Rep. Rep. Tony Hwang (R-134) today said the Democratic budget that sets a record for tax increases of $1.8 billion will harm some industries, punish hard working wage earners and creates a $1 billion surplus on the backs of the middle class, voting against the largest tax increase in history.
The Republican alternative budget 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.
Budget debate began at 2 p.m. in the House May 3rd, following the overnight vote of approval in the Senate.
“We should be taking a road that leads to a transparent and more equitable vision of ‘shared sacrifice’,” said Rep. Tony Hwang. “Now, I appreciate and support the often mentioned statement of maintaining the “safety net” is important, particularly for our most vulnerable citizens. But we must remember to BALANCE that goal against the interest of our hard working middle class. Our middle class taxpayers are walking on a tightrope that narrows with each tax increase. We have a responsibility to ensure that we do not tax them so much that we force their fall into the safety net and suffer loss of their economic security.”
The Democratic budget raises $1.8 billion in new taxes that will be felt in purchasing clothes, on grocery checkout lines, in car dealerships 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.
Republicans offered several amendments which were defeated on party-line votes. One would have capped the gross receipts tax on gasoline, preventing the escalating price of gasoline from causing excessive taxation.
Hwang noted that the cost of 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.
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.
Aside from all the tax increases, numerous breaks and credits were eliminated and scores of higher motor vehicle fees will be implemented.