Dear Legislator:
Onbehalf of the National Taxpayers Union’s more than 4,600 members in Connecticut,I strongly urge you to reject Governor Malloy’s plan to raise taxes by $3billion. If enacted, these tax hikes would hurt the state’s chances of a swifteconomic recovery and seriously harm the state’s attractiveness as a place todo business.
Aspart of his budget, Governor Malloy proposes to increase taxes on individualswho make more than $50,000, raise the top income tax rate from 6.5 to 6.7percent, and increase the number of income brackets from three to eight.Additionally, the Governor wants to raise the state sales tax from 6 to 6.25percent and to 6.35 percent locally, extend the corporate profits tax, lowerthe exemption for the death tax, increase the cigarette tax by 40 cents perpack, hike the gas tax by three cents per gallon, raise the alcohol tax by 20percent, increase the hotel tax by two percent, and raise many fees on thingssuch as driver’s licenses. In all, the Governor proposes to raise rates in 25different categories of taxes, according to an analysis by the non-partisanYankee Institute for Public Policy.
Even under its current laws, Connecticut is hardly a low-taxstate. In fact, Connecticut has the third- highest state and local tax burden,according to the Tax Foundation. To highlight but a few of the numbers behindthis dubious distinction, the state also has one of the worst business taxclimates in the nation, the thirteenth-highest general sales tax rate, and thenation’s second-highest cigarette tax rate. Meanwhile, spending per householdin Connecticut has grown from $4,400 in 1980 to more than $10,000 today, anincrease of 227 percent – far faster than inflation or population growth.Clearly, Connecticut’s budget woes are not the result of a revenue problem, buta spending problem.
Proponents claim that these taxhikes are the least painful options to address the state’s $3 billion budgetdeficit, but the reality is that they will do serious damage to the state’seconomy. Connecticut’s median household income has remained relatively flat foryears and unemployment is hovering at 8.6 percent, more than three percenthigher than it was just three years ago. Raising the income tax would hurthard-working families who are struggling to pay bills. Similarly, increases inthe sales tax will discourage consumers from shopping, which will harm retailerswho have endured a sluggish economy. Higher gasoline, alcohol, and hotel taxescertainly won’t encourage travel to Connecticut, just as the summer touristseason begins. Moreover, tobacco taxes are unreliable sources of revenue,disproportionately burden the poor (who are more likely to smoke), and hitsmall retailers such as convenience stores who count as cigarettes and othertobacco products for as much as a third of sales.
Connecticut faces serious budget challenges, but the answerto those challenges is to reduce spending; not raise taxes. Therefore, our members hope you willoppose the Governor’s tax hikes.
Sincerely,
JohnStephenson
StateGovernment Affairs Manager