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If You Make $60K A Year, You Won’t Like Malloy’s Budget

by Christine Stuart | Feb 21, 2011 3:30pm
(6) Comments | Commenting has expired
Posted to: State Budget

OFA chart

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.

OFA chart

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.

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(6) Comments

posted by: cedarhillresident | February 21, 2011  3:39pm

This chart assumes people can get EIC what about the single filers??

posted by: Christine Stuart | February 21, 2011  3:46pm

Christine Stuart

Only those making $21,500 or less will receive the EITC. If you click the link and scroll down you’ll see the chart for single filers.

posted by: cedarhillresident | February 21, 2011  4:02pm

Right the single is even based on if I can claim kids if not I am seeing more than a 23% increase. Like the chart shows! MUCH MORE! GRRR they are twisting the numbers.

posted by: GoatBoyPHD | February 21, 2011  4:27pm

GoatBoyPHD

Thanks Christine.

Feel free to get on my soapbox for me.

SoapBox Issue: The Democrats are at war with the working class earning between 22K and 80K at private employers. This donut hole is getting the sharp end of the stick from Mr Obama and Mr Malloy.

Here’s the facts: The middle class property tax credit has been converted to the EIC for low income residents.

SustNet Phase I (2014) is aimed at consolidating State Employees policies, other munis, and state managed, needs tested policies into one exchange. It may offer Obamacare policies come 2014. It may not.

Certainly no immediate SustiNet savings to the 22K to 80K donut hole working for private industry.

Obama is proposing an elmination of the mortgage income tax deduction among other middle class tax perks nad has taken deficit spending to new heights with his shovel ready projects that were mis-managed by state governmetns to prop up faltering state budgets and to purchase union votes.

That’s without discussing the immediate financial effects of ObamaCare on the the middle class before any real cost savings, if they appear, kick in.

My 2C. The flipper government workers are getting in Wisconsin is not all that far away from the North East states.

posted by: bgenerous | February 21, 2011  5:38pm

A $30,000 joint filer with 2 children and without property will see their taxes decrease by 2156.6% (from $45 to -$925).  One can gain another perspective by examining how the taxes are changing as a percent of income.  For the $60,000 joint filer in the article, the taxes as a percent of income change from 2.17% to 3.00%.  While a 38.5% increase in taxes for that example seems large, it doesn’t look as bad when the new tax is presented as 3.00% of income.

posted by: GoatBoyPHD | February 21, 2011  8:26pm

GoatBoyPHD

If Malloy reinstates the property tax deduction and promises more union and state concessions from those earning over $100,000 a year to cover that he’d be a fiscally responsible Democrat. A 10% salaty hit would be good starting with Susan Herbst.