Senate bill 35 is one of three bills in Hartford proposing to raise the top rate on capital gains from the current 6.99% to 7.99% in order to add money for education and other social programs.
Lamont has taken a firm stance against tax increases, even though his democratic colleagues want this. Fortunately, the Democrat majority in the House does not have enough votes (need 2/3 majority) to override a veto by the Governor. Governor Lamont and top lawmakers in Hartford are expected to make final decisions on budget and spending for the 2025 fiscal year by May 8.
If you earn more than $500,000, you pay the lion's share of state taxes. For example in 2020, the top 2% of earners (over $500,000) paid 40% of taxes. The conservative Yankee Institute said the state should tighten spending instead of trying to find more revenue from increasing taxes. They called for reducing regulations on small and mid-sized businesses. "The answer to CT's fiscal challenges cannot always be found in someone else's pocket.
No wonder CT has many Florida plates and so few venture-backed companies. In plucking CT's golden geese, many of them fly the coop. The state has 69,000 part-time residents who live less than 6 months in CT for tax reason by having a primary residence in places like Florida and South Carolina. Also high capital gains taxes make CT unattractive to venture-backed companies who rely more on capital gains from stock appreciation and less on income.
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