HARTFORD, CT - State Representative Michael Molgano (R-144) supports a plan to save consumers a total of $185 million by restoring tax exemptions for clothing, footwear and over-the-counter medicine, and provide small business relief by eliminating a special unemployment assessment of $59 million - without adding to the state deficit.
The total cost of $247 million for the initiatives will be covered through available funds and will not create future budget deficits.
“We are putting forth a valiant effort at preserving the value of our tax dollars by putting forth proposals that will provide tax relief and boost the economy,” said Rep. Molgano.
Restoring the tax exemption on clothes and footwear:
The clothing and footwear exemption for items under $50, projected to cost $167 million, is scheduled to be restored in July of 2015. House Republicans want to advance this date to April 1 of this year. The revenue loss of $167.6 million will be offset by using excess revenue.
“A savings, regardless of how big or small, goes a long in this economy. This will provide a welcome relief to working families and increase sales for businesses,” said Rep. Molgano.
Eliminating Special Assessment on businesses for the state unemployment fund:
This proposal will use excess revenue to pay the interest on money borrowed from the federal government to cover unemployment benefits. So far this special assessment has cost businesses in the state $71 million since 2010.
“Businesses in Connecticut have unfairly been asked to pick up the bill on something they did not initiate. If businesses prosper, than our economy prospers. This proposal allows the assessment to happen and removes an unnecessary burden from business owners. ” said Rep. Molgano.
Restoring tax exemption on non-prescription drugs:
This proposal will restore the exemption starting April 1, 2014. The revenue loss will be offset by the use of excess revenue and by keeping the Earned Income Tax Credit at the current 25% level.
“I consider the split between the payment of future debt and tax savings passed on to residents and businesses to be an equitable and responsible decision. We must be fiscally responsible and mitigate debt, but we should return to the taxpayers what is rightfully theirs,” said Rep. Molgano.