January 23, 2014

Bolinsky, House Republican Lawmakers Propose Tax Relief for Taxpayers

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HARTFORD- In order to minimize the state tax burden on our residents and businesses, State Rep. Mitch Bolinsky (R-106) and fellow House Republicans are proposing to use our a portion of the $500 million state budget excess revenue to target tax relief.

Last week, the consensus revenue forecast reached between OPM [Office of Policy and Management] and the legislature’s Office of Fiscal Analysis projected Connecticut will end the year $506.1 million in the black.

“It’s only right to give taxpayers in Newtown some relief in their wallet after over-taxing them the last few years,” said Rep. Bolinsky. “State government should not be collecting excess revenue from its residents and then claiming everything is great after passing the largest tax hike in Connecticut history back in 2011.”

The contributing factors to the current state surplus are increased revenue collected from the 1) State Income Tax and the 2) State Tax Amnesty Program which brought in $175 million from delinquent taxpayers looking to settle their debts.

The tax relief plan also leaves approximately $268 million of the surplus for the payment of future debt, while leaving the Rainy Day Fund untouched and does not create any structural holes in future budgets.

The tax relief proposals are:

1. Restoring the tax exemption on clothes and footwear:

The clothing and footwear exemption for items under $50, projected to cost $167 million, is slated to be restored in July of 2015. The exemption will increase sales and help businesses meet their bottom lines. “This is the definition of a middle class tax cut,’’ said Bolinsky.

2. Eliminating the Special Assessment on businesses for the state unemployment fund:

• The Pre-paying of the interest on hundreds of millions the state borrowed from the federal government to cover unemployment benefits at the height of the recession will spare businesses from having to again foot the bill. Businesses, many of whom did not layoff a single worker, have been saddled with three consecutive special assessments to pay the interest costing them $71 million since 2010.

3. Restoring tax exemption on non-prescription drugs:

• Restoring the sales tax exemption for over-the-counter drugs.