When Connecticut lawmakers consider plans to raise taxes on businesses, they should consider the plight of Pamela and Ralph Buckwold.
The couple owned one of 3,475 state businesses that closed in the first quarter of 2009. The Buckwolds owned a real estate development firm in Manchester that was brought down by a slow housing market and high costs of commodities.
In fact, a record number of Connecticut businesses closed their doors during the first quarter of 2009, while the number of new business starts in the state reached their lowest levels in nearly a decade.
Against that backdrop, proposals to raise business taxes would be a mistake.
Democrats’ proposals to increase income taxes and eliminate dozens of sales tax exemptions would hit businesses at a time when so many are struggling to survive.
Many Connecticut businesses pay a significant portion of the state’s income tax since they are set up as pass-through entities, which means they pay personal income tax on the income generated by their businesses.
Other proposed tax increases include a three-year 30 percent surcharge on corporate earnings and a reduction in the corporate tax credit from 70 percent to 65 percent in 2009 and to 50 percent in 2010.
With news of a record number of business stops, lawmakers should find ways to close the state budget deficit without making a historically bad situation worse.
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