Democratic lawmakers today unveiled a new budget plan that would increase several taxes on small to midsize businesses as well as corporations.
The plan, which was introduced by the Democratic co-chairs of the Legislature’s appropriations and finance committees, would reduce the corporate tax credit from 70 percent to 65 percent and add a 30 percent surcharge on corporate tax profits.
The lawmakers also proposed a progressive income tax which boosts the current highest rate of 5 percent to 6 percent for couples earning above $250,000. The rate increases to 7 percent for couples earning more than $500,000; 7.5 percent for more than $750,000; and a top rate of 7.95 percent for more than $1 million.
The tax proposal is retroactive to Jan. 1.
Lawmakers did not propose a sales tax increase, but they are looking to add a tax on Internet sales.
“I recognize we will see criticism from every direction but we accept this,” said Sen. Toni Harp (D-New Haven).
The Democrats’ budget also maintains the offices of consumer counsel and health care advocate, both of which were targeted for elimination in Rell’s proposal.
Reader response:
“The Democrats proposal is absolutely ludicrous. While most every other business in the state is experiencing a decrease in revenue, we are all tightening our belts by reducing operating costs and unfortunately laying off some very good people. Knowing this, the Democrats propose a budget that increases our costs in lieu of reducing the number of State employees. This is the equivalent of raising prices to our customers to make up for our budget short fall. The Democrats need to think about how our customers would react to such an increase in these times – they would quickly find new suppliers. Well, if the Democrats’ proposal passes, the State of Connecticut will very quickly need to find new businesses to employ the significant number of layoffs and the mass exit of CT businesses that will result in response to the ridiculous increase in taxes!” — C. DiPentima, Pegasus Manufacturing
“How much more can these bloodsucking democrats take from us. I hope everybody is happy they voted for the tax and spend Dem’s now. They won’t be happy until they drive every business out of CT. We will eventually be an economy based totally on the Casinos, and welfare. Great vision for the future.” — Matt Kehl, ADP
“The Democrats’ plan is a great way to prevent business growth in Connecticut and will help drive existing business out of the state. Unbelievable.” — M. London, Michael J. London & Assoc.
“Senator Harp and her colleagues should take a lesson from business, and look for a way to increase her customer base, ie. tax-paying businesses, rather than ensure that they leave the state.” — B. Brooks, Brooks Acoustics Corp.
“This is completely irresponsible government. Has anyone taken the time to draw the short line from consumers’ pockets to corporate tax responsibilities? If the market won’t allow businesses to charge enough for goods and services to cover this increased cost of doing business, they will be forced to move or close and effectively dry up the well. Then the only thing left to tax will be the fees charged by moving companies on the mass exodus of citizens moving out of state to find work.” — T. Proietti
“This proposal is so short-sighted, I can’t believe it’s serious. If you want to save jobs than find another expense to cut. Do not increase taxes or you will at best postpone the ability of small and mid-size businesses to grow and hire. Worst case scenario is for business to move out of the state or simply close its doors. I don’t simply increase my rates to make up for a shortage in clients. I cut expenses. After all the hard work we have done as responsible business owners to reduce our costs and save as many jobs as possible, I am insulted that you think it’s a good idea to take the easy way out and raise taxes.” — M. Crean, Achieve Abundance
“”Since 1990, Connecticut has been loosing population particularly college graduates. For the past three years, an additional group has been added to this migration, people with young families. The reasons why people are leaving the State are varied but the consistent theme is this: there are better employment opportunities outside of the State especially for white collar jobs and there are better economic environments to start and maintain a business.
However, the Connecticut legislature (Democrats and Republicans) continue deny this reality and do absolutely nothing about it. This budget plan by the Democrats is a perfect example.
It seems that our legislature can only solve problems that involve using a a “knee jerk” reaction (i.e. Avon Mountain crash, parole board releasing violent convicts leading to the murders of the Petit family, etc…) with no thought to the actual causes of the problem and the unintended consequences of the solution.” S. Agnello
“Our Democrats in the legislation need only to look back in history – or take a basic Economics 101 class, to realize that higher taxation (and regulation) never stimulated the economy but had just the opposite effect. I find Senator Harp’s position that she does not believe the income tax will hurt businesses’ ability to retain and add jobs very short sighted. Not only it will hinder job growth, but it will have a negative trickle down effect on the rest of the state economy as less money is made available to be spent by both employers and employees. It is not surprising that Senator Harp never owned or ran a business. We need more business people in the legislation so that we can create a positive environment for long term economic growth, and not propose a solution that sells our car tires to put gas in the tank!” — G. Tomasi, RSL Fiber Systems LLC
“As a Democrat, I am concerned about the job losses that will be caused by the proposed Democratic budget.
Connecticut has lost 70,000 jobs in the past 12 months. 150,000 people are unemployed.
Our tax policy needs to be carefully crafted. For example, the details of a provision in the proposed budget, the repeal of the sales tax exemption for computer and data processing services, could have a devastating impact on Connecticut’s economy.
Connecticut’s Information Technology industry is already being affected by competition from other States and off-shore companies.
The State of Maryland has repealed their “Tech Tax,” because it was disastrous for their State’s economy. Democrats on the Federal level are lowering taxes, in order to pull America out of Recession.
I understand that budget issues in Connecticut are polarized along political lines. The natural competitiveness that evolves out of party politics can often lead to legislation that doesn’t serve the best interests of the constituents our legislators were elected to serve.
The people of Connecticut don’t care, nor will we remember who solves the problems we’re facing. We’re much more concerned that these problems are solved.
Now is the time to create jobs, not eliminate them.” — S. CherubinÂ
