Get Ready for the Income Tax Hike

In the wake of the July 1st tax increases on the goods and services our families all rely on, we will soon be paying even more. In order to balance the state’s bloated budget, the Governor and legislative majority voted to increase the income tax – exacerbating Connecticut’s tax burden.

Beginning August 1st, the state Department of Revenue Services (DRS) will be implementing these new and increased tax brackets and rates in order to collect $1.7 billion over the next two fiscal years. The number of income tax brackets has been increased from three to six with the top marginal income tax rate increased to 6.7%. The new income tax rates are 3%; 5%; 5.5%; 6.0%; 6.5%; and 6.7%. Also, filers should know that the 3% tax rate will be phased out for taxpayers with Connecticut adjusted gross income over $100,500 filing jointly; $56,500 filing single; $78,500 filing as head of household; and $50,250 married filing separately. For a full listing of revised withholding tables and tax brackets I encourage you to visit the DRS website at www.ct.gov/drs.

Connecticut is quickly becoming one of our country’s most expensive states in which to live and work, and the addition of the income tax changes comes at a time when taxpayers can least afford it. Worse, as it is retroactive to January 1st, folks will be forced to not only contribute more, but will be paying 12 months of higher taxes in just five months. Those affected will be forced to pay for this hike, retroactively, beginning August 1st and continuing through December 31st. Starting in January of 2012, filers will only be paying the increase.

This increase is another example of a taxation that squarely targets the middle class and will ultimately harm families and our jobs climate. If you are single and making $50,000, or married and making $100,000, you will see an additional $200 withheld from your paychecks throughout the remainder of the year in order to make up the difference in the tax increase. Families and individuals cannot afford the loss of income when they are also working through job loss, the onset of more than 75 other new taxes, higher state fees and more.

It is also important to note that these income tax increases and other taxes are being implemented while state government continues to bond millions of dollars for new projects, and in the midst of a state budget package that increases state spending by nearly $1 billion over the next two fiscal years. Government is forcing taxpayers to contribute a total of $3.7 billion more and meanwhile does nothing to decrease its own burdens or debt obligations.

I did not support, or vote for the Governor’s budget during the 2011 legislative session because it relies too much on middle class tax increases and not enough on cuts to state spending. Our state government must not rely only on middle class taxpayers to balance the state budget, but instead must be focused on right-sizing government and creating tax incentives to retain and create jobs for our families. The Governor’s taxes do little to support jobs or economic growth. In light of our high unemployment, state government must get our economy on track and put people back to work. I will continue to fight against new or increased taxes in an effort to rebuild Connecticut’s economy and job market to provide the peace of mind that Connecticut citizens and families are demanding.