Updated: Rell Agrees To Millionaires Tax
In Exchange For Cuts
by Christine Stuart | August 26, 2009 11:20 AM
Posted to State Capitol
(Updated 3:42 p.m.) In an effort to break the state’s budget stalemate, Republican Gov. M. Jodi Rell announced Wednesday morning that she would support a millionaires tax as long as Democrats agreed to cut $520 million more in spending.
Rell said she will agree to increasing the income tax on individuals making $500,000 and families making $1 million from 5 percent to 6.5 percent. Under Rell’s latest proposal, the legislature will also have to agree to eliminate the estate tax, in addition, to reducing the sales tax from 6 percent to 5.5 percent.
“I would prefer not to have to offer this package,” Rell said. “I have been flexible, very flexible with taxes. Now they must do their part and cut spending.”
At a press conference Wednesday afternoon, the state’s two top Democratic leaders said they were encouraged by Rell’s proposal.
“We’re happy to see that she’s recognized the need to ask those who have a bit more to contribute to our deficit by including the millionaires tax,” Speaker of the House Chris Donovan said. “We think that will go a long way towards filling the gaps.”
As far as the $520 million in additional cuts are concerned, Donovan said there will be cuts, but he can’t say exactly where they’ll be because the Office of Fiscal Analysis is still “crunching the numbers.”
Donovan called the proposed sales tax reduction from 6 percent to 5.5 percent “intriguing,” but “again we have to see where the numbers fit.”
Sen. President Donald Williams said its unclear at the moment how much these proposals reduce or increase the state’s revenue stream.
“We’re prepared to put a couple more cuts on the table, but what we have really been waiting for is movement from the governor on a progressive income tax that brings the wealthy to the table,” Williams said.
With a possible budget agreement on the horizon, Williams and Donovan decided to cancel Thursday’s special session, where they had planned to run a budget with or without the governor’s support.
If things “break the right way,” Donovan predicted they could have a budget agreement ready for a vote of the General Assembly by Friday at the earliest and no later than Sept. 1 at the latest. He said if Friday isn’t possible then they could work throughout the weekend and pass something early next week.
The legislature’s top two Republican leaders, who have argued that it’s not necessary to raise taxes in order to close the $8.56 billion budget deficit, said there are things they like and things they don’t like about Rell’s proposal.
“I consider the governor’s package, a package. Not an a la cart menu,” House Minority Leader Lawrence Cafero said. He said his Democratic colleagues should not be looking at this package thinking they’re going to be able to “cherry pick” the proposals they like and ignore the parts they don’t.
That being said, “we’re concerned about the overall impact of the tax increases,” Sen. Minority Leader John McKinney said. “But I applaud her for trying to break this budget impasse.”
“Clearly the burden is now on the Democrat leaders,” McKinney said.
Republicans said they were impressed with the thoughtfulness of Rell’s proposal. They said the combination of lowering the sales tax and eliminating the estate tax will actually help create jobs and generate revenue for the state.
The House Democrats held a caucus Wednesday afternoon following the press conferences. Donovan said he would let them know as much as possible about Rell’s latest budget proposal.
Comments (14)
Posted by: ctkeith | August 26, 2009 12:07 PM
Looks like the Dems finally lined up the votes in the Senate to override the Veto and the Jody didn't want to become Gov iRELLevent.
It really says everything one needs to know about the Gov top priority in this negotiation is to eliminate the Estate tax.
Posted by: Rocco Frank | August 26, 2009 3:28 PM
Banks Already Tax The Heck Out Of The Poor. That Is why Rich People Make Sense especially Bankers.
Read This Case In Point...
The financial world today has changed greatly over the years, with seven day banking and faster than ever clearing times of transactions our finances have moved into the realm of light speed.
Big banks and their banking policies have also changed greatly with the changing times. After the Real Estate bubble popped, big banks became victims of their own greed. Staggering foreclosures and evaporating collateral in real estate forced hundreds of small and large banks to go out of business.
However, some select banks were deemed "too big to fail" and reckless and greedy banking institutions like AIG, Citibank, Fannie Mae, Freddy Mac, Bank of America, etc.. etc.. were given Trillions of dollars in taxpayer bailout money.
This money was created by the Federal Reserve System, a corrupt institution run by the banking elite themselves and led by Ben Bernake. While many have recently congratulated Ben Bernake for fending off a Depression globally, Americans have seen no relief, no growth, and ever increasing unemployment.
The Trillions in fake money that has been given to so many un-named institutions are still a mystery to the average American but fortunately our leaders have taken notice and two bills H.R 1207 and SB 607 are demanding an audit of the Federal Reserve. The Federal Reserve has fought back by hiring a high priced PR firm to lobby Congress and make sure the recipients of the Trillions in tax dollars are kept secret.
According to Peter Schiff of Euro Pacific Capital, every one of us will be paying the price even harder in the coming years."When the fake money hits the streets Congress will be confronted with two horrible choices. Raise interest rates to stop runaway inflation and further collapse the real estate market and stock market or leave interest rates low and force the Dollar down against other currencies. This second choice also brings the risk of forcing our debtors to cut their losses, to induce the sale of U.S. treasuries and debt and spawn hyper inflation, or worse hyper stagflation."
"The stage we are at now with banks is one...
