The Register Citizen (Torrington, CT)
Democrats eye capital gains surcharge
HARTFORD — Democratic majority leaders say there is not much support for Gov. Ned Lamont’s proposed expansion of the sales tax, and that momentum seems to be growing for a proposed 2 percent surcharge on capital gains for the state’s wealthiest.
“We believe that those that are doing very well are obligated to pay their fair share,” Speaker of the House Joe Aresimowicz, D-Berlin, said on Tuesday. “People are making a great deal of money and they’re successfully dodging some of the tax laws, or not paying the tax that they once would have at the federal level.”
Aresimowicz and House Majority Leader Matt Ritter, speaking with reporters prior to the day’s business session in the House of Representatives, said criticism is widespread of Lamont’s proposed elimination of some long-standing sales tax-free designations.
“A lot of our caucus members have told us that they are frustrated at the lack of rhyme and reason
with the sales tax exemptions, and I think the governor was trying to get at that,” said Aresimowicz, whose legislative counterpart, Senate President Pro Tempore Martin M. Looney, recently voiced a similar opinion. A surcharge on capital gains — mostly investment income and property sales for those in the highest tax bracket — could raise $200 million for the state budget.
“A lot of the areas are tough,” Aresimowicz said of Lamont’s proposals, stressing that adding items such as children’s car seats to the list of purchases subject to the sales tax, is getting wide-ranging criticism. Lamont has asked for a variety of new sales and service taxes, from media downloads, to haircuts, legal work and accounting contracts.
“We think it’s a basic fairness issue,” Aresimowicz said, stressing that Democratic rank-and-file don’t want to have a major confrontation with the governor on the issue. “I look forward to a discussion.”
Ritter, D-Hartford, said that the goal is to not raise income tax rates because of Connecticut’s competitive position with New York and Massachusetts. “There is room to grow on the capital gains,” Ritter said, noting Lamont has proposed raising the threshold for the estate tax, and eliminating the gift tax, both of which remain alive in the General Assembly.
“You had the huge tax break by the Trump administration on the income tax side for the highest earners,” Ritter said. “I think our caucus is saying all those things in totality, make the capital gain a reasonable thing to discuss. In isolation, some of these questions would be harder to answer, but all that in totality makes a lot of sense.”
House Minority Leader Themis Klarides, R-Derby, said the Democrats’ proposal to enact highway tolls seems to be “falling apart,” so capital gains and a proposed surcharge on homes
“We believe that those that are doing very well are obligated to pay their fair share.” Speaker of the House Joe Aresimowicz, D-Berlin,
valued at $5 million or more, seem to be emerging as revenue generators.
“We believe the more money you make, the more money you should pay,” Klarides said outside the House chamber. “Which is why the income tax is structured the way it is. But when you start piling on capital gains taxes and mansion taxes and increases in people’s pocketbooks every day and every night, people who have means, have the ability to leave. In 2016, over $6 billion in adjusted gross income left this state and only $3.3 billion came back in. When you can’t balance your budget in a responsible way these are the proposals that come forward.”
The fiscal committee of the General Assembly has until the first week of May to act on budget legislation.