Policy Documents

Gov. Malloy’s Many Tax Hikes

February 22, 2011

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.
Current Sales Tax Exemptions Eliminated 

 

  1. Pet grooming services
  2. Automotive storage
  3. Boat services (docking, storage, cleaning, repair, tow)
  4. Packing & crating
  5. Car washes
  6. Automobile road and towing services
  7. Limousine services (with driver)
  8. Labor charges -repair of small aircraft
  9. Clothing and footwear under $50
  10. Non-prescription drugs
  11. Manicure and pedicure services
  12. Eliminate trade-ins exemption for auto vehicles
  13. Eliminate exemption for coupons, discounts, trade-ins
  14. Airport valet parking services
  15. Cosmetic surgery
  16. Haircuts
  17. Yoga Studios
  18. Cloth and fabric purchase for non-commercial sewing
  19. Hazardous waste removal
  20. Eliminate exemption for solid waste to energy facilities

 

Current Admissions & Dues Tax Exemptions Eliminated 

 

  1. Games of the New Britain Rock Cats, New Haven Ravens, or Waterbury Spirit;

Events at:

  1. Arena at Harbor Yard
  2. Bridgeport Harbor Yard Stadium
  3. Connecticut Convention Center
  4. Connecticut Exposition Center
  5. Dodd Stadium
  6. Hartford Civic Center
  7. Lime Rock Park
  8. Nature’s Art
  9. New Britain Beehive Stadium
  10. New Britain Stadium
  11. New Britain V eterans Memorial Stadium
  12. New Haven Coliseum
  13. Stafford Motor Speedway
  14. Tennis Foundation of Connecticut
  15. Thompson Speedway
  16. Waterford Speedbowl
  17. William A. O’Neill Convocation Center