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State Rep. Steinberg, Democrats Support Budget's Tax Increases

Westport state Rep. Jonathan Steinberg and fellow Democrats reached agreement about Gov. Dannel P. Malloy's state budget last week.

State Rep. Jonathan Steinberg, (D-136) was one of 65 House Democrats who supports raising the top income tax bracket rate to 7 percent. That’s beyond the one Gov. Dannel P. Malloy’s proposed.  

“I don’t think there is any realistic prospect of balancing the budget without a tax increase,” Steinberg said.

Despite the letter, Malloy would only go as high as 6.7 percent, up from his original 6.5 percent. The Democrats the budget last week. State officials say the deal would be the earliest budget ever adopted by the state.

Currently, the proposed budget includes $1.5 billion in tax increase. The revenue would come from a myriad of sources, including replacing the current $500 property tax credit with a $300 property tax credit. The governor’s budget also calls for a hike in the state sales tax from 6 percent to 6.35 percent.  

Some economists said the state could raise at least $270 million if the sales tax rises. However, that’s speculative and raising it even slightly could hurt business.

That’s not prudent in this economy, Steinberg said. Too many small businesses would be hurt by the sales tax, as would the middle class.

In that, Republicans and Democrats agree.

Many people shop in Connecticut because it has a lower sales tax, said state Sen. Toni Boucher, a Republican who represents Bethel, New Canaan, Redding, Ridgefield, Weston Wilton, and Westport in the 26th Senate District. The border towns, such as Greenwich and Danbury could see business drop if the sales tax rises.

And though some might think so, this proposal isn’t intended to “soak the rich”, Steinberg said.

“It’s our way of saying we’ve got the governor’s back,” Steinberg said.

In an April 11 letter to House Speaker Chris Donovan, Steinberg and his colleagues said they “believe a more progressive income tax structure should be part of any revenue package included in our budget. We strongly believe that the upper income brackets in the Governor’s proposal did not go far enough and that our highest rate should go above the .2 percent increase proposed to at least .5 percent.”

According to the Office of Fiscal Analysis, the governor’s proposed income tax changes would increase taxes on families earing $60,000 a year by 38.5 percent compared with 10.4 percent on families earning over $2 million a year.

“These numbers need to be changes, so that the “shared sacrifice” is fair sacrifice,” according to the Democrats’ letter.

Bob Zappi, Chairman of the Westport Republican Town Committee, isn’t convinced.

“This is punitive to Westporters as many are entrepreneurs and business income is taxed at this high personal rate,” Zappi said. “Typically, lawmakers representing New Haven, Hartford and Bridgeport, controlled by the Democrat speaker, propose these types of tax increases. Imagine our surprise when we saw Westport's very own Rep. Steinberg had signed!”

Moreover, the letter to Donovan was written the same day that it was reported Connecticut lost 6,000 more jobs, Zappi said.

And, Zappi said, “unlike most other states, Connecticut’s income tax is based on Federal AGI, not Federal taxable income, so our effective rate is much higher to start with.”

Malloy has promised spending cuts as well as tax hikes to make up the $3.5 billion state deficit. He is seeking $1 billion in concessions from state employees, but there is no guarantee he’ll be successful. 

No matter what, the freshman representative said the budget process is replete with stark choices.

“It seems to me somewhat more reasonable to ask those who are doing a bit better in this economy to shoulder a bit more of the burden,” Steinberg said. “I don’t have a lot of sympathy for people making over $1 million a year. They’re the ones who could better deal with incrementally greater contribution.”

Stephen Silver April 25, 2011 at 03:42 PM
a 6.35% sales tax who could ever think of that. With the internet still being untaxable and retail still slow. I don't get it. And try figuring out 6.35% who could do that. Just one retailers opinion
Jonathan Steinberg April 25, 2011 at 09:40 PM
I suppose that I shouldn't be surprised by Mr. Zappi's spin on my comments. So much for the spirit of bi-partisanship with the state's fiscal future at stake. As he knows (I thought I made it clear to Ms. Prince as well), I was willing to sign on to the income tax letter only because I was seeking elimination of the business-killing, regressive consumer sales taxes in the Governor's proposed budget. Most of those have just been removed in the Legislature's budget; I'm still seeing what can be done about the so-called "luxury" tax on cars and boats. I guess I must have some sympathy for the better off! Rather than get my views filtered by the Republican Town Committee chair, come to the budget town hall tomorrow (Tuesday) at 7:00 PM at the Senior Center to hear them directly. -- Rep. Jonathan Steinberg
NK April 29, 2011 at 05:50 PM
Mr. Steinberg-- 5 words-- CUT SPENDING, CUT STATE JOBS. Of course you don't speak that language because those state jobs pay union dues and those union dues go to buy you, the Govenor and your Party bosses off. Oh well, your party has a monopoly of political power in the State, and that power will translate into tax increases, no State union givebacks and as a result United Tech leaves the State, the remaining Ins companies leave the State, the hedge funds leave the State, the high income types leave the State-- what employment and tax base will you and the union thugs have left? A rhetorical question, Connecticut will be like Detroit with trees. You'll have to tax Yale U and the hospitals they'll be the only employers left. Good luck with that tax base. I'll watch from a Manhattan highrise apartment-- with sorrow and contempt.

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