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.
The revenue generated from the increased tax rates and the capital gains surcharge is earmarked for several child-related and community initiatives. This includes a child tax credit of six hundred dollars per dependent child, which is intended to provide financial relief to families. Furthermore, the bill establishes a cap on municipal mill rates at 35 mills and mandates reimbursements to municipalities for any revenue losses resulting from this cap. Lastly, it allocates support for debt-free community college programs and public institutions of higher education within the state.
House Bill 05113 proposes to increase the highest marginal rate of the personal income tax in Connecticut for high-income earners and establishes a capital gains surcharge. Specifically, the bill aims to increase the highest marginal income tax rate by one percent for individuals earning over one million dollars and two percent for those with incomes exceeding two million dollars. Additionally, it seeks to implement a four percent surcharge on net gains from the sale or exchange of capital assets.
While the bill provides significant funding for child welfare and education initiatives, it has potential contention points, particularly concerning how tax increases might affect high-income earners and the overall economic landscape in Connecticut. Critics may argue that raising taxes on high earners could discourage investment and economic growth. Supporters, on the other hand, stress the importance of funding for education and local municipalities, positing that these investments are critical for the state's long-term growth and stability. The debate surrounding this bill will likely highlight differing perspectives on taxation, revenue distribution, and community support.