Connecticut lawmakers propose new tax rates for high-income earners

On April 9, 2025, the Connecticut State Legislature introduced House Bill 7272, a significant piece of legislation aimed at reforming the state's income tax structure. This bill seeks to address growing concerns about tax equity and the financial burden on middle- and lower-income residents, while also generating additional revenue for essential public services.

The primary focus of House Bill 7272 is to adjust the income tax brackets and rates for Connecticut residents. Under the proposed changes, taxpayers with adjusted gross incomes exceeding $50,250 would see a reduction in the income amount subject to the lowest tax rate of 2%. This adjustment is designed to alleviate some of the tax burden on those earning just above the threshold, effectively shifting a portion of their taxable income to a higher rate of 4.5%. Additionally, the bill introduces incremental tax increases for higher earners, with those making over $200,000 facing a new surcharge that could add up to $250 to their tax bills.

The bill has sparked notable debates among lawmakers and constituents alike. Proponents argue that the changes are necessary to create a fairer tax system that better reflects the financial realities faced by many residents. They emphasize that the additional revenue generated could be directed toward critical areas such as education, healthcare, and infrastructure. However, opponents raise concerns about the potential impact on high-income earners and small businesses, fearing that increased taxes could drive wealthier residents out of the state and hinder economic growth.

The implications of House Bill 7272 extend beyond mere tax adjustments. Economists suggest that a more equitable tax system could lead to increased consumer spending, as lower-income residents typically spend a higher percentage of their income. This could stimulate local economies and support job growth. Conversely, critics warn that the bill could exacerbate the existing divide between income groups if not carefully implemented.

As the legislative process unfolds, the future of House Bill 7272 remains uncertain. Lawmakers will need to navigate the complexities of public opinion and economic forecasts to determine the bill's fate. For Connecticut residents, the outcome could significantly influence their financial landscape and the availability of vital public services in the years to come.