HARTFORD – House Republican Leader state Rep. Lawrence F. Cafero Jr., today said the Democratic budget sets a record for tax increases that will kill some industries, crush hard working wage earners and creates a $1 billion surplus on the backs of the middle class. The Republican alternative budget offered and rejected by Democrats has no new taxes, is balanced through spending cuts and would create a leaner state government. The Democratic budget is also $2 billion out of balance because union concessions counted on by the governor have not materialized yet.
“Today Connecticut has a clear view of how Democrats deal with our fiscal crisis: raise massive amounts of taxes, on income, property sales and businesses, and continue to spend to support bigger government. Republicans showed we can close our deficit without raising a nickel in new taxes on anyone,’’ Cafero said. “It is a sad commentary on how we do business at the Capitol.’’
The Democratic budget raises $1.8 billion in new taxes that will be felt at the gas pump on checkout lines, in boat marinas and next April when taxpayers give more of their wages to state government. In between, property tax bills will go up because the Democrats cut by 40 percent the property tax exemption.
The cost so doing business will also escalate because the corporate surcharge on companies was doubled from 10 to 20 percent. And businesses, which account for more than half of all sales taxes in business-to-business transactions, will be forced to pass those costs on to consumers, Cafero said.
He pointed out the trucking industry gets clobbered with this budget because diesel fuel taxes are increased by 3 cents and Democrats refused to cap the gross receipts tax on gasoline as Republicans proposed. “Gas prices will continue to escalate and commuters and truckers who move freight around will pay more,’’ Cafero said. “Then consumers will pay more for those products.’’
The budget is so ill-conceived, Cafero said, that it builds a $1 billion surplus by raising taxes. “That is like taking out a loan and putting the money in a savings account. It makes no sense,’’ Cafero said. The Governor’s own Revenue Services Commissioner has already said that the so-called Amazon Internet Tax is “uncollectable’’ and that taxes on plastic surgery would also not be workable.
Those who do not make enough money to pay taxes to Connecticut will receive an Earned Income Tax Credit. “If you don’t pay any taxes under this budget you do pretty well,’’ Cafero said. He also noted that cigarette taxes go up 40 cents and smoking cessation products will now also be taxed. “Go figure,’’ Cafero said.
The sales tax will be raised from 6 percent to 6.35 percent on items already taxed to raise $138 million in the first year of the budget.
Other additional taxes that were raised:
• Luxury taxes on goods such as jewelry, cars and boats. Wedding dresses over $1,000 will cost more this summer;
• Rental car surcharges of 3 percent;
• Yoga instruction;
• Cigarette taxes go from $3 to $3.40 per pack;
• Selling a house will cost more beginning July 1 with the increase in the conveyance tax of .25 percent;
• A person earning $50,000 will have income taxes raised by 10 percent.
Seeing a baseball game at New Britain Stadium this summer or a car race at Lyme Rock Park will also cost 10 percent more because admission tax benefit have been eliminated under the budget.
Aside from all the tax increases, numerous breaks and credits were eliminated and scores of higher motor vehicle fees will be implemented.