Connecticut House Bill HB05175

Connecticut 2010 Regular Session

• Introduced: 2/11/10
• Refer: 2/11/10

Caption

An Act Imposing A Tax On Bonuses Received By Employees Of Businesses That Received Funds Under The Troubled Asset Relief Program.

Impact

If enacted, HB05175 would amend existing income tax laws to include these specific tax provisions regarding bonuses. The intent is not only to generate additional state revenue but to invoke a sense of accountability among employees of firms that received government financial assistance. By targeting bonuses specifically, the bill seeks to mitigate perceptions of unfairness surrounding excessive compensation in sectors that contributed to the financial crisis.

Summary

House Bill 05175 proposes to impose a 90% tax on bonuses received by employees of businesses that benefitted from the federal Troubled Asset Relief Program (TARP). This legislation arises in the context of the financial crisis, aiming to ensure that those employees, who received substantial bonuses, contribute to the economic recovery. The bill establishes thresholds for taxable income, setting it at $125,000 for individuals and $250,000 for couples filing jointly, focusing on high-income earners who are perceived to have disproportionately benefited during the economic downturn.

Contention

However, the bill may face significant opposition. Critics argue that the proposed tax could discourage talent retention in the finance sector, potentially leading to a 'brain drain' as top earners seek employment in states with more favorable tax climates. Further, there are concerns about the fairness and effectiveness of imposing such a steep tax rate, which some may view as punitive. This debate could center around broader questions of economic equity and the role of taxation in promoting or hindering recovery efforts.