An Act Restructuring Certain Taxes.
The bill also seeks to impose a nineteen percent surcharge on investment management services fees, targeting significant revenue generation from high-income earners and the financial sector. Another major provision is the increase in the highest marginal tax rates on personal income for high-earning individuals, which will be adjusted across various income thresholds drastically. Meanwhile, small businesses could also feel the impact of a new ten percent tax on annual gross revenues derived from digital advertising services for businesses exceeding ten billion dollars in worldwide revenues, which may influence corporate strategies in advertising.
House Bill 05147, titled 'An Act Restructuring Certain Taxes,' aims to amend various tax statutes to establish new surcharges and credits aimed at generating revenue for the state of Connecticut. Key provisions of this bill include the introduction of a five percent surcharge on net gains from the sale or exchange of capital assets for higher-income taxpayers, with the generated revenue earmarked specifically for supporting public institutions of higher education. Additionally, the bill proposes a child tax credit of $500 for nonrefundable and $400 for refundable credits, applicable to up to three dependent children, thereby expanding financial support for families.
Notably, this bill has generated significant debate among legislators. Proponents argue that restructuring the tax framework is essential for ensuring sustainable funding for education and supporting families economically. Critics, however, raise concerns regarding the potential negative impact on businesses, specifically those in the investment management and digital advertising fields, suggesting that such increased taxes could drive operations out of state and dissuade future investments. The balance between enhancing educational funding and maintaining a competitive tax environment remains a contentious point of debate.