Reduces the rates and adjusts the brackets for purposes of calculating individual income tax and provides relative to certain tax credits and deductions (Items #3, 18, and 26) (OR INCREASE GF RV See Note)
Impact
If enacted, HB 48 is expected to adjust state tax revenue dynamics due to the reduction in individual tax liabilities for certain income levels. The changes to the earned income tax credit aim to provide further financial relief to qualifying residents, which could enhance disposable income for lower-income families. The bill facilitates a temporary tax relief strategy, which proponents argue would stimulate economic activity and benefit state residents during the specified period.
Summary
House Bill 48 proposes a reduction in individual income tax rates and adjustments in the tax brackets for individuals, commencing January 1, 2017. The bill aims to make significant changes by lowering the tax rates across various income brackets, effectively starting a three-year implementation that would revert back to previous rates after December 31, 2019. Additionally, the bill disallows deductions for excess federal itemized personal deductions during this period while also increasing the earned income tax credit, making it more favorable for low to moderate-income earners.
Sentiment
The general sentiment around HB 48 appears supportive from those advocating for tax relief, particularly among families and individuals who qualify for the earned income tax credit. However, there is an acknowledgment of contention, especially concerning the repeal of deductions for excess federal itemized personal deductions, as this could affect a significant aspect of individual tax filings for many residents. Advocates believe the bill’s benefits outweigh potential drawbacks, while critics worry about the long-term fiscal implications.
Contention
Notable points of contention surrounding the bill focus on its dual effects of providing tax reduction while simultaneously removing certain deductions. Stakeholders have expressed concern regarding the potential impacts on higher-income individuals and the overall state tax revenue after the sunset period. Opponents argue that the removal of the excess federal itemized deductions could disproportionately harm taxpayers who benefit from such deductions, contributing to a nuanced debate on economic fairness and tax structures.
Reduces the rates and adjusts the brackets for purposes of calculating individual income tax and provides relative to certain deductions (Items #3 and 19) (OR SEE FISC NOTE GF RV)
Changes the rates and brackets for purposes of calculating individual income tax liability and eliminates certain deductions (Item #3) (RE1 SEE FISC NOTE GF RV See Note)
Changes the rates and brackets for purposes of calculating individual income tax liability and eliminates certain deductions and credits (EG +$+30,200,000 GF RV See Note)
Reduces the rates and brackets for purposes of calculating individual income tax liability and the tax liability for estates and trusts and modifies certain income tax credits, exemptions, and deductions (OR +$172,000,000 GF RV See Note)
Changes the rates and brackets for purposes of calculating individual income tax liability and eliminates certain deductions and credits (EG +$21,000,000 GF RV See Note)
Changes the rates and brackets for purposes of calculating individual income tax liability and eliminates certain deductions and credits (RE +$5,000,000 GF RV See Note)
Changes the rates and brackets for purposes of calculating individual income tax liability and eliminates certain deductions (Items #40 and 43) (EG +$25,000,000 GF RV See Note)
Changes the rates and brackets for purposes of calculating individual income tax liability and eliminates or modifies certain deductions, exemptions, and credits (EG DECREASE GF RV See Note)
Provides for a flat tax rate for purposes of calculating individual income tax, increases the amount of the earned income tax credit, and modifies other income tax credits and deductions (RE +$5,000,000 GF RV See Note)
An Act Concerning A Municipal Tax Abatement For Surviving Domestic Partners Of Police Officers, Firefighters And Emergency Medical Technicians And Allowing A Personal Income Tax Deduction For Stipends Paid To Volunteer Firefighters, Volunteer Fire Police Officers And Volunteer Ambulance Members.