The total gross state product for 2004 was $187 billion. The per capita income for 2005 was $47,819, ranking first among the states. There is, however, a great disparity in incomes through the state; although New Canaan has one of the highest per capita incomes in America, Hartford is one of the ten cities with the lowest per capita incomes in America (The low number may partially be due to the fact that the city, like other cities in the area, has a small footprint relative to a typical American city--only about 18 square miles--and therefore does not have more middle-income areas included in its total to "balance out", statistically, inner areas with older housing stock and a poorer population). Should Hartford (or similar cities New Haven and Bridgeport) be combined with its immediate suburbs, it would rank as one of the richest cities in the country. Fairfield County has become a bedroom community for higher-paid New York City workers seeking a less urban lifestyle. This in turn has attracted businesses wishing to remain near New York City to southwestern Connecticut, most notably to Stamford.

New Canaan is the wealthiest town in Connecticut, with a per capita income of $85,459. Darien, Greenwich, Stamford, Weston, Woodbridge, Westport and Wilton also have per capita incomes over $65,000. Hartford is the poorest city in Connecticut, with a per capita income of $13,428. There are other lower-income and blue-collar towns, mostly parts of towns, in the eastern part of the State. Poor and medium wealth households are particularly affected by a very high cost of living, due to a combination of expensive real estate, expensive heating for the winters, and other factors.

Taxation

Prior to 1991, Connecticut had a highly populist income tax system. Income from employment was untaxed, but income from investments was taxed at the highest rate in the United States: 13%. And this burden was further increased by the method of calculation: no deductions were allowed for the cost of producing the investment income. Under Governor Lowell P. Weicker, Jr., an Independent, this was reformed to the present system.

This system prior to 1991 made it an attractive haven for high-salaried earners fleeing the heavy taxes of New York State, but highly unattractive for members of Wall Street partnerships. It put an enormous burden on Connecticut property tax payers, particularly in the cities with their more extensive municipal services. As a result, the middle class largely fled the urban areas for the suburbs, taking stores and other tax-paying businesses with them, leaving mostly the urban poor in the older, central areas of Connecticut cities.

With Weicker's 1991 tax reform, the tax on employment and investment income was equalized at a then-maximum of 4%. Since then, Greenwich, Connecticut, has become the headquarters of choice for a large number of America's largest hedge funds, and Connecticut income from that industry has soared. Today the income tax rate on Connecticut individuals is divided into two tax brackets of 3% and 5%. All wages of a Connecticut resident are subject to the state's income tax, even when the resident works outside of the state. However, in those cases, Connecticut income tax must be withheld only to the extent the Connecticut tax exceeds the amount withheld by the other jurisdiction. Since New York state has higher tax rates than Connecticut, this effectively means that Connecticut residents that work in New York state pay no income tax to Connecticut.

Connecticut levies a 6% state sales tax on the retail sale, lease, or rental of most goods. Some items and services in general are not subject to sales and use taxes unless specifically enumerated as taxable by statute. There are no additional sales taxes imposed by local jurisdictions. During the summer there is one week of duty free buying to spur retail sales.

All real and personal property located within the state of Connecticut is taxable unless specifically exempted by statute. All assessments are at 70% of fair market value. Another 20% of the value may be taxed by the local government though. The maximum property tax credit is $500 per return and any excess may not be refunded or carried forward. Connecticut does not levy an intangible personal property tax.

Real estate

Homes in southwestern Connecticut on the fringes of the New York City metropolitan area are quite expensive. Many towns have median home prices over $500,000, with some more desirable homes exceeding $1 million. Greenwich has the most expensive real estate market, with most houses selling at over $1 million and most condos selling at over $600,000. Connecticut has the most million-dollar homes in the northeast, and the second most in the nation after California, with 3.3% of homes in Connecticut priced over one million dollars in 2003. In 2007, the median price for a house in Connecticut passed $300,000 for the first time, even though most of the country was mired in a real estate slump.

Industries

The agricultural output for the state is nursery stock, eggs, dairy products, cattle, and tobacco. Its industrial outputs are transportation equipment (especially helicopters, aircraft parts, and nuclear submarines), heavy industrial machinery and electrical equipment, military weaponry and fabricated metal products, chemical and pharmaceutical products, and scientific instruments.

Due to the prominence of the aircraft industry in the state, Connecticut has an official state aircraft, the F4U Corsair, and an official Connecticut Aviation Pioneer, Igor Sikorsky. The state officially recognizes aircraft designer Gustav Whitehead as "Father of Connecticut Aviation" for his research into powered flight in Bridgeport, Connecticut in 1901, two years before the Wright brothers at Kitty Hawk, North Carolina. Governor John Dempsey also declared August 15 to be "Gustave Whitehead Day."

A report issued by the Connecticut Commission on Culture & Tourism on December 7, 2006 demonstrated that the economic impact of the arts, film, history and tourism generated more than $14 billion in economic activity and 170,000 jobs annually. This provides $9 billion in personal income for Connecticut residents and $1.7 billion in state and local revenue.