An Act Establishing Additional Personal Income Tax Brackets And Marginal Rates For Individuals With Connecticut Taxable Income Of Over One Million Dollars.
Impact
If enacted, HB 05665 would significantly impact the personal income tax framework in Connecticut, particularly affecting affluent residents. By imposing higher tax rates on the highest earners, state lawmakers intend to generate additional revenue that can be directed toward public services and infrastructure. Supporters of the bill argue that it could help address fiscal challenges and fund essential state programs intended to benefit all citizens. This change would not only increase tax contributions from wealthier individuals but could also promote social equity by redistributing wealth within the state.
Summary
House Bill 05665 proposes to alter the state tax structure by establishing additional personal income tax brackets and marginal rates specifically for high-income earners in Connecticut. The bill is designed to apply to individuals with taxable income exceeding one million dollars and introduces three new tax rates of 9.55%, 10.25%, and 10.65% for income thresholds of one million, ten million, and twenty-five million dollars, respectively. This move is aimed at ensuring a progressively fairer tax system, where those with greater financial capabilities contribute a larger share to state revenues.
Contention
While proponents of HB 05665 advocate for its potential to enhance state funding through higher taxes on substantial incomes, there is contention surrounding the implications of such a progressive tax policy. Critics, including certain lawmakers and economic advocates, argue that raising taxes on high-income earners could deter investment and lead to out-migration of wealthy residents seeking lower tax environments. They argue that the higher tax burden may ultimately harm the state’s economy by reducing incentives for entrepreneurship and job creation, raising concerns about balancing fiscal responsibility with competitiveness.
An Act Increasing The Highest Marginal Rate Of The Personal Income Tax And Establishing A Capital Gains Surcharge To Provide Funding For Certain Child-related, Municipal And Higher Education Initiatives.