HARTFORD, CT – State Senator William H. Nickerson (R-Greenwich) and State Representative Craig Miner (R-Litchfield), ranking members on the General Assembly’s Finance, Revenue and Bonding Committee, today objected to the Democrats’ 2008 tax plan which has unfolded in piecemeal fashion before the Finance Committee over the past two days.

“In these uncertain economic times it is inappropriate for the Democratic Caucus to be talking about new spending proposals and new taxes,” said Senator Nickerson. “This year’s revenue projections are at best tenuous and we will not have a complete economic picture until the April 15th tax returns are in. In the meantime, we as a legislature should be looking for ways to reduce spending and provide incentives that will help create jobs and ensure our state’s long-term economic security.”

The legislators cited the abandonment of the Business Entity Tax repeal and several tax increases, including a new sales tax on delivery charges and a new Homestead Exemption, as the primary reasons for their opposition.

“As recently as February, there was significant bipartisan support for repealing the burdensome Business Entity Tax,” said Representative Miner. “This about-face by Democratic leaders is misleading and misguided. Repealing this tax would be an investment in our state’s small businesses and their ability to create jobs and grow our economy.”

Under the Democratic proposal, the Delivery Sales Tax would apply a 6% tax to the delivery charge of goods including but not limited to, documents, products and groceries.

Representative Miner said, “I believe that unless this new tax is specifically and very narrowly defined it is a significant tax capable of raising hundreds of millions of new tax dollars for new programs the state can ill afford. It’s implication on both the business community and consumers could be widely felt”.

The Homestead Exemption allows homeowners to exempt the first $100,000 of assessed property value from their property tax assessments. The Republican leaders said the exemption will result in a major tax shift with small businesses footing the bill.

For those reasons, Senator Nickerson said the tax package sends the wrong message to Connecticut businesses. He and Representative Miner said Republicans will continue to fight for long-term structural changes to our tax code that will encourage job creation and economic growth. These proposals include expanding the Job Creation Tax Credit to Small businesses and repealing the Business Entity Tax.

Under existing law passed in 2007, the credit is available to Connecticut C-corporations that create 10 or more net new jobs in a year. Qualifying businesses approved by the Department of Community and Economic Development (DECD) receive a tax credit equal to 60% of each new worker’s state withholding tax. Republicans have proposed extending the benefit to all businesses and applying the credit annually for every net new job created

Republicans have been working to abolish the $250 annual Business Entity Tax since its inception in 2002, most recently as part of the 2007 No Tax Increase Budget Proposal. A Republican amendment that included the elimination of the Business Entity Tax failed last year on a 12-24 party-line vote in the Senate. A similar amendment failed in the House.