by Christian Wade
Connecticut Gov. Ned Lamont is pitching a plan to cut state income taxes for middle-class workers as part of his budget plan for the next fiscal year.
Lamont’s proposal, unveiled Monday, calls for permanently lowering the personal income tax rate on single filers’ first $10,000, and $20,000 for joint filers of adjusted gross income from 5% to 4.5%, and the rate on income up to $50,000, and $100,000 for joint filers from 3% to 2%, beginning in 2024. The move, if approved, is projected to save taxpayers $440 million annually.
Depending on adjusted gross income, some joint filers could receive almost $600 in income tax relief and single filers could save almost $300, according to Lamont administration.
Overall, an estimated 1.1 million of the state’s 1.7 million tax filers would get some relief under the plan.
Lamont said the proposal, which he plans to include as part of his preliminary budget, would be the first — and largest — state income tax cut in nearly three decades. He said the state is emerging from the COVID-19 pandemic in a strong fiscal position, ending the previous fiscal year with a record surplus of $1.3 billion.
“Connecticut’s fiscal health is stronger than it’s been in decades,” he said. “Considering the state’s strong financial position, it is time to provide tax relief for Connecticut’s residents.”
Lamont won a term in the Nov. 8 elections after defeating Republican businessman Bob Stefanowski in a campaign that focused in part on the Northeast state’s high cost of living.
He has proposed a buffet of tax cuts in his preliminary budget package, set to be formally unveiled Wednesday, including a plan that calls for permanently increasing the state’s Earned Income Tax Credit from 30.5% to 40%, which would allow low income workers to receive another $44.6 million in state tax credits.
He also pitched a plan to restore Connecticut’s pass-through entity tax credit back to its original level of 93.01%, allowing certain business owners to claim a larger credit on personal income tax returns.
Lamont said the changes, if approved, will cut taxes for more than 120,000 small and mid-sized businesses, saving them as much as $60 million a year beginning in 2024.
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Christian Wade is a contributor to The Center Square.
Photo “Ned Lamont” by Office of Governor Ned Lamont. Background Photo “Connecticut State Capitol” by EGryk. CC BY-SA 4.0.
