Sen. Kane Reveals Gov. Malloy’s “Sales Tax Shell Game” (WFSB)

February 16, 2015

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WFSB 3 Connecticut
MIDDLETOWN, CT (WFSB) – Gov. Dannel P. Malloy toured businesses in downtown Middletown on Monday to talk about his proposal to lower the state sales tax.

The governor announced his plan during an exclusive interview on Face the State on Sunday morning.

The sales tax would be reduced from its current rate of 6.35 to 5.95 percent in 2017, which would be the lowest level since 1971.

The proposal states that the reduction will take place in two phases.

The sales tax would be reduced to 6.2 percent by Nov. 1 of this year, and then to 5.95 percent by April 1, 2017.

“I think it’s a way to give some relief to the middle class as the economy is improving, and I’m proud to present this as a proposal to the Legislature. My budget will assume that this is happening,” Malloy said on Face the State.

The proposal would eliminate the exemption from the sales tax for clothing, which was scheduled to begin on July 1 of this year.

Mike Headd was shopping at Amato’s Toy Store in Middletown on Monday with his son, and he said he wasn’t opposed to the sales tax reduction.

“Yeah I came from New Hampshire and there is no sales so its a big difference when you come here,” Headd said.

“Remember, at times the sales tax has been as high as 8 percent – when we are at 5.95 percent we will have the lowest rate in the area and I think it will be an incentive for people to do more shopping in Connecticut,” Malloy said on Monday.

During the annual Sales Tax Free Week in August, no sales tax would be owed for clothing costing less than $100.

Right now, that total amount for no sales tax is $300.

Malloy said the lower sales tax rates will save consumers $70 million in fiscal year 2016, $155 million in fiscal year 2017, $300 million in fiscal year 2018, $311 million in fiscal year 2019 and $323 million in fiscal year 2020.

“Our economy continues to improve, and the state is seeing the largest private-sector job growth since 1998,” Malloy said. “By streamlining and simplifying our sales tax structure, we can give working families the lowest sales tax level in four decades.”

The sales tax was at 6 percent between 1991 and 2011, was between 7 and 8 percent from 1976 to 1991 and was at 6 percent on 1975.

Republicans have said this proposal is a shell game.

“When he claims he’s helping the middle class and the lower to middle class families – he’s really not, because you may save them five cents in one pocket but he’s taking another $5 out of the other pocket,” said Republican State Senator in Watertown Rob Kane.

Malloy said his proposal will be presented to the General Assembly at noon on Wednesday.

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