Seeking to create jobs, the Senate Democrats issued a four-pronged proposal Monday to kick-start the economy and eliminate the $250 business entity tax for small businesses for two years.<\/p>\n
Multiple senators gathered at a West Hartford dry cleaner to make their point about helping “mom and pop” stores. The cleaner – owned by Dana Gordon – was filled with clothes, but some insiders believe there were no stuffed shirts there Monday.<\/p>\n
“Sedgwick Cleaners – which is my dry cleaner – is an example of a small business that keeps a community alive,” said Senator Jonathan Harris, a West Hartford Democrat. “And this bill helps keep small businesses alive. Dana is a Rotarian like me, he sponsors youth sports, and he advertises local events in his storefront window. Besides creating jobs, he is a vital part of the West Hartford community. And we need to protect and grow these types of businesses.”<\/p>\n
Sen. Donald Williams, the highest-ranking senator, noted that many companies pay the business entity tax – and it is not directly related to how much profit a company earns. The money needs to be paid “regardless of whether you’re UTC or Sedgwick Dry Cleaners,” Williams said.<\/p>\n
Overall, the state collects $38 million per year from the tax, but the entire amount would not go back into the economy because only “mom and pop” businesses would be eligible for the tax cut. More than 100,000 businesses – from landscapers to painters to dry cleaners – currently pay the tax, officials said.<\/p>\n
While $250 is a small sum for many businesses, the money could go toward the dry cleaner’s monthly utility bill of $900, Democrats said.<\/p>\n
Sen. Edith Prague, an outspoken Democrat, said, “Small businesses provide the foundation for every community and provide the backbone for our state’s economy. For the duration of this downturn, we must help them retain their vitality in any way we can. The plan we’ve introduced today will help them retain and perhaps create new jobs – to the benefit of employees in the short term and to the benefit of our overall economic health for the longer term.”<\/p>\n
The Democratic plan would be paid through a temporary, two-year surcharge on wealthy Connecticut residents who receive huge bonuses from Wall Street firms that received federal bailout money.<\/p>\n
This would include employees of Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Citigroup, which all have bonus pools in the billions of dollars.<\/p>\n
The tax would be imposed only on bonuses of $1 million or more – at a top Connecticut income tax rate of 8.97 percent, which is the same as the highest rate in New York State.<\/p>\n
“It’s almost a concept of restitution – taking it back from Wall Street and giving it to businesses on Main Street,” Williams said.<\/p>\n
While tax filers do not write the name of their employer on their federal or state tax forms, the names of the companies can be tracked back through W-2 forms and employer-identification numbers – which must be filed with the IRS and the state tax department. As such, tax authorities can find out which Connecticut residents work for Goldman Sachs and other large firms. <\/p>\n","protected":false},"excerpt":{"rendered":"
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