Connecticut’s finance committee has approved a tax package that increases revenue by more than $2 billion over the next two years. Democrats say the increase is needed to fund the state’s $43.3 billion two-year budget proposal.
The package increases taxes on alcohol and e-cigarettes. It extends the 6.35% state sales tax to items like interior design services, Uber rides, digital downloads and non-coin operated dry cleaning. An additional 1% tax for meals at restaurants would go to cities and towns.
Senator John Fonfara, who co-chairs the state’s Finance, Revenue and Bonding Committee, says the new taxes are needed to replace one-time revenues that lawmakers used to balance the state’s last two-year budget.
“Are there things here that everyone is in love with? There are not. But I think overall we’ve done our best in listening to folks saying we’ve got to have a broader base so that we don’t have to raise the rate on any tax to a point where you see circumvention of that tax.”
The package also includes a controversial 2% surcharge on capital gains. Fonfara says less than 1% percent of state tax filers, who are the wealthiest, would be affected.
Democratic lawmakers will now negotiate with Governor Ned Lamont.
The Democratic governor says he would not support the capital gains tax increase.
