An Act Concerning An Exemption From Income Tax For Pension Income.
Impact
If enacted, this bill would significantly affect state revenue as it would reduce the taxable income for a considerable number of residents who rely on pensions as a primary source of income. The exemption could encourage more people to move to or remain in the state, seeing it as a favorable environment for retirees. However, this loss in revenue could lead to budgetary constraints for funding public services, such as education and public health, which rely on income taxes for support.
Summary
House Bill 05553 seeks to amend Chapter 229 of the general statutes to exempt pension income from personal income tax. This legislative proposal is designed to alleviate the financial burden on retirees by ensuring that their pension income is not subject to state taxation. The intent of the bill is to provide a measure of financial relief for individuals who have already planned their retirement on the basis that pension payments would not be taxed, thereby promoting economic stability among the elderly population.
Contention
Contentions regarding HB 05553 may arise from differing opinions on tax equity and the implications of tax exemptions on government funding. Proponents of the bill argue that it is a justifiable measure to support retirees, enhancing their financial security and contributing to their quality of life. Conversely, opponents may critique the potential inequity of providing tax breaks to a specific demographic while possibly placing an increased tax burden on those who do not receive pensions or who are still actively contributing to the workforce.