Tax hikes now in open discussion at State Capitol

State Capitol in Hartford (WTNH / Tom Parent)

Hartford, Conn. (WTNH)– Facing a $3.5 billion red ink problem over the next two years, more severe cuts in spending and thousands of potential layoffs, a key legislative committee is turning to more tax hikes.

In the ‘nickel and dime you to death’ department, the proposal would increase the current 6.35 percent sales tax to 6.99 percent.  

On a $50 purchase, that would be a tax hike of about 32 cents.

But believe it or not, this ‘nickel and dime’ tax hike would raise about $450 million for the state. It’s a tax hike that would affect everyone–rich or poor.

The other big proposed tax hike would not affect most people. It’s a hike in the income tax on high wage earners. People that make high six and seven figure salaries. The rate would go from the current 6.99 percent to 7.49 percent. The tax-writing Finance Committee will consider these hikes in a public hearing next week.

Hamden freshman State Rep. Josh Elliot is on the committee. He’s been described as a Bernie Sanders Democrat and dismisses the notion that Connecticut’s previous two tax hikes are driving the wealthy out.  “We’re still number one per capita income,” says Elliot,  “We’ve gone from fourth most to second most millionaires per capita. So we’re actually getting wealthier in the face of these tax increases.”

The Republican leader in the House, Rep. Themis Klarides (R-Derby), expressed a view echoed by most in her party. That this is a rewind of the 2011 and 2015 tax hikes, which were the highest in state history adding: “The Democrats are not understanding that it didn’t work then, it’s not going to work now. In fact we’re now facing a $3.5 billion dollar deficit after the two highest tax increases.”

So far Governor Malloy appears to be closer to the Republicans on this saying,  “Too much thought is going into ‘how to raise additional money’ and too little thought going into’how do we live within our approximate means.”

These tax plans also include eliminating the ‘Sales Tax’ exemption for non profit agencies.  That would mean food pantries and homeless shelter would have to start paying the ‘Sales Tax’ on all their supplies.

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