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HB 5771

AN ACT ESTABLISHING A CAPITAL GAINS SURCHARGE.

2025 Regular Session Introduced by Jorge Cabrera and 8 co-sponsors

Connecticut bill would impose additional tax surcharge on capital gains income to generate state revenue, potentially affecting investment activity and wealth-building.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#capitalgainsanddividendstax
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WeVote Research Nonpartisan
Bill Summary · HB 5771

Legislative bill overview

HB 5771 would establish a surcharge on capital gains income in Connecticut, creating an additional tax layer on top of existing state income taxes for investment profits. The bill was introduced by five Democratic legislators and referred to the joint Finance, Revenue and Bonding committee on January 21, 2025.

Why is this important

Capital gains taxes directly affect investment income and wealth accumulation, making this a significant fiscal and economic policy issue. Connecticut faces ongoing budget pressures, and a capital gains surcharge could generate new state revenue while raising questions about investment incentives and economic competitiveness.

Potential points of contention

  • Economic competitiveness: Higher capital gains taxes may discourage investment activity or encourage relocation of wealthy individuals and businesses to lower-tax states
  • Regressivity concerns: Whether capital gains surcharges effectively target wealthy individuals or inadvertently affect middle-class retirement savings, mutual funds, and investment accounts
  • Revenue reliability: Capital gains income fluctuates significantly with market conditions, creating uncertain and volatile revenue streams for state budgeting

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

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