Connecticut House Bill HB05056

Connecticut 2017 Regular Session

• Introduced: 1/4/17
• Refer: 1/4/17

Caption

An Act Phasing Out The Personal Income Tax On Pension Benefit Income.

Impact

The implementation of HB 05056 would significantly alter the state's tax code regarding retirement income. By exempting public and private pension income from taxation, the state may experience a change in revenue dynamics, with potential short-term reductions in tax income from this source. However, the long-term implications could include an increased willingness among retirees to settle in or remain in the state, potentially fostering economic growth and demographic stability.

Summary

House Bill 05056 aims to phase out the personal income tax on pension benefit income in a structured timeline over five years. The bill specifies a gradual increase in the exemption percentage, starting at 10% in the first year and reaching a full exemption of 100% by the fifth year. This legislative proposal seeks to provide financial relief to retirees by allowing them to keep a greater portion of their pension income, thereby encouraging more favorable economic conditions for seniors.

Contention

Although the intent of HB 05056 is to assist retired individuals financially, there may be points of contention concerning the potential loss of revenue for state services, such as education and infrastructure. Critics may argue that this bill disproportionately benefits individuals with larger pension incomes, leading to inequities among residents, especially those who do not receive pension benefits. The discussions surrounding this bill likely touch on broader themes of tax fairness and the allocation of state resources.