Rep. Bacchiochi, House Republicans announce tax relief effort

HARTFORD – State Rep. Penny Bacchiochi (R-52) and House Republican leaders today announced their new effort to save consumers $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 proposal will cost an estimated $247 million, covered through current available funds and will not add to the current budget deficit.

“Connecticut’s taxpayers deserve relief,” Rep. Bacchiochi said. “Our small businesses need it, our consumers need it, and frankly, our economy needs it. This proposal will give a boost to our residents who have been burdened by the largest tax hike in state history because of the administration and majority party’s rule.”

Restoring the tax exemption on clothes and footwear:

• The clothing and footwear exemption for items under $50 , projected to cost $167 million, is slated to be restored  in July of 2015. House Republican Leader Larry Cafero said that it is prudent to advance that timeline to April 1 of this year - Democrats took away the exemption in 2011 while attempting to balance the budget. The exemption will increase sales and help businesses meet their bottom lines. “This is the definition of a middle class tax cut,’’ Cafero said.

Eliminating Special Assessment on businesses for the state unemployment fund:

• Cafero said pre-paying the interest of $59 million on money borrowed from the federal government to cover unemployment benefits at the height of the recession will spare businesses from having to again foot the bill. Businesses, many of whom did not layoff a single worker, have been saddled with three consecutive special assessments to cover the interest, costing them $71 million since 2010.

Restoring tax exemption on non-prescription drugs:

• Restoring the sales tax exemption for over-the-counter drugs that Gov. Malloy eliminated in 2011 will also be “revenue neutral.’’ Republicans proposed covering that loss of revenue of $21 million by keeping the Earned Income Tax Credit at the current rate of 25 percent of what a person would receive from filing their federal Earned Income Tax Credit returns. The rate is scheduled to go up to 30 percent of the federal rate over the next two years.