CONTINUE READING BY CLICKING BELOW
www.milforddailyblog.com
Posted by: ctkeith | August 26, 2009 5:22 PM
Man,
Jodi Rell and Governor Moody seem to get more pleasure out of throwing Cafero and McKinney under a bus than any other thing in life.First the senate vacancy bill and now the No Income Tax increase pledge.
If these two sissy boys were married to the two girls in charge they'd have little trouble getting a judge to rule they were Battered Spouses.
Posted by: ACR | August 26, 2009 9:09 PM
>>If these two sissy boys
They both get up and go to work.
How about you?
Posted by: Rocco | August 26, 2009 9:37 PM
6% to 5.5% = A Tax decrease for the rich.
This is a great deal they pay $20.00 and save $300-$400 on the reduction in sales tax.
Rell sure is clever!!
Posted by: ACR | August 26, 2009 10:26 PM
>>this is a great deal they pay $20.00
I guess we should spend more on education considering your math.
5% of $500,000 = $25000
6.5 of $500,000 = $32500
Just under 150 bucks a week.
Posted by: Streever | August 26, 2009 11:46 PM
reality:
http://reptimobrien.blogspot.com/2009/04/why-do-middle-class-and-poor-pay-more.html
thanks for pushing on this Dems
Posted by: Cory | August 27, 2009 6:27 AM
Great job & thanks for the document link!
Posted by: Pedro | August 27, 2009 9:45 AM
You know, if it's done to a half, for low-cost items, will stores have to round up or down? a $5 purchase will have 27.5 cents of tax on it. Does it go to 28 cents or 27?
Posted by: ctkeith | August 27, 2009 10:20 AM
ACR,
I notice you didn't argue with the premise of the comment.That's simply because you can't.
The Moody/Rell administation has hung Cafero,McKinney,Healy and the entire Ct Republican caucus out to dry without batting an eyelash so many times the Battered Spouse Party is a more accurate discription of your Party then the current title.
The killer is if Rell decides to retire instead of seeking another term you'll be an even smallar minority and if the Dems take the Governorship I think the Working Families Party will be bigger than the Republican party in Ct in a decade or so.
Posted by: jon pelto | August 27, 2009 2:05 PM
So, here is a really important Reality Check about the present budget debate...
As people weighing in, it is vital to understand what the Governor's plan really is...
Rell proposes $260 million in "new taxes"
***That is an increase in the income tax for people making over $500,000
***The elimination of the estate tax
***A reduction of the sales tax
Rell also proposes $260 million in NEW BORROWING via the securitization of more future revenue. This means that the state borrows money by agreeing to give future revenue to a lender. You've seen the ads on TV - "You deserve your money now". What the ad doesn't tell you is that they will only give you a fraction of the money you are owed --- and in return you give them all that future money. This bizarre borrowing trick has two very negative effects. First you have to pay a very high premium. Rell claims that she can get 70 cents on the dollar ---- but the truth is we'll be lucky to get 50 cents on the dollar when you actually calculate how much you get today for what you give away over the next few years. Second - and even worse - that "future" revenue then isn't available in those future years when you need it which means it leads to higher taxes... but interestingly the hit doesn't come until after the next election in 2010.
Finally, Rell "proposes" $520 million in unspecified cuts....Here we go again.
Governor "proposes" to cut the budget BUT THEN FAILS TO IDENTIFY A SINGLE PROGRAM, SERVICE OR ACTIVITY TO CUT. Why - because she doesn't want to be the barer of bad news. How is it possible that the Chief Executive Officer can get away with announcing that we should "find" $520 million more in cuts --- and then not say where those cuts should come from....human services?, education? Town aid?
It is hard to imagine it possible - but Governor Rell has proposed a significant tax increase while proposing a budget that is even more fiscally irresponsible...
Posted by: Jim | August 27, 2009 2:56 PM
Hey ACR,
The math is right for a person making $600,000 a year that increase would be 20 bucks a week yet a state worker making $50,000 a year when you take into account furlough days, a hard zero on wages, higher copays on insurance you come to about $53 perweek per employee.
If your arguing for the wealthy you are not doing that good of a job. Must be that fuzzy math you guys use. LOL
Posted by: ACR | August 27, 2009 11:48 PM
>>20 bucks a week yet a state worker making $50,000 a year when you take into account furlough days, a hard zero on wages, higher copays on insurance you come to about $53 perweek per employee.
No - it's about 144 a week NOT 20.
State employees?
Lay off 50% starting with the highest paid staffer in both Senate caucuses (both are loons) - that should solve a lot of problems.
Posted by: Jim | August 28, 2009 6:46 AM
ACR,
Where the heck do you come up with $144???
The Math is simple for the first $500,000 the tax payer pays at the old rate of 5% from the $500,000 to $600,000 they would pay at the rate of six insteated of the five they pay now.
according to my 1989 TI calculator that comes to a cool $1000 more. Now divide that by 52 weeks a year and you get $19.23 a week.
As for your assumption on the state workers lets start with Rells son because all giving should start at home.
Then we should look at ALL appointed jobs and that would be simple just turn back the clock to 1990 which would leave us at pre Rowland and have that be the # this administration would have to get to.
Could you Imagine the 8 to 10,000 $100,000+ a year jobs many who do nothing eliminated immediatly with savings of hundreds of millions!!! Wow!!! your right lets!!!