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HB 5185

AN ACT ESTABLISHING A CAPITAL GAINS AND DIVIDENDS SURCHARGE.

2026 Regular Session Introduced by Patrick Biggins and 34 co-sponsors

Connecticut bill proposes new surcharge tax on capital gains and dividends to increase state revenue from investment income.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#capitalgainsanddividendstax
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Bill Summary · HB 5185

Legislative bill overview

HB 5185 proposes establishing a surcharge tax on capital gains and dividend income in Connecticut. The bill would impose an additional tax burden on investment returns above certain thresholds, with revenue presumably directed to state coffers. The specific rate and income thresholds are not detailed in the title alone.

Why is this important

Connecticut faces ongoing budget pressures and structural deficits, making new revenue sources a persistent policy concern. How investment income is taxed affects both state finances and individual wealth accumulation, particularly influencing middle-class retirement savings and high-net-worth individuals differently. This proposal directly engages the state's tax structure and could influence investment decisions and residency patterns.

Potential points of contention

  • Economic competitiveness: Neighboring states without such surcharges may attract residents and businesses; high-earning individuals and retirees could relocate
  • Investment behavior impacts: Additional taxes on capital gains may reduce investment activity, affect stock market participation among middle-class savers, and influence business expansion decisions
  • Equity concerns: Debate over whether this is progressive taxation (targeting wealth concentration) or regressive in practice (affecting retirement accounts and pension distributions), and whether it burdens those living on fixed investment income

Compiled from official sources — confirm details with the bill’s official record.

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