An Act Increasing The Estate Tax Exemption.
This increase aligns the state estate tax exemption more closely with the federal exemption, providing what proponents characterize as tax equity for Connecticut residents. By matching the federal exemption, the bill aims to alleviate financial burdens on families during the transfer of wealth, potentially reducing the number of estates subject to Connecticut estate taxes. The overall fiscal impact on state revenues is dependent on the number of estates affected by the changes, which could lead to reduced state tax collections.
SB00005 proposes an increase in the Connecticut estate tax exemption, amending section 12-391 of the general statutes. The bill stipulates that the exemption would increase incrementally from two million dollars to five million four hundred ninety thousand dollars over three years. The adjustments would apply to estates of decedents dying on or after January 1, 2018, with the first increment set at three million dollars, followed by four million dollars, and finally reaching the full amount in 2020.
Debate surrounding SB00005 may center on the implications for state tax revenue and fairness. Supporters argue that the increase is essential for easing the tax burden on middle- and upper-middle-class families, promoting fairness in wealth transfer taxation. However, opponents might express concern that the reduction in tax revenue could limit the state's ability to fund essential services, portraying the bill as a benefit primarily to wealthier estates. This dichotomy reflects broader discussions about tax policy priorities and social equity.