Connecticut, It's Time to Get Competitive on Taxes
- 9 hours ago
- 1 min read
The Tax Foundation just released its 2026 State Tax Competitiveness Index, a tool that enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare across the country.
The Index evaluates each state on more than 150 variables across five major areas of taxation: corporate, individual income, sales and excise, property and wealth, and unemployment insurance. These metrics are then combined to yield a final, overall ranking.
Overall, Connecticut ranks 47th. As the Tax Foundation summarized, Connecticut's tax code makes it less attractive for large corporations, homeowners, and high-net-worth individuals.
The only states ranking lower in the overall score than Connecticut are California (48th), New Jersey (49th), and New York (50th). Meanwhile, the most tax-competitive states are Wyoming (#1), South Dakota (#2), New Hampshire (#3), Alaska (#4), and Florida (#5).
The Breakdown: Where Connecticut Stands
Sales Taxes: 18th (Our best showing—though New Hampshire takes the top spot)
Corporate Taxes: 30th (The worst is Delaware)
Unemployment Insurance Taxes: 39th (The worst is Alaska)
Individual Income Taxes: 46th (The worst are NY, CA, and NJ)
Property Taxes: 49th (The worst is Vermont)
No Progress in Six Years
Connecticut's overall ranking has remained stagnant for six years. Meanwhile, neighbors like New Hampshire (which has no income tax) managed to jump from 6th place in 2025 to 3rd place in 2026 by eliminating its interest and dividends tax.
Between the Lines: As Benjamin Franklin wrote shortly after the U.S. Constitution was established, "In this world nothing can be said to be certain, except death and taxes." For Connecticut residents, our taxes just happen to be more certain—and more expensive.