Senate Republicans Propose Tax Cuts for Families Earning Under $200K

Connecticut Senate Republicans unveiled an affordability plan Tuesday that would eliminate state income taxes for some residents and provide significant tax relief for families earning under $200,000 annually.

The proposal would eliminate state income tax for single filers making up to $25,000 and reduce taxes by 16% to 40% for individuals earning up to $100,000 and joint filers earning up to $200,000. The plan also eliminates the car tax through an income tax credit for those same income brackets.

“For some families, this could literally be $3,000 or $4,000 a year in tax relief we’re providing,” Minority Leader Stephen Harding of Brookfield said. “And we could do it right now.”

The Republican plan also eliminates the public benefits charge on utility bills, moving that expense to the general fund instead.

State Sen. Ryan Fazio of Greenwich said the state could offset the resulting revenue shortfall in the short term through adjustments to the state’s volatility cap, which limits volatile tax revenue primarily from personal income and pass-through taxes. Long-term, the plan would work by limiting government growth, Fazio said.

“This is eminently doable,” he said.

Deputy Minority Leader Paul Cicarella of North Haven said the priorities came directly from constituents rather than Republican leadership.

“We didn’t just come up with these issues that we have here today,” Cicarella said. “We didn’t say the electric bills are too high. We didn’t say it’s too expensive to do business here in Connecticut. Our constituents, and clearly all the polls and the data that shows we are going in the wrong direction really fast when it comes to affordability.”

Cicarella acknowledged Democrats were also discussing affordability but said their focus remained on federal issues.

“And it seems like someone stubs their toe here in Connecticut, and they blame D.C.,” he said.

Democratic Senate President Martin Looney of New Haven and Majority Leader Bob Duff of