An Act Eliminating The Imposition Of The Personal Income Tax On Pension Benefit Income.
Impact
The elimination of the income tax on pension benefits is expected to have a significant impact on retirees, allowing them to retain more of their income. Proponents argue that this will encourage retired individuals to remain in the state, supporting local economies and demographics. Additionally, the bill could assist in attracting new residents by making Connecticut a more attractive place for retirement, potentially offsetting some losses in tax revenue through enhanced consumer spending by pensioners.
Summary
House Bill 5745 aims to eliminate the personal income tax on pension benefit income in Connecticut. Introduced by Representative Berthel, the bill seeks to amend Chapter 229 of the general statutes to ensure that residents receiving pension benefits are no longer subject to state income tax. This move is anticipated to provide financial relief to retirees and promote a more favorable environment for those living off their pensions.
Contention
Despite its potential benefits, the bill may also face contention regarding its long-term financial implications for the state. Opponents may raise concerns about the potential decrease in overall state revenue, which could impact funding for essential state services such as education and healthcare. Furthermore, critics might argue that the benefits of the tax elimination primarily favor affluent retirees, thereby neglecting the needs of working-class citizens who contribute significantly to the state's tax base.