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HB 5772

AN ACT REQUIRING THE INDEXING OF INCOME THRESHOLDS FOR THE PERSONAL INCOME TAX.

2025 Regular Session Introduced by Amy Morrin Bello and 7 co-sponsors

Connecticut bill automatically adjusts income tax brackets annually for inflation to prevent bracket creep, reducing state revenues unless offset by other fiscal changes.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
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Bill Summary · HB 5772

Legislative bill overview

HB 5772 would automatically adjust Connecticut's personal income tax brackets and related thresholds annually based on inflation, rather than requiring legislative action each time adjustments are needed. This indexing mechanism would tie tax parameters to a measure like the Consumer Price Index (CPI) to maintain consistent tax burden levels across income groups over time.

Why is this important

Tax bracket creep—where inflation pushes taxpayers into higher brackets without actual income increases—erodes purchasing power and effectively raises taxes without explicit legislative votes. Indexing prevents this automatic tax increase and provides revenue predictability for both taxpayers and the state budget, though it also limits the legislature's ability to adjust tax policy through bracket changes.

Potential points of contention

  • Revenue impact: Indexing reduces state revenues as fewer taxpayers fall into higher brackets; this could require offsetting spending cuts or new revenue sources
  • Legislative flexibility: Automatic indexing removes lawmakers' ability to adjust tax policy through bracket modifications, potentially constraining fiscal responses to budget crises
  • Base year selection: The choice of inflation measure and starting point significantly affects long-term revenue projections and distributional outcomes across income levels

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

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