And so it begins...

Governor Malloy has shown his true colors as a progressive liberal Democrat. 

I will admit that I haven’t seen his proposed spending reduction, government agency consolidation, and labor cost savings plans yet.  On the surface it seems as if he is going to essentially split the “load” between spending reduction and tax increases.  That would appear to be a fair approach.

However, he fails to realize the increased taxes in the third most taxed state in the country will at least slow, and probably kill, whatever economic recovery might be occurring in the state. 

By the way, in 2007, Connecticut was the fifth most taxed state in the country.  Does that tell you anything?

Some of the new sales taxes will impact the ability of some people to acquire the basics of life.  These include new sales taxes on haircuts and shoes (groceries next?).  The annual back to school clothing tax holiday is eliminated as is the $500 property income tax deduction. 

Currently the income tax rates for those couples filing jointly are:

3% on the first $20,000

5% on the excess over $20,000, but not over $1,000,000; and

6.5% on the excess over $1,000,000. 

Under the governor’s plan the rates for those couples filing jointly would be:

3% on the first $20,000
5% on the excess over $20,000 up to $100,000
5.5% on the excess over $100,000 up to $200,000
5.75% on the excess over $200,000 up to $400,000
6% on the excess over $400,000 up to $600,000
6.25% on the excess over $600,000 up to $800,000
6.5% on the excess over $800,000 up to $1 million
6.7% on the excess over $1 million

The Connecticut standard exemption for joint filers was $24,000 on a $48,000 Adjusted Gross Income (AGI).  The Connecticut standard “Tax Credit” was 15% at the $48.000 AGI level.

The governor hasn’t mentioned how these will be changed but I don’t think they will get any better.  Also, remember that the $500 property tax credit will go away.

It is obvious that these increases are aimed at the upper middle class, small business owners and independent contractors.  It may not seem like much but it, in addition to all the fees required by the state, will certainly cause at least a few businesses to fail. 

The current sales tax is 6%.  The new basic sales tax will be 6.25% on most things and 6.35% on some things (we don’t what those are yet).  The hotel tax will go from 12% to 14%.  I am sure that will encourage tourism in the state. 

I can only offer two bits of advice.

First, contact your state legislators to protest the more onerous tax increases and the lack of major government spending reforms (don’t count on the labor unions to help out). 

Second, if you are planning on purchasing any big ticket items, do it now or at least before the budget passes (it will, the Democrats control the state government).   

Good luck if you are on a fixed income and/or getting those non-existent pay raises.

An Unfortunate Prediction Comes to Pass

I have been predicting it; now here it comes.  Take a look at this…http://www.theday.com/article/20110210/BIZ03/302109398/1044.  Stock up on as much food as you can now.  The green progressives are taking control of the food supply.  Why is this country taking food out of the mouths of its citizens to make fuel when there are alternatives to food crops for the production of ethanol?  

I’m going to start gardening again this year.  I need to relearn canning and lay in a supply of jars, lids, etcetera.

You should also consider the fact that our federal government is telling us that inflation is so low as to be non-existent.  Have any of them bought groceries, gasoline, or paid the electricity bill lately?