Senate Bill No. 1239 (SB1239) was approved on May 4, 2011, increasing taxes largely on the middle class residents in Connecticut. My question to Governor Dannel Malloy is, why did you place the burden of its revenue raising provisions on middle class citizens of Connecticut?
Thank, God, Governor Dannel Malloy is a Democrat. Can you imagine the regressivity of the tax bill if Malloy had been a Republican?! Perhaps Malloy, like President Barack Obama and former President Bill Clinton, doesn’t know he’s a Democrat. Can campaign contributions dictate the fiscal policies of our elected official? Perish the thought.
How could Governor Dannel Malloy’s tax bill have been truly progressive and representative of middle class residents of Connecticut? I will review the current tax changes and include my belated proposals.
First, let’s look at the changes in Connecticut’s income tax rate. Dan Malloy is increasing the income tax rate on all Connecticut taxpayers whose adjusted gross income (total revenues less adjustments to income—itemized deductions are not subtracted from Connecticut taxable income) exceeds $50,000 for those filing single, $80,00 for those filing head of household, and $100,000 for those filing jointly. Consequently, the majority of the middle class residents are having their Connecticut income taxes increased by 10% to 30% depending on their adjusted gross income: this bill certainly imposes an additional and unnecessary hardship on the Connecticut middle class. However, the rich in Connecticut—those whose Adjusted Gross Income exceeds $500,000 for those filing single and $1,000,000 for those filing jointly—only have a 3%, and not a 10% to 30%, increase in their tax rates! Is this equitable? Is this sharing the pain? Is this a progressive tax bill?
Suppose you report $100,001 in adjusted gross income. What impact will Malloy’s tax bill have on your Connecticut income taxes? You will pay an additional $1,000 in Connecticut income taxes under its new income tax rates. Nice, huh? Does this hurt your wallet?
And if you report $200,001 in adjusted gross income, you will pay an additional $3,000 in Connecticut income taxes under its new income tax rates. Ouch!
But if you report $500,001 in adjusted gross income, you will pay only an additional $1,000 in Connecticut income taxes under its new income tax rates! So the individual reporting $300,000 less in taxable income is paying $2,000 more in additional taxes under the new state income tax rates than the individual in the upper income bracket?! Where is the progressivity in the tax rates on the rich? Shouldn’t they be paying even more under a progressive tax structure?
Why are not those percentages of increase in the Connecticut income tax rates reversed for those income thresholds? Why are not the rich seeing an increase of 10% to 30% instead of a mere 3% increase? And why are not the middle class Connecticut residents getting a mere 3% increase, if any, in their tax rates? Could it be because Dannel Malloy has his roots in Stamford, Connecticut in Fairfield County, the richest county in Connecticut? Could it be that Governor Dannel Malloy is a Democrat in sheep’s clothing? Isn’t this more trickle down nonsense of the Republicans, claiming by being soft on the rich, that wealth will trickle down and jobs will be created here instead of China and India? Do you still believe in this Republican voodoo economics after the greatest transfer of wealth to the upper class over the past thirty years?!
In addition, Dan Malloy’s tax bill will have a significant impact on lower and middle class residents by reducing the Connecticut property tax credit from $500 to $300. So there alone is $200 more in taxes for the majority of Connecticut residents. That’s regressive as well. But there many other regressive provisions in Dan Malloy’s tax bill.
The overall sales tax rate, a tax that takes a larger percentage of disposable income from the lower and middle classes than from the upper class, is increasing another 5.83%, up from 6% to 6.35%. In addition, the sales tax exemptions on sales of clothing less than $50 in amount and sales of non-prescription drugs and medicine are being eliminated. Moreover, alcoholic beverage taxes are increasing on average 20% and cigarette taxes 13.3%, while there’s an additional 3% cabaret tax admissions, food, drink, service, and merchandise at any place offering live music, dancing, or other entertainment for profit in addition to serving alcoholic drinks. There are too many increases in taxes and fees targeting the Connecticut middle class too numberous to itemize here, but they are targeting the lower and middle classes in Connecticut.
If Governor Dannel Malloy were an elected official representing the economic interests of Connecticut’s lower and middle classes, he would not have proposed any increases in income tax rates on couples with adjusted gross incomes of less than $250,000, nor increases in sales taxes, alcohol taxes, cigarette and tobacco taxes, fees, conveyance taxes, and the like, but instead would have progressively increased the income tax rates on adjusted gross incomes exceeding $250,000, but especially on those above $500,000! That approach would have been in the best interests of Connecticut lower- and middle-class residents.
So why has a Democratic Governor, why has Dannel Malloy, proposed and signed a regressive tax bill burdening the Connecticut middle class? Is Malloy following the political centrist paths of Barack Obama and Bill Clinton? These two clever politicians have been very successful inching themselves to the political right as the Republicans continue their Shermanesque march to the precipice of the political extreme right, shifting the center of the political fulcrum like two birds of paradise performing their rhythmic and instinctive mating dance. Have you noticed yet that it’s always the middle class getting screwed at the end of their dance? My deep-gut suspicion is that Dannel (blue blood variant of Daniel?) Malloy has further political aspirations, perhaps for the Presidency or the Vice-Presidency, and he believes that such positioning will serve him well in the future.
Hopefully the middle class of Connecticut will realize the regressiveness of his tax bill and not only not re-elect him in the future but voice their opposition to his policies and political aspirations to middle class taxpayers outside of Connecticut.