If You Make $60K A Year, You Won’t Like Malloy’s Budget
Still trying to figure out what Gov. Dannel P. Malloy’s personal income tax increases will mean for you and your family? The Office of Fiscal Analysis created this chart on page 26 of its budget analysis.
The chart shows that most of the increase in income taxes will be felt by the middle class. Those with annual adjusted gross incomes of $60,000 will bear the bulk of the burden with a 38.5 percent increase in income taxes. They will see their tax liability increase from an estimated $1,300 per year to $1,800 per year, mostly due to the elimination of the $500 property tax credit. Those who make $200,000 a year will feel the least pain with a 9.4 percent increase in income taxes. Those in the $200,000 tax bracket will see their tax liability increase from $9,600 a year to $10,500 a year.
Most of the increase for those making $60,000 a year also involves the elimination of the $500 property tax credit. For single filers who make $56,600 or more and joint filers who make $100,500 or more your income taxes will be increasing due to a change in the tax threshold. Malloy plans to phase out of a tax policy which applied a rate of 3 percent to the first $20,000 of income. He changed the income tax threshold so that 5 percent applies to all income starting with singles making $56,500 and couples making $100,500.
The first chart deals with joint filers and the second chart deals with single filers, who again at $60,000 will be asked to bear the burden of the “shared sacrifice” with a 22.1 percent increase in income taxes.
Those charts deal strictly with income and do not factor in the increases in the sales tax to 6.35 percent on retail items and the elimination of exemptions on things such as clothing under $50.
This next chart shows the impact of the increase of the sales tax by income level. It assumes spending habits will remain the same even though the sales tax will increase to 6.25 percent from 6 percent. Those making $200,000 or more per year will likely pay $82 more in sales tax. Those that make $60,000 a year will see their sales tax liability increase $34 for the year, and those that make $100,000 to $120,000 a year will see it increase by $49.