Gov. Malloy’s Many Tax Hikes

Gov. Malloy’s Proposed Tax Increases

Gov. Malloy has proposed dozens of tax increases across 25 categories of taxes. This is a conservative count; we aren’t counting each separate expansion of the sales tax as a separate tax hike, though of course they are.

1. Income tax: Increases income taxes on individuals making more than $50,000 a year and couples making more than $100,000 a year; increases the highest income tax rate from 6.5 to 6.7 percent; eliminates the 3% bracket on an individual’s first $10,000 in earnings and a couple’s first $20,000 for those making more than $56,500 and $100,500, respectively; expands the number of brackets from 3 to 8.
2. Sales tax increase: Increases the state sales tax from 6 percent to 6.25 percent and to 6.35 percent at retail locations.
3. Sales tax expansion: Applies the sales tax to now-exempt items such as hair cuts, car washes, and clothing and footwear that costs less than $50.
4. Eliminates Sales Tax Free Week
5. Property tax credit elimination: Eliminates the existing $500 property tax credit for the middle class.
6. Cigarette tax: Raises taxes on cigarettes by 40 cents a pack, from $3.00 to $3.40; increase tax on snuff from 40 cents to $1 per ounce; increases tax on other tobacco products from 20% to 50% of wholesale price
7. Alcohol tax: Raises taxes on alcohol by 20 percent (tax on distilled spirits goes from $4.50 a gallon to $5.40; tax on beer goes from 20 cents a gallon to 24 cents; tax on wine goes from 60 cents a gallon to 72 cents)
8. Gas tax: Increases the state gas tax from 25 cents a gallon to 28 cents a gallon; and diesel fuel from 26 to 28 cents a gallon.
9. Earned Income Tax Credit: Increases state spending by more than $100 million though a new, negative income tax of up to $1,700 for low income households that earn less than about $21,500 a year from their jobs.
10. Death Tax: Lowers the estate tax exemption from $3.5 million to $2 million, making more of an estate subject to the estate tax, which starts at 7.2% and rises to 12%, over and above the federal death tax.
11. Hotel tax: Increases the sales tax on hotel stays from 12 percent to 15 percent.
12. Corporate tax: Extends a 10 percent corporate profits tax surcharge on large businesses for two more years (beware those “temporary” tax increases…); establishes “throw back” rule expanding their income subject to state taxation.
13. Luxury sales tax: Applies an additional luxury sales tax of 3 percent on clothing over $1,000, jewelry over $5,000, vehicles over $50,000, and boats over $100,000.
14. Driver’s license: Increases the driver’s license tax from $66 to $72, good for 6 years ($1 a year increase).
15. Car registration tax: Rises from $75 to $80 biennially.
16. Car rental tax: Rises from 8 percent to 9 percent.
17. Insurance premiums tax: Increases the insurance premium tax from 1.75% to 1.95%.
18. Health facilities: Raises taxes on hospitals, nursing homes, and intermediate care facilities for the mentally retarded, in an effort designed to trigger federal reimbursements.
19. Energy tax: Establishes a new tax of 2/10ths of a cent per kilowatt on electricity generated in Connecticut, with a special interest exemption for favored “green” energy producers. (Editor’s note: A reason to oppose the creation of new taxes of any kind is that they are often increased or expanded in future years. Example: state income tax.)
20. Real estate conveyance tax: Makes permanent a .25% real estate tax and expands an optional conveyance tax.
21. Cabaret tax: Creates a new cabaret tax of 3%.
22. Admissions & Dues Tax: Eliminates exemptions from the 10% tax on admissions to certain places of “amusement, entertainment, or recreation” (eg, New Britain Rock Cats home games, events at the Hartford Civic Center).
23. Boat tax: Taxes boats at a statewide rate of 20 mills.
24. Airplane tax: Taxes airplanes at a statewide rate of 20 mills.
25. Film Tax Credit: Decreases tax credit transferability to 50%, then 25%, against the corporate tax.