It’s ‘should,’ not ‘could’
With the turn of the fiscal year, the City of West Haven altered a tax – at least it is called a tax – on the sale of property. A “Conveyance Tax” is charged with a percentage of the total sale per thousand dollars going both to the state and the city. Originating in 1967, according to the state’s website, the conveyance tax is, simply stated, payment for paperwork mandated by the state to execute the sale.
Properly understood, the conveyance tax is another way of getting more money out of the sale of property than just sales taxes or other levies. Why does the state demand sellers pay conveyance taxes? Because it can. It is another revenue stream, pure and simple. The state demands certain papers, papers it charges do get completed, and then charges again for it having the onerous task of filing those papers and finalizing the work. Call it “nickel and diming” residents for more money.
Cities get into the act under the current regulations by charging a quarter-percent per thousand dollars of actual sales, collecting the state’s share, and sending it to Hartford each month, while pocketing its take. Late last year, West Haven asked for, and received, permission to create an Enterprise Zone along the West River corridor in Allingtown along Front Avenue and extending toward the harbor.
Now an Enterprise Zone entices commercial and industrial developers to come into the area with the only carrot to dangle before them: tax breaks. The new zone along the West River would give potential developers multi-year tax breaks. The trade off is the new endeavors will create jobs and help the city’s Grand List grow, thus bringing tax burdens down.
Under the conveyance tax law, cities with Enterprise Zones can hike its share of the levy from .25 percent per thousand dollars of sale to .50, or a 100 percent increase. The city announced late last month it was doing just that. Sellers of real estate property will now shell out hundreds of dollars more to have the luxury of selling their property. The new tax is expected to bring in about $500,000 in new revenue.
In our questioning on this story, which appears in today’s edition, we understood the law and the reasoning. We see a conveyance tax as nothing more than an attempt at the state and the city to take one more bite of the taxing apple. It is a nuisance tax and preys upon sellers. But it is not the only one. The state is learning to add this little levy on other things to bloat its coffers.
In our questions we posed this: No one is questioning the city’s RIGHT to raise the tax, but we wonder about whether it SHOULD. West Haven residents are taxed to death, and the state squeezes as much as it can to keep special interests happy. What we wanted was an assessment of the morality of raising the tax.
Interestingly, no one who answered our questions even attempted to tackle that issue. “Legal” does not equate to “moral.” The city had a right to do it and did. It will get more money out of the tax and will use it to benefit the masses.
If we read as a bit miffed by the new tax, we are. Places like Connecticut will find a new way to tax sooner than look for a way to save. No thought is given to its affect on taxpayers, nor the morality of the hike itself. The only thought is how much more money can be raked into the treasury to create more dependence and a new constituency.
People are leaving the state in droves. The recent decision by West Haven is a reason why.