 7,308 -2.854 s14 t61 -s17 6197,245'2s7,216 0447,306 -$250,061 Arizoag 4,034 6,96:| 161 t74 -$14 s245,503 $s18,010 -5272.s07 Foreign 19,206 15,418 3,788 s61 $90 -$3 $1,223,367 S1,511,817 -S287,8s0 RnrEylvanb 12,810 16,087 -3.277 166 173 -$7 $844,813 $1,168,655 -$323,842 l,br'v l.beshhe 5,467 7,U1 -2,354 163 $87 -s2s $342,911 $6€2,236 -$339,325 G€o(gb 8,073 13,24 -5,147 $65 $65 -$1 $521,878 1863,129 -S341,2s1 Vtginie 10,107 15,800 -5,693 I,65 $70 -ss t655,527 $1,100,898 -$4s4,371 South Carolrla 5,567 10,793 -5,226 $43 $77 -ti:)5 s236,72A $35,519 -$598.791 Calfomb 18,827 26,578 -7,751 $82 t88 -$6 $1,s40.092 32.340.807 -S800.71s Texas 9,585 '16,6€7 -7,to2 $80 lr01 -s20 lz1,4s5 01.680.301 -$908.846 'llbssachusetls 44,442 51.495 -11,013 $60 $6s -$5 S2,411.673$3,325,361,S913,688 Fbrida 32,163 66,s79 -34,416 lss 1117 -$62 $1,753,168 $7.775.349 -$6.022.181 396,606 a71,58,t {1,978 130,458,364 t39,780,421 -$9,32:1,057 page. year Gonnecticut: Just look at the table on this The first for these IRS numbers is the '92 income year whicfi ie aloo tlre '93 filing year. Connecticut put in its incorne tax in 1991. Connec{icut is quite Really is Race the Bottom This the to appnopriately labeled, 'in the led.' N t- O) o)

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$ 0.8%$ 0.796vr 0.7%w o.5%E 0.4%E 0.2%n 0.3%n 0.3%H 0.3%R 0.4%n 0.4%so 0.4%H 0.5%il 0.7%so 0.5%q 0.4%E 0.3%m 0.3%E 0.3%G 0.3%c 0.4% w 0.3%so 0.1%

u 0.6%vr 0.6%6 0.4%n 0.3%w 0.3%AR 0.2%AR 0.2%v^ 0.2%R 0.3%q 0.3%so 0.3%vr 0.3%@ 0.4%H 0.7%E 0.5%E 0.3%p 0.3%* 0.2% n o.2%u o.2% il 0.39{H 0.2%w 0.1% AL 0.6%H 0.5%9 O.4XM 0.3% 6 03%At 0.196G 02%re 0.1%va 0.1%wA 0.3%N o.3%vA 0.3%vr 0.4%E 0.5%aR 0.4%AR 0.3%q O.2%^L O.2% u 0.1%ry 0.1%E 0.2X E 0.2%A 0.096 v,L q.!1 il_q:963I_j1966 0.3%AR 0.3%1T,,!rll|va o.zxn 0.1%u 0.1%_n__o3%vA 0.3%q 9]!q ogxAt 0s%AL 0.4%w o.2r%-{,,9?aw 0.2%d 0.1%a 0.1%* 0.1%q 02%AL-0.1% 3.2% re o.a%lg_-glLu o.3%E 0.2%A! 0.2%E-0.1%e 0.1%G 0.1%c 0.1%AR 0.1%j!_-93[ar o.z*il 0.3%vr 0.5%u 0.4%E 0.2%q 02%o 02%s 0.1%a 0.096sp 0.196rc 0.1%AR-0.1% il 0.4%AL 0.3%E 0.3%AL 0.2%I__9ll!q-O.rX6 0.1%so O.Or%AR 0.0%il 0.1%a 0.2%re 0.2%AL 0.3%so 0.4%E 0.3%H 0.296u 0.1%n 02%u 0.1%q 0.op/6AL 0.1%aL 0.096m-0.2% 2.3% w 0.4%s 0.3%E 0.2%So 0.2%rc 0.096vA-0.1%E 0.0/6wA 0.096n 0.0/6vA 0.1%fi 0.2%m 0.2%s 0.2%E 0.3%tr 0.2%re 0.1%w 0.1%w 0.2%vA 0.096M 0.0|96vr 0.1%a -0.1%a-0.2% 1.4% vA_0.3969_olt_r 0.2%m_0.2968 0-096f -0.1%o_-0.096q -0.1%s o.cniY_9.&wA 0.1%r_02%r 0.2%H 02%l€--9.&l]--Sl%vr o1%,ll--9:1Lm 0.G/6 D 0G/6 r 0096 d -0.1%R -0.2% 0.3% -o.r%-i!---o.1Lu 0.096w o.rx!--9&-[--9iaw ozxs o1%]1--9:1AVA 01%r o.o%5-:0:!LR -01%11--!.11 q'o.zx w __0.:%w_9?1 fr o.2%y_,o&* -o.rxr,-9lLw '0.1%r -0.1%aa

E 0.2%N 0.1%vA 0.1%q 0.0196w -0.2%m-0.3%w-0.2%D-0.3%m-0.2%6-0.1%q 0.096w 0.096vA 0.1%fr 0.0l'6m-0.1%w 0.c/6m -0.1%D 0.096fr 0.0968-o2%fr-0.1%N -0.3%il -0.2% 26 fr -1.1% -0.2% s,_-0-.3%_,[t m,_:9.3ju-.Il. -0.2% 0.1i1-PA,-0.1% w -0.2% m -0.1% h -0.1%_Yi__,0.0e6 w-_0i9b,11_:0_?L i1*:9,1l[ A -0.3% M 4 w -1.6% j!_0Je6 lA g_1% -!,_,-qla N -9tr/6 !, :9?6 lr,-:_qJe6 ,Y...:g,f6 lf_ ,:0i1L E 0.0./6n O.Ot6N 0.096w o.o%w-o.2% N -0.3%rc-0.3%m-0.3%AL -0.2%e R -0.1% h -0.1% h -0.2% m -0.2% A -0.1% L^ -0.1% E 0.0% LA -0.1% 6 -0.2% N -0.1% M -0.3% vA -0.3% r rc -2.2% rc 0.096 re -0.1% w 0096 v^ ocl% j9_j9;a w -0.3% N -0.3% M -0.3% w -0.2% m 0%m -0.1%d -0.2%vA -0.2%vA -0.2%n -0.1%rc -0.1%6 0.0966 -0.1% N -0.2% w-0.2% w-0.3%B -0.3% 3l w -2.9n B -O.1%* -0.196E 0.e,6n -0.1%q -0.3%R -0.3%w -0.496w -0.3%rc -0.2%m l%,rc -0.2%N -0.2%*-a.?b^ -o.gxw -0.2%p -0.1%9_-0.1[* -o.rxA -0.2% M -0.2%la:!!Ln -o.gx pp -2. KS -0.2%B -0.2%q -0.1%E -O.l%M -0.3%w -0.3%m -0.4%N -0.3%K -0.3%d l% 4 -0.3% w -0.2% N -0.2% n -0.396 vA -0.2% E ,0.1% m -0.1% M -0.2% 6 -0.3% w -0.4% m -0.3% rc -0.2%rc -0.3%n -o.2%v -0.2%Ks -0.3%m -0.4%N -0.4%w -0.3%m -0.3%9 N -0.3% n -0.3% j1*:9!Ac -O.r% 6 -0.2% m -0.2% N -0.1% w -0.3% m -0.3% fr -0.4% A -0.3% -0.2% w -o. w -o.3% -0.3% re -0.3% KS -03X w -0.3% w -0.2% AK -0.1% vA -0.3% w -0.3% G -0.4% h -0.3% m -0.3% w -0. 3% Ks -0.4% H -0.4% N -0.3% s -0.2% A -0. -:o-,3I- 11,-.-:-0.3i" 11-:9,11. a-.:9lL I-:94r AK -0.3% u -0. q -O.3Yd aK -0.4% A -0.4% q -0.3% KS -0.2% A m -0.4% Ks -0.3% 6 -0.4% w -0.4% s-r..-.-_.".._-.9,s .P....:9,-1fr , .f .- ..:9,#. S...... ---0,,51, .15....:9,,-aF- rc -0.4% n -0.4% E -0.5% re -0.4% s Ks -5.96 u _ -o.s% l*_01!_ n -0.3% i!* -0.4% - -o.s% I N -0.5% M -0.4% rc -0.3% rc -0.5% E -0.5% u re -0.4% s -0.4% R -0.6% vr -0.4% E -6.2% B -0.41 *--:0.1e6 -6.3% I_--914 u :9.S,-9L:9$ 1a--1!!*i,,:9.!e6 F j!1_:9.sr6 f1_:9.qe6 R -0.6% E -0.5% E -O5% E -0.5% s -0.6% tr d -0.5% m -0.4% w -0.5% tr -0.4% L -0.6% rc -0.6% ru -0.6% ru -0.6% ru -0.6% w -0.5% vA -0.4% vr -0.6% M -0.5% 43 R -7,5% vr -0.6% u -0.5% M -0.6% rc -0.5% w -0.6% w -0.6% rc -0.7% AK -0.5% 6# -4.4y" .o.7* s -0. 9.596 N-O s L -11.396 N c -t.2% L -1.1% d -0.96 @ N .11, :?,Ift 1.5"'*"1fr. .t- .,:9,% o ! 'The first year is when the income was eamed. The second year is when the retum was filed. For example: the 98/99 column if for the 1998 tax year when the income was earned and 1 999 is when Source: lRS, Laffer Associates the income earner filed the tax return for 1998.