Some Democrats in legislature want higher taxes on CT’s wealthiest, say plan would raise $171M a year

CT Post – Wednesday, April 16, 2025
By Ken Dixon

After years of trying to implement an investment surcharge on the state’s wealthiest, members of the legislative Tax Equity Caucus on Tuesday said that with massive federal budget cutting on the way, this may be the year.

The caucus, mostly made up of 30 Democratic House members with support from some in the Senate, including Senate President Pro Tempore Martin Looney, said that a one percent surcharge on the richest state residents could raise $171 million a year for a variety of social services that the state’s developmentally disabled, elderly and working poor rely on.

The group, gathered in the Legislative Office Building on Tuesday, also called for a permanent child tax credit and a major adjustment to the so-called fiscal guardrails of 2017 that could free up more than a billion dollars in surplus revenue. They called it a winning political formula that can help Democrats in coming elections and could still keep Connecticut taxes lower than most surrounding states at a time when a million residents receive federal Medicaid support for health and behavioral services.

In reaction, Republicans called the proposal a policy that would send residents packing for lower taxes elsewhere. House Minority Leader Vincent Candelora, R-North Branford, suggested that the legislature study the so-called benefits cliff, where people making the minimum wage and higher start losing eligibility for benefits including heating assistance, the Earned Income Tax Credit and SNAP food subsidies.

“We need to make these changes this year because we are not only seeing incredible amounts of dysfunction coming from the federal government, we want to show the people of Connecticut that we are elected as Democrats for a reason,” said Rep. Josh Elliott, D-Hamden, calling the policy economic populism.

“As we’re talking about tax equity and adjusting the fiscal guardrails, this is really looking at the totality of our budget,” said Rep. Jillian Gilchrest, D-West Hartford, co-chairwoman of the legislation Human Services Committee. “Are we going to continue to skimp on our bills or are we going to invest in our people? Now is the time to adjust the guardrails and make an equitable tax structure in the state of Connecticut.”

Last week, Speaker of the House Matt Ritter, D-Hartford, and House Majority Leader Jason Rojas predicted that a deepening federal crisis from the White House will result in the need to intercept more than a billion dollars before a June 30 deadline and they asked Gov. Ned Lamont to declare an emergency. Lamont said it’s too soon to announce an emergency.

Rep. Jason Doucette, D-Manchester, co-chairman of the legislative Banking Committee, said the proposed capital gains surcharge on the state’s top earners, could be used for a variety of initiatives and expenses including public education and the social safety net. Since he joined the General Assembly in 2019, a two-percent capital gains surcharge could have raised $2 billion.

“A two-percent capital gains surcharge would still keep us — for the top earners this is, single filers over a million dollars, joint filers two million dollars — would still keep us below the tax rates of our surrounding states,” Doucette said. “New York, New Jersey, Massachusetts, even the New England states of Vermont and Maine.”

Sen. Gary Winfield, D-New Haven, who has been in the legislature since 2009, said that the public policy discussion over what government can afford has been going on for a long time. He recalled Gov. Lamont talking about “equity” when he took office in 2019. “It means what we’re supposed to be doing now and fixing problems,” Winfield. “We’ve refused to talk about taxes pretty much the whole time. We’ve refused to talk about people who have the ability, but not just the ability, but the responsibility to pay their fair share.”

Looney, D-New Haven, said that he has long advocated for a separate tax limited to those earners in the state’s top two tiers — the 6.99 tier and the 6.9 tier — that would generate substantial, needed revenue and would not be a burden on high incomes. “It would still leave us as a moderately taxed state,” Looney said in an interview outside the Senate chamber. “Those people in those income brackets are going to see a tremendous federal tax cut, which is what Trump is punishing everyone for, to pay for the federal tax cut he is planning.”

Looney agreed with Ritter that the state is in an emergency situation as hundreds of millions of dollars in federal support are being withdrawn or threatened. In recent years and again this legislative session, Looney has proposed a so-called mansion tax, which would add mill rate increases on homes valued over three million dollars.

But Candelora, the veteran House minority leader, said that lower-wage workers find themselves in an economic bind because if they make a little too much money, they can be ruled ineligible for social benefits and health care for their families. “I’m always concerned about tax policies that tax our economic engines,” said Candelora of the latest iteration of the capital gains proposal.

He said that in recent years, state and local officials have attended more openings of things like Amazon warehouses, rather than precision manufacturing operations that could offer much higher-paying jobs. Candelora suggested that lawmakers research the “benefits cliff” where it makes less sense for a worker to take a job that can result in the end of health care and other programs for their families.

“That’s why I think people are taking only part-time jobs,” he said. “We need to incentive work and not create a cliff. How many people are unemployed or under-employed and not looking for work?”

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