Connecticut budget – Spend more, tax more … maybe some cuts
The State of Connecticut’s leaders feel it is appropriate to spend even more money during the next couple of years. No cuts at all. The budget Gov. Dannel Malloy (D) proposed increased spending almost 2 percent and 2.4 percent over the next two years. Sure, they are going to try to get state employees to give $2 billion up …
It’s disturbing the governor wants to increase the budget during the next two years, but Connecticut voters get what they vote for. Sure, you’ll hear about the supposed $2 billion in give-backs the governor is demanding and that will make big news, but the real news is government is getting bigger and spending more in Connecticut … even if the governor gets all $2 billion in cuts he’s asking for.
By the way … those $2 billion in give-backs? They don’t exist … it’s vapor-cuts, totally undefined. Why the detailed tax increases but not one detail on cuts?
The budget increase – more spending than last year – is clear. Almost 2 percent next year. The proposed tax increases are clear too. From the Yankee Institute, who have listed out the expanded list of tax increases proposed for Connecticut.
Exit question: Which tax listed below will help improve the economic situation in Connecticut? It’s been proven that local, state and federal governments will spend every single dime they raise in taxes, plus millions, billions or yes even trillions more.
- Income tax: Increases income taxes on individuals making more than $50,000 a year and couples making more than $100,000 a year; increases the highest income tax rate from 6.5 to 6.7 percent; eliminates the 3% bracket on an individual’s first $10,000 in earnings and a couple’s first $20,000 for those making more than $56,500 and $100,500, respectively; expands the number of brackets from 3 to 8.
- Sales tax increase: Increases the state sales tax from 6 percent to 6.25 percent and to 6.35 percent at retail locations.
- Sales tax expansion: Applies the sales tax to now-exempt items such as hair cuts, car washes, and clothing and footwear that costs less than $50.
- Eliminates Sales Tax Free Week
- Property tax credit elimination: Eliminates the existing $500 property tax credit for the middle class.
- Cigarette tax: Raises taxes on cigarettes by 40 cents a pack, from $3.00 to $3.40; increase tax on snuff from 40 cents to $1 per ounce; increases tax on other tobacco products from 20% to 50% of wholesale price
- Alcohol tax: Raises taxes on alcohol by 20 percent (tax on distilled spirits goes from $4.50 a gallon to $5.40; tax on beer goes from 20 cents a gallon to 24 cents; tax on wine goes from 60 cents a gallon to 72 cents)
- Gas tax: Increases the state gas tax from 25 cents a gallon to 28 cents a gallon; and diesel fuel from 26 to 28 cents a gallon.
- Earned Income Tax Credit: Increases state spending by more than $100 million though a new, negative income tax of up to $1,700 for low income households that earn less than about $21,500 a year from their jobs.
- Death Tax: Lowers the estate tax exemption from $3.5 million to $2 million, making more of an estate subject to the estate tax, which starts at 7.2% and rises to 12%, over and above the federal death tax.
- Hotel tax: Increases the sales tax on hotel stays from 12 percent to 15 percent.
- Corporate tax: Extends a 10 percent corporate profits tax surcharge on large businesses for two more years (beware those “temporary” tax increases…); establishes “throw back” rule expanding their income subject to state taxation.
- Luxury sales tax: Applies an additional luxury sales tax of 3 percent on clothing over $1,000, jewelry over $5,000, vehicles over $50,000, and boats over $100,000.
- Driver’s license: Increases the driver’s license tax from $66 to $72, good for 6 years ($1 a year increase).
- Car registration tax: Rises from $75 to $80 biennially.
- Care rental tax: Rises from 8 percent to 9 percent.
- Insurance premiums tax: Increases the insurance premium tax from 1.75% to 1.95%.
- Health facilities: Raises taxes on hospitals, nursing homes, and intermediate care facilities for the mentally retarded, in an effort designed to trigger federal reimbursements.
- Energy tax: Establishes a new tax of 2/10ths of a cent per kilowatt on electricity generated in Connecticut, with a special interest exemption for favored “green” energy producers. (Editor’s note: A reason to oppose the creation of new taxes of any kind is that they are often increased or expanded in future years. Example: state income tax.)
- Real estate conveyance tax: Makes permanent a .25% real estate tax and expands an optional conveyance tax.
- Cabaret tax: Creates a new cabaret tax of 3%.
- Admissions & Dues Tax: Eliminates exemptions from the 10% tax on admissions to certain places of “amusement, entertainment, or recreation” (eg, New Britain Rock Cats home games, events at the Hartford Civic Center).
- Boat tax: Taxes boats at a statewide rate of 20 mills.
- Airplane tax: Taxes airplanes at a statewide rate of 20 mills.
- Film Tax Credit: Decreases tax credit transferability to 50%, then 25%, against the corporate tax.
Sales Tax Exemptions Eliminated…
- Pet grooming services
- Automotive storage
- Boat services (docking, storage, cleaning, repair, tow)
- Packing & crating
- Car washes
- Automobile road and towing services
- Limousine services (with driver)
- Labor charges -repair of small aircraft
- Clothing and footwear under $50
- Non-prescription drugs
- Manicure and pedicure services
- Eliminate trade-ins exemption for auto vehicles
- Eliminate exemption for coupons, discounts, trade-ins
- Airport valet parking services
- Cosmetic surgery
- Yoga Studios
- Cloth and fabric purchase for non-commercial sewing
- Hazardous waste removal
- Eliminate exemption for solid waste to energy facilities
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