Connecticut House Bill HB05310

Connecticut 2023 Regular Session

• Introduced: 1/13/23
• Refer: 1/13/23

Caption

An Act Adjusting Certain Personal Income Tax Rates And Income Thresholds.

Impact

The implications of HB 05310 are multifaceted. By lowering the income tax rate for a significant portion of the population, the bill could stimulate consumer spending and overall economic growth. The indexing of income thresholds to inflation may also protect taxpayers from being pushed into higher tax brackets due to inflation, which is often referred to as 'bracket creep'. This protection is particularly important for maintaining equity in the tax system and ensuring that tax liabilities reflect actual purchasing power.

Summary

House Bill 05310 proposes significant adjustments to personal income tax rates and thresholds in the state. Specifically, the bill aims to lower the income tax rate for taxpayers earning less than $175,000 to four percent. This change is intended to alleviate the financial burden on lower and middle-income families, providing them with increased disposable income. In addition to the rate adjustment, the bill mandates that income thresholds for personal income tax be indexed to inflation, ensuring that tax brackets and rates remain aligned with the economic realities faced by taxpayers over time.

Contention

While the bill has garnered support from various lawmakers seeking to ease financial pressures on constituents, it has also faced criticism. Opponents argue that the reduction in tax revenue could undermine funding for essential public services. There are concerns regarding how the state will maintain its budget and fund programs if tax revenues decline significantly due to the lowered rates. Discussions around balancing tax relief with sustainable state funding are expected to be key points of contention as the bill progresses through the legislative process.