Connecticut House Bill HB05289

Connecticut 2021 Regular Session

• Introduced: 1/22/21
• Refer: 1/22/21

Caption

An Act Adjusting Personal Income Tax Rates For Taxpayers Above And Below Certain Income Thresholds.

Impact

If enacted, HB05289 would represent a significant shift in the state's tax policy, particularly benefiting low and middle-income earners while increasing the tax burden on higher earners. This change is intended to create a fairer tax system by lowering rates for those with lower adjusted gross incomes and ensuring that higher earners contribute a larger share of their income in taxes. The bill aligns with broader movements toward tax reform that seeks to alleviate financial pressures on working families while addressing equity among taxpayers.

Summary

House Bill 05289 aims to amend the state's personal income tax rates, establishing new rates for individual taxpayers and married couples filing jointly based on their adjusted gross incomes. The proposed changes include reducing the income tax rate from five percent to four percent for individuals earning between ten thousand to fifty thousand dollars and also for married couples within that income range. For individuals earning between fifty thousand and one hundred thousand dollars, the tax rate would decrease from five and a half percent to five percent. Conversely, the bill also proposes an increase in the tax rate for high-income earners, specifically raising the rate from six and ninety-hundredths percent to eight and ninety-hundredths percent for those making over five hundred thousand dollars and for married couples earning over one million dollars.

Contention

Notably, the bill may face contention from various political and economic groups. Supporters of the bill argue that lowering tax rates for lower and middle-income individuals will provide needed relief and stimulate local economies as these earners tend to spend a higher percentage of their income. On the other hand, critics may argue that increasing the tax rates for high-income individuals could drive affluent residents out of the state or discourage business investment. The debate surrounding HB05289 will likely center on issues of economic equity and the possible repercussions on the state's revenue considering the changes in tax rates.