Taxing discounts and coupons: A dangerous proposal

(State Rep. Vincent J. Candelora is a Republican representing East Haven, North Branford and Wallingford. He is the deputy House minority leader)

I believe this budget session is going to be less about party politics and more about courage.  Namely, which legislators will have the courage to stand up to the Governor’s budget proposal and make changes to the tax and spend policies.

I’ve attended several events where the governor or his staff has said that the legislature should pass this budget because, while not perfect, it is as good as it gets. The governor has remarked that we should be careful about which direction we push him.  Other legislators have remarked that we should just pass the governor’s budget because if we change it too much, it becomes the legislature’s budget, rather than the governor’s. It seems that while different people and parties are holding new offices, the rules of the game haven’t changed. The budget undoubtedly is the hot potato, and we could use some oven mitts.

I’m deeply concerned about many of the governor’s proposals.  His plan for $3.7 billion in new taxes over the biennium is too much. Whether it be the income tax increases, sales tax increases, elimination of sales tax exemptions, the hospital provider tax, tax on corporations or tax on electric generation, all of these roads lead to one destination: Connecticut families. Families and seniors are struggling.  I see it, I hear it, and I feel it every day. I know you can’t afford to pay $1,500 in new taxes annually, and that is why I cannot support this budget. It is unjustifiable.

I am amazed at the governor’s proposal to impose a sales tax on “discounts and coupons”.  I cannot even fathom who conjured up this proposal and how anyone thought it was a good enough idea to incorporate into a budget. As if taxes are not bad enough, the state would now begin telling businesses how much they should be valuing their products for the purpose of collecting a tax. This would be an unprecedented intrusion into capitalism. As a business owner myself who has to collect sales taxes, I can tell you it’s one of the most confusing and tedious piece of our tax structure. The laws are cumbersome, and the Connecticut Department of Revenue Services doesn’t always consistently apply the law.

If this proposal stands, it will become the most obstructive, anti-job law for Connecticut. With the elimination of the clothing tax exemption, you may be paying more in taxes than the clothing itself. Last week, while at Macy’s, I bought a suit marked down from $450 to $25. Under the new proposal, my potential taxes would be $28.58. Imagine a 6.35% sales tax could someone become 115% of the purchase price merely because of a coupon discount. The term, “MSRP” (Manufacturer’s Suggested Retail Price) will quickly become a dirty word in stores, and yes, you’ll be paying taxes on scratch and dent items as if those scratches and dents never existed.

I don’t believe that the governor’s budget is the best we are going to get, and I also don’t believe that the legislature can avoid criticism by hiding behind the governor and blaming him for these bad tax proposals.  Proposals, such as a tax on coupons, just can’t survive.  The legislature must stand up to these proposals.  We have to do better. Connecticut residents cannot afford anything less.

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