Connecticut Governor Jodi Rell, a Republican, apparently has given up on tightening the state’s budget, and given up on helping the state’s economy, by proposing a bevy of increased taxes.
According to the Hartford Courant, Rell’s tax hikes include jacking up the state’s cigarette tax from $2 per pack to $3 per pack, which comes on the heels of a 2007 increase from $1.51 to $2. Also, Rell called for a 10 percent increase in the tax on alcohol, and a three-year, 10 percent surcharge on corporate profits (moving the top corporate tax rate from 7.5 percent to 8.25 percent).
As for the Democrats that run the state legislature, they want a higher cigarette tax as well, but also are seeking a big jump in the state’s personal income tax rate (moving the top rate from 5% to 7%) and the imposition of a 15 percent (down from 30 percent) surcharge on corporate profits (shifting the top rate to 8.625 percent).
The Courant reported: “Overall, Rell is seeking to raise taxes by $391 million, while the Democrats intend to raise taxes by $1.8 billion over two years.”
In Connecticut, taxpayers, including entrepreneurs, small businesses and investors, face bad ideas from a Republican governor, and even worse proposals from Democratic state lawmakers. So, the state’s policy climate for entrepreneurship and small business, which already is pretty poor (see SBE Council’s “Small Business Survival Index”), seems destined to only get worse – by how much is the question.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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