Candelora: Malloy's Tax Package Will Slow State's Economic Recovery

I'd like to provide a summary of some of the tax increases that will affect residents in Gov. Malloy's budget. I believe this tax package will slow any economic recovery in Connecticut and certainly places an undue burden on our middle class. To be clear, I did not support it, nor did I vote for it. This summary does not highlight business tax increases, which also took a dramatic hit. You can visit, http://www.cga.ct.gov/2011/BA/2011SB-01239-R01-BA.htm, for a detailed summary of all of the tax increases.

On July 1, Connecticut will see new taxes or tax increases in a host of areas. Residents will feel a slight sales tax increase from 6% to 6.35%. However, many items that were traditionally tax exempt will no longer be. Clothing and footwear; non-prescription drugs and medicine such as vitamins and cough drops; smoking cessation products; hazardous waste removal; valet parking; yoga classes; and cloth, fabric and yarn will all now be taxed. Services that will be subject to new sales tax include motor vehicle storage such as storage for motor homes, campers, and camp trailers. Other new taxed services include motor vehicle towing and road services; packaging and crating; limousine transportation; scheduled public transportation and funerals; pet grooming, boarding and obedience classes; manicures and pedicures; cosmetic surgery; and spa services such as body waxing and wraps, peels, scrubs, and facials will all be taxed.

Businesses in particular should take note of these changes. I fear that many may not realize they're subject to new taxes and will fail to collect, involving penalties.

Alcoholic beverages will see a 20% increase just in time for 4th of July. The budget adds surcharges of 3% to short term car rentals. Cover charges on events will go up by 10% . Our property tax credit was reduced from $500 to $300. What's more, as if electric rates aren't high enough, Connecticut has increased taxes on electricity.

Marginal state income tax rates are also going up and this tax is retroactive to January 1. Therefore, in August, employers will need to withhold additional money to catch up on the higher tax rate. The Office of Legislative Research did a report, which provides a detailed chart of the new income tax brackets in Sections 107-111 of the report located at http://www.cga.ct.gov/2011/BA/2011SB-01239-R01-BA.htm.

The legislature may have produced a budget before the end of session this year. Frankly, I would have rather spent my entire summer hashing out a better plan. This budget is not only disappointing and fails to make government more efficient; it represents a callous disregard for our struggling middle class. Connecticut has become an embarrassing example on a national level of how not to solve a budget crisis. In hoisting all of these taxes onto the people, state leaders have merely shifted our job of balancing a budget, onto the struggling middle class.

Candelora represents East Haven, North Branford and Wallingford in the Connecticut General Assembly.