Tax day arrives as lawmakers trade barbs
HARTFORD — Monday was the day of reckoning for Connecticut taxpayers already grappling with high property taxes to deal with the new nationwide limits on tax deductions.
For first-term state Sen. Julie Kushner, D-Danbury, it meant she and her husband, now both retired, had to pay $10,800 more than last year.
“And there’s something wrong with that,” Kushner said. “The tax cuts that they made in Washington was the largest transfer of wealth in this country in probably a century, and we just didn’t realize it. So many people had no idea how it was going to deeply impact our families. We know if you own a house you were hurt by it. We know if you’re a renter you may think you’re off easy for a little while, but you’re going to be hurt by it in the end.”
According to the state Department of Revenue Services, extrapolating from
2015 tax data, more than
117,000 state filers may have to pay in excess of $10,000 in state and local taxes, or SALT, which is the new standard deduction.
In 2015, 483,790 state filers claimed in excess of
$10,000 in SALT deductions on their federal income tax return, but the DRS anticipates that most will change over their filing this year to the standard deduction.
“We’re letting multimillion-trillion-billion-dollar corporations pay very little into what our society needs,” said Sen. Mary Daugherty Abrams, DMeriden, another first-term lawmaker who joined Senate President Pro Tempore Martin M. Looney in warning about the effects of the GOP tax scheme that was passed when Republicans still had a majority in the U.S. House of Representatives.
Looney said Republicans claimed at the time that all businesses would benefit greatly from lower taxes, but in fact only large corporations have cashed in.
During a news conference in the Capitol, Senate Democrats cited nonpartisan legislative research to estimate that Connecticut taxpayers could be hit with a $2.8 billion tax hike because of the 2017 tax law passed by President Donald Trump and Republicans.
But Tony Cirone, a Bethel CPA, said in a recent interview that some businesses have it easier because the General Assembly last year passed legislation to allow so-called pass-through entities, including partnerships and S corporations, to take deductions for taxes owed to Connecticut.
“This is a lot of extra work for accounting firms and business entities,” said Cirone, a member of the Connecticut Society of CPAs, anticipating that fewer people will now be itemizing their deductions.
Looney, said the legislation was one way in which the General Assembly is dealing with the issue. “Because they pay their business taxes, basically, as part of their personal income tax, they’ve been helped by this quite a bit,” Looney said. “At least the larger ones have, the ones who have a significant infusion of money into their personal accounts.”
Looney said states most affected by the SALT limits include New York and New Jersey, which did not support Trump in the 2016 election.
Looney has proposed a property tax surcharge on properties worth more than $5 million. “Any tax change we make has to have some progressivity built into it,”
Connecticut has joined several other states in challenging the Republican tax law in court.
In reaction to the Democratic criticism, Senate Minority Leader Len Fasano, R-North Haven, termed it “fake outrage” coming from “the very same people responsible for some of the biggest tax increases in Connecticut history and the same lawmakers who have been silent on the massive tax increase proposed by the governor this year.”
He said that Connecticut Democrats have virtually no control over what occurs in Washington, but they want to focus on Congress and Trump instead of what they have done at home.
Scott D. Jackson, state commissioner of Revenue Services, said the agency expects more than 1.88 million income tax returns to be filed this tax season, with nine out of 10 filed electronically.