Connecticut raises tax rates for incomes over $200,000 in proposed legislation

The Connecticut State Legislature introduced House Bill 7272 on April 9, 2025, aiming to reform the state's income tax structure. The bill proposes a tiered tax rate system that adjusts the tax burden based on income levels, with specific provisions for married couples and surviving spouses.

The main purpose of House Bill 7272 is to create a more equitable tax system by adjusting tax rates for different income brackets. Under the proposed structure, individuals earning up to $20,000 would face a tax rate of 2%, while those with incomes exceeding $1 million would be taxed at a rate of 6.99%. Notably, the bill includes a mechanism to reduce the taxable income for higher earners, ensuring that the lowest tax rate applies only to those with adjusted gross incomes below $100,500.

Debate surrounding the bill has focused on its potential impact on middle-class families and high-income earners. Proponents argue that the changes will alleviate financial pressure on lower-income residents, while critics express concern that the adjustments could lead to increased taxes for some middle-income households. Amendments to the bill have been proposed to address these concerns, but discussions remain ongoing.

The economic implications of House Bill 7272 are significant, as it seeks to balance the state's budget while addressing income inequality. Experts suggest that if passed, the bill could lead to increased revenue for state programs, but it may also prompt some high-income residents to reconsider their residency in Connecticut due to higher tax rates.

As the legislative session progresses, the future of House Bill 7272 remains uncertain. Lawmakers will continue to debate its provisions, and further amendments may be introduced to refine its impact on Connecticut's diverse population. The outcome of this bill could reshape the state's tax landscape and influence economic conditions for years to come.