The legislative session is still three weeks away, but there is early movement on bipartisan support for an income tax cut.
In an interview Monday with the Hartford Business Journal, Gov. Ned Lamont said he is considering several tax policy proposals next year, including a middle class income tax cut, likely targeted at joint filers who earn up to $150,000. He cautioned that his staff is still working on a budget proposal and things could change.
On Tuesday, House Minority Leader Vincent Candelora said Republicans will also pitch an income tax cut next session, mirrored after a similar GOP proposal put forward earlier this year.
In June, Republican state lawmakers pitched a $746 million tax cut proposal that would have reduced the income tax from 5% to 4% for individuals earning less than $75,000 and joint filers earning less than $175,000 annually.
Other tax cuts are likely to be pitched and debated in the upcoming session. For example, Lamont said he is also considering allowing the corporate business tax surcharge, which is set to expire Jan. 1, to sunset.
Candelora said the House GOP also wants to repeal the 1% tax on prepared meals and restore the small business pass-through entity tax credit to its original level.
All sides are being buoyed by the state’s recent fiscal stability, including a budget surplus and $3.3 billion rainy day fund.
Lamont has also expressed the importance of keeping the state’s fiscal house in order as a precondition to growth, and cautioned that any tax cut proposals will need to be negotiated with the state legislature.
The legislative session is scheduled to begin Jan. 4, and Lamont will deliver his budget to the General Assembly in February.
Lamont and the Democrat-controlled legislature last year approved a record $600 million in tax cuts, including increasing the child tax credit and cutting the maximum car tax rate from 42 mills to 32.46 mills.
Lamont said an income tax cut would be a cleaner, simpler policy than proposing additional rebates or tax credits. Candelora said he agreed with that philosophy.