Connecticut’s Hidden Tax is Scheduled for an Increase
by Christine Stuart | March 22, 2008 10:18 PM
Posted to State Capitol
As gas prices creep up to an average $3.40 per gallon, state legislators are debating on whether to go ahead with another increase this July.
Earlier this week the General Law Committee approved a bill that would cancel the July 1 increase in the gross receipts tax, which is built into retail gas prices as a percentage per gallon.
“This is an insidious hidden tax that was put into place when the price of gasoline was at $1.50 a gallon,” Sen. David Cappiello, R-Danbury, said in a press release earlier this week.
“We talk about price gouging at the pump all the time, but the biggest culprit is the state of Connecticut,” Cappiello said.
What many people may not know is that “Every time the price of gasoline increases the state collects more money and to increase the rate at a time when gas prices are approaching $3.50 a gallon is really beyond belief. We simply cannot allow these increases to happen,” Cappiello said.
The gross receipts tax is currently 7 percent, or about 19.2 cents per gallon. Add that to the 25-cent excise tax charged at the pump and Connecticut residents pay a whopping 44.2 cents to the state for every gallon they pump. The gross receipts tax is expected to go up to 7.5 percent on July 1.
Cappiello said that since 2005 the state has taken in an additional $141 million from the gross receipts tax. In 2008, the state expects to take in a record $320 million from the tax.
“The state is already getting more money than it ever projected, so to allow these rate increases to continue is nothing short of price gauging by the state and the taxpayers are the ones who are getting fleeced. It’s wrong, and we need to put an end to it.”
Click here to see a chart of gas prices and taxes throughout the Northeast.
Comments (4)
Posted by: Doug | March 22, 2008 11:17 PM
I hate this tax.
However, I heard today that the nation's rate of gasoline usage dropped 1.5 percent last year - which means 2 things:
1. People are actually cutting back on extraneous driving, despite what the polls told us several months ago, and;
2. Maybe the tax is a good thing if it encourages responsible driving.
But I think that maybe there's a compromise to be had somewhere. Keep the tax at the pump, but give most or all of it back as an addition to our state tax returns. Make everyone who drives or can produce a gasoline sales receipt eligible for the refund.
Above all, don't allow the current tax revenue to be used in the state's operating budget outside of what it was intended to do - which was to fund the transportation budget. I think they should put all of it into mass transit development - use it to cut the price of train tickets and add more rails & cars.
Posted by: Steven G. Erickson | March 23, 2008 12:34 PM
Gas is at least 30 cents cheaper up in Massachusetts. If I have to drive in Connecticut, I make sure that I have enough Massachusetts gas in my tank.
Connecticut is a tax pig.
Citizens are taxed at the maximum, and there are a lot of hidden fees. Fines and property confiscation is probably higher in Connecticut than in more American States in the Union.
Connecticut official policies are more about maximizing of bringing in Federal tax dollars, even if it harms children, families, citizens, business, and the national and state economy.
Posted by: j schmidt | March 24, 2008 8:28 PM
I just drove up from DC today- New Jersey gas was 3.079 on the turnpike, and in NY I near Newburgh I paid 3.279. Same gas as in CT. When the Attorney General wants to investigate price gouging, maybe he should investigate the state. And of course, you'd expect this would go to the upkeep of roads but I believe it goes into the general revenue fund. The state should cut the tax when the price of gas exceeds a certain number. That way the driver and the state both feel the pain. Right now the taxpayers get hit harder as the cost of gas increases.
Posted by: Doug | March 24, 2008 9:45 PM
And J you got full service at the pump in NJ as well - there is no self-service in NJ. That's job creation for you.
Thing about Jersey is they have the tolls, which I'd want to avoid here. I don't know if the smartpass technology is good enough to avoid any backup at all. but CT's highways were designed so badly (no beltway, etc) that adding tolls might create gridlock.