Weicker Gets His Income Tax, But Citizens Fight It

STATE BUDGET WOES

SOME people pinned teabags to their clothes; others carried axes. One individual donned a skeleton outfit.What sounds like an early Halloween party was actually a crowd of more than 40,000 seething Connecticut citizens who converged on the State House lawn in Hartford Saturday, yelling, whistling, and demanding that Gov. Lowell Weicker repeal the state's first income tax. Between shouts of "Ax the Tax," and "Repeal, repeal," the riled group accused Governor Weicker, an independent, of stealing from the working class. The potpourri of people - black, white, blue-collar, and white-collar - booed him when he arrived at the capital. Teabag-wearers - signifying the colonists who protested the British tax on tea at the Boston Tea Party in 1773 - carried signs reading "Taxation without representation." The 4.5 percent income tax took effect Oct. 1. At the same time, the sales tax was lowered from 8 percent to 6 percent, but more items are taxed. The tax plan was passed in August to close Connecticut's burgeoning budget deficit and improve the state's economic picture. It came after months of legislative wrangling and a shutdown of the state government this summer after lawmakers and the governor could not agree on a tax and budget plan. People here believe the income tax is unfair for several reasons. They say the flat tax disproportionately affects the poor and middle class - groups they say are already reeling from the poor economy. Many people also claim Governor Weicker, who indicated he would not impose an income tax when he was elected in 1990, coerced other state politicians to vote for the tax. They further charge that he has given a tax break to himself and the rich by lowering the capital-gains tax. Weicker is heir to a pharmaceutical company; owns a farm in Greenwich, Conn.; and a vacation home in St. Croix. "Weicker is getting a huge tax deduction," spouts John Peter Bigos, a doctor from New London. At the same time, "he's driving the state into bankruptcy" because any revenues the tax is expected to generate will be canceled out as people stop spending money, move away, or lose jobs. Tom Scott, chairman of the Connecticut Taxpayers Committee, the group that organized the rally, says there is still too much waste in state government and contends spending can be reduced. He also says the state could sell bonds over a 15-year period to shrink the deficit. In 1971, the last time an income tax was approved in Connecticut, citizen furor forced a reversal of the vote before it took effect. The state sold bonds to reduce the deficit. Mr. Scott's group is demanding the appointment of a committee, which would include representatives from the Connecticut Taxpayers Committee, to find an alternative to the income tax. His group is also working to get the needed two-thirds of the state's politicians to sign petitions calling for a special session to repeal the tax. Proponents of the income tax say that tax is fairer than a sales tax, which hits those with lower incomes harder than the more affluent. It's also more consistent in generating revenue than a sales tax, which tends to fluctuate with the economy Nine other states have no income tax. The last state to enact one was New Jersey in 1976. Scott, a former state senator, admits efforts to repeal the tax face an uphill battle. But he says citizen anger is at an all-time high: "The public's in a mood to fight for these things. I've never seen the people of this state so animated." "If they are successful in getting this repealed, it will be a political victory of enormous proportions," says David Keating, executive vice president of the National Taxpayers Union in Washington, D.C. Sen. Margaret Morton, a Democrat from Bridgeport, has been a longtime supporter of an income tax. She voted for the current one, although she says she would have preferred a tax that is more geared to individual income. "People continue to talk about cutting spending. When you cut spending in the government you're cutting people, which in return are services to people," she says, adding: "We're the second wealthiest state in the country. We also have three of the poorest cities in the nation.... That's not the kind of state that can do without an income tax."