An Act Phasing Out The Personal Income Tax On Social Security Income.
Impact
If enacted, this bill would directly amend Chapter 229 of the general statutes concerning personal income taxation. The removal of taxes on Social Security income is expected to alleviate the financial burden on retirees, allowing them more disposable income. By focusing on social equity and combating poverty among the elderly, the bill aligns with broader goals of improving the living conditions for senior citizens in the state.
Summary
House Bill 05338 aims to phase out the personal income tax on Social Security income. The proposed legislation seeks to provide financial relief to senior citizens by eliminating the taxation of their Social Security benefits. The bill is introduced with the intent to improve Connecticut's tax competitiveness compared to other states where such income might not be subject to personal income tax. This could encourage retired individuals either to remain in Connecticut or to relocate to the state, positively impacting the local economy.
Contention
Despite its potential benefits, the bill presents points of contention among lawmakers and constituents. Critics may argue that phasing out the income tax on Social Security could lead to a decrease in state revenue, which is critical for public services and funding. Additionally, there may be concerns regarding the fairness of tax policies that favor specific demographics over others, leading to discussions about equity and the distribution of tax burdens across different groups within Connecticut's population.