An Act Exempting Social Security Benefits From The State Income Tax.
Impact
If enacted, HB06374 would have a considerable impact on state revenue, as it would eliminate a source of income tax that contributes to the state's budget. Proponents of the bill argue that this exemption is necessary to assist residents, particularly the elderly who often live on fixed incomes. They believe that relieving the tax burden will lead to increased disposable income for retirees, which they can spend in the local economy. However, this potential loss of revenue could lead to budgetary challenges in funding state services.
Summary
House Bill 06374, proposed by Representative Bolinsky, aims to amend chapter 229 of the general statutes in order to exempt Social Security benefits from state income tax. The bill's primary intention is to provide financial relief for retirees who rely on these benefits as a significant part of their income. By exempting Social Security benefits from taxation, the bill seeks to enhance the financial security of the elderly population and support their continued participation in the local economy.
Contention
The bill may face contention centered around budgetary impacts and the equity of tax distribution. Opponents could argue that while the intent is to support elderly residents, the bill disproportionately benefits those who have higher Social Security incomes while potentially neglecting other important state funding needs. Additionally, there may be concerns about the long-term sustainability of state tax policy if significant portions of revenue are exempted, prompting discussions on fairness and budget prioritization in the legislature.