HARTFORD, CT – On Tax Day, Connecticut Senate Democrats highlighted the impact of the new federal tax code on the residents of our state. The nonpartisan Office of Legislative Research estimates that Connecticut taxpayers saw a $2.8 billion tax increase as a result of the new tax law passed by President Donald Trump and Republicans.[1]
Specifically the new federal tax law limits the state and local tax (SALT) deduction which taxpayers can claim at $10,000. According to an analysis of 2015 tax returns by the Government Finance Officers Association[2], 41% of Connecticut taxpayers claimed an average SALT tax deduction of $19,665. 41% is the second highest among all states (behind Maryland at 46%) and $19,665 is also the second highest (behind New York at $22,169.)
While Connecticut residents are seeing tax increases large corporations are receiving tax cuts. The Republican tax plan lowered the corporate tax rate from 35 percent to 21 percent. As a result the number of companies paying no taxes went from 30 to 60 according to an analysis released today by the Institute on Taxation and Economic Policy.[3]
“Today, Connecticut residents saw a $2.8 billion tax hike courtesy of President Trump and the Republican Congress,” said Senate President Pro Tempore Martin M. Looney (D-New Haven). “The state and local tax deduction provides relief for over 40 percent of Connecticut residents. Republicans have ignored the needs of Connecticut families and small businesses and have once again put the wealthiest before the middle class.”
“When Connecticut taxpayers file their taxes and see the huge bill they owe we want them to know that the culprit is Donald Trump and the Republicans,” said Senate Majority Leader Bob Duff (D-Norwalk). “This tax increase is the latest assault on the people of Connecticut by Republicans. It is unconscionable that small businesses and homeowners are paying more while corporations are paying less.”
Additionally, these tax cuts have not helped small businesses. According to a recent poll by Businesses For Responsible Tax Reform, a majority of small business owners say the new tax law has not helped their business.[4] The nationwide poll found that 48% of small businesses said the new tax law had no impact on the growth or profitability of their business, 24% said it had a negative impact, and only 19% said it had a positive impact on their business. The coalition of small business owners, economic leaders and business associations at the national, state and local level support rolling back cuts for corporations to help small businesses.[5]
1 https://www.cga.ct.gov/2018/rpt/pdf/2018-R-0283.pdf
2 https://www.gfoa.org/sites/default/files/GFOA_SALT_09202017.pdf
3 https://itep.org/notadime/
4 https://docs.wixstatic.com/ugd/4a8609_308eb721aee24edea3e93b43081e5303.pdf
5 https://www.businessesfortaxreform.org/