An Act Exempting Social Security Benefits And Pension Or Annuity Income From The Personal Income Tax.
If enacted, SB00735 would amend Section 12-701 of the general statutes, directly impacting the state's approach to income taxation. By removing these income sources from the taxable income base, the bill may decrease overall state revenue from personal income taxes, which could lead policymakers to adjust budgets or explore alternative revenue sources. The bill's proponents argue that the economic benefits derived from increased disposable income for retirees will stimulate local economies, especially in communities with significant elderly populations.
SB00735 aims to amend state tax laws by exempting Social Security benefits and pension or annuity income from personal income tax across all taxpayers. Introduced by Senator Sampson and Representatives Dauphinais and Mastrofrancesco, the bill is positioned as a means to alleviate financial burdens on retirees and seniors, ensuring that their essential income sources are not taxed. The intent is to provide greater financial security to individuals relying on these forms of income after retirement, promoting a more favorable economic environment for the elderly population.
Debate surrounding this bill may center on the implications of reducing personal income tax revenue. Critics may raise concerns about the potential fiscal strain on the state's budget, questioning whether such tax exemptions are sustainable in the long term. Furthermore, there might be discussions around equity, with some arguing that tax relief should be targeted rather than broadly applied to all taxpayers, potentially raising issues related to wealth distribution and fairness in taxation.