We’re writing to provide a snapshot of the new taxes and tax increases imposed by Gov. Dannel Malloy and majority lawmakers. These taxes, totaling a staggering $1.6 billion, take effect July 1. Some are retroactive. We strongly opposed this budget, which—believe it or not—increases government spending by more than $1 billion while creating a $560 million government surplus.
Here’s a summary of taxes that will affect you most:
INCOME TAX – The governor’s restructured tax bracket imposes a broader, deeper search for revenue that will hurt middle class families. A married couple (a police officer and a teacher, for example) who combined earn more than $100,500 and file their taxes jointly will see their annual taxes increase by roughly $300. And that increase is retroactive to Jan. 1, which will see state government take even more money from your paycheck between Aug. 1 and the end of the calendar year.
SALES TAXES – The tax you pay on everyday items, such as clothing, will increase from 6 percent to 6.35 percent. The governor increased the hotel tax by 3 percent to 15 percent, potentially curbing job growth in that already struggling industry. The governor said Connecticut “is open for business,” but high-end retail shops and the people who work for them will suffer when fewer customers walk through the door—an anticipated result of a new 7 percent tax on many expensive cars, boats and jewelry.
PROPERTY TAX INCREASES – Families under pressure from increasing property taxes once found comfort in the $500 property tax credit, but that’s about to change. The governor slashed the maximum credit by 40 percent, essentially imposing a $200 tax increase on folks who just can’t afford it. He reduced the number of people eligible for the credit, too. Gov. Malloy balanced his two-year budget by counting on $2 billion in unionized employee concessions—before employees actually agreed to givebacks. State employees recently rejected the concession deal, and the governor has warned he could cut state funding to cities and towns to help fill the gap. Consequently, local officials could increase your property taxes to balance their budgets.
CORPORATION TAX SURCHARGE – Connecticut has lost 100,000 private sector jobs, yet the governor doubled this surcharge on large employers to 20 percent. The state lost another 2,900 jobs in May, and analysts say Connecticut will be among the last states to see an improved job market. With policies like this, it’s no wonder.
OTHER TAXES – The governor taxed goods and services never taxed before—from yarn to non-prescription drugs. He increased the diesel fuel tax, and hiked taxes on beer and alcohol. A manicure will cost you more. Yoga classes, too. His budget increases estate and real estate taxes while imposing a tax on Web retailers, causing them to sever their partnerships with locally-based businesses owned our friends and neighbors.
We didn’t support this plan. Republicans offered an alternative that didn’t increase taxes while reducing government spending by $1.5 billion. Many taxpayers viewed our proposal favorably, but the governor and his colleagues ignored it.
These new taxes will create a less stable economic climate as families and businesses struggle to readjust their already tight budgets.
It’s time for the governor and majority legislators to adopt the “common sense” approach taxpayers use in their businesses and households.
We can do better, and we need to do better because Connecticut residents demand—and deserve—a leaner and less expensive government that won’t bust their budget.
State Rep. Tony Hwang
Rep. Tony Hwang represents the General Assembly’s 134th District covering parts of Trumbull and Fairfield. He is ranking member of the legislature’s Government Administration and Elections Committee and a member of Appropriations and Environment committees. He’s a founder of the bi-partisan Bioscience Caucus.
State Rep. T.R. Rowe
Rep. T.R. Rowe represents the 123rd General Assembly District covering Trumbull. He is co-chairman of the legislature’s Program Review and Investigations Committee and serves on the Regulations Review, Housing and Judiciary committees.