Governor announces major tax hikes

Hartford, Conn (WTNH) - Governor Dannel Malloy's office claims he is proposing close to $2 billion in spending cuts. Those will hurt, but it's the tax hikes that will hurt the most.

Malloy's proposed hikes would be one of the largest tax increases in the history of the state. His plan would increase income taxes on the middle class and the wealthy, plus increase and extend the sales tax to things that have never been taxed before. The total tax hike is $1.5 billion.

The new, top income tax rate would be 6.7 percent. The income tax rates would go up for all single filers above $50,000 per year, and all couples above $100,000 per year. Everyone under those yearly income figures would not have an income tax hike, but they'd feel it in other ways.

The Sales tax would jump from 6.0 up to 6.25 percent, and it would be extended to things never taxed before; like non-prescription drugs, haircuts, car washes, and clothing under $50.

Malloy proposes increasing the Hotel Tax from the current 12 percent up to 14 percent, extending the 10 percent corporate surcharge on businesses that was scheduled to expire the end of this year, a 3 cent hike in the gas tax, 2 cents on diesel, and another increase in the cigarette tax of 40 cents per pack.

"I can only deal with the cards as they're currently arrayed and we're putting out, I think a great budget," Governor Malloy said.

Details of the tax hikes were originally reported by the website ctmirror.com.

Malloy knows that this is not going to be an easy sell. He's not only hiking the income tax, he proposes eliminating the $500 property tax credit that has been one of the Democrats' pet tax breaks for years.

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