Top 1 Percent Took Greatest Share of Income Gains
Over the last three decades, Connecticut has changed from being one of the most egalitarian
states to being one of the most unequal, according to a new report, “Pulling Apart: Connecticut
Income Inequality 1977 to Present,” by the Connecticut Association for Human Services (CAHS)
and Connecticut Voices for Children.
Over this period, Connecticut experienced the greatest increase in income inequality among all
states between its high and low-income households. In 1977-79, the gap between the richest
fifth and the middle fifth of families in Connecticut was relatively low, ranking 42nd among all
states, but the state ranked 7th highest in inequality by 2005-07. Similarly, the gap between the
richest and poorest fifth of households is now the 3rd worst in the country, up from 46th.
“Hard work should pay off for all Connecticut residents, whether they are working-, middle-, or
upper-class,” said Wade Gibson, Senior Policy Fellow at Connecticut Voices for Children. “But
economic gains have flowed disproportionately to the richest households. Growing inequality is
bad for families and our economic future.”
“This increasing divide shows that we need to redouble our efforts to ensure economic success is
within reach for working families,” said James Horan, Executive Director of the Connecticut
Association for Human Services. “The latest research on the impact of inequality is very
troubling. Our economy won’t truly rebound without shared prosperity, and we just don’t have
the policy framework in place.”
The Connecticut report analyzes trends in state and federal income tax returns, along with wage
and inequality data from the U.S. Census. It also includes new data on historical household
incomes released today in a national report by the Center on Budget and Policy Priorities and
Economic Policy Institute.
Among the Connecticut Voices and CAHS report findings:
*The greatest share of income gains have gone to the wealthiest 1 percent, who have vastly
outpaced even the very well-off. The share of total state Adjusted Gross Income (AGI)
going to the top 1 percent has soared over the last two decades, increasing from 17% to
*The 99th percentile of taxpayers in Connecticut earn about $766,000 in state AGI, over
$500,000 more than the $225,000 earned by well-off households at the 95th percentile.
The income of the near-rich is actually closer to that of the poorest fifth of households,
who earn $17,000, than it is to the $766,000 earned by the wealthiest Connecticut
* Connecticut’s inequality ranks second only to New York’s among U.S. states on the Gini
coefficient, one of the most widely used measures of inequality.
“This deep inequality threatens dire outcomes not just for those left behind, but for all of us,”
said CAHS Policy Director Liz Dupont-Diehl. “It it calls into doubt our idea that anyone can
work hard and reach the middle class. Plenty of people are working hard and still can’t educate
their children or send them to college – or provide for their families or build the American
While recognizing that inequality originates largely from forces outside state policymakers’
control, the report recommends state policies to limit the damaging impact of these trends,
*Raising and indexing the minimum wage to inflation,
*Shoring up the unemployment insurance compensation trust fund,
*Making the state and local tax code less regressive by reducing reliance on property and sales taxes,
which hit low-income households particularly hard, compared to progressive income taxes, and
*Strengthening programs that preserve and expand opportunity, such as the state earned income tax
credit and support for higher education.
Founded in 1910, the Connecticut Association for Human Services promotes family economic security strategies that empower low-income working families to achieve financial independence
Connecticut Voices for Children is a research-based policy think tank that
works to advance policies that benefit the state’s children, youth and families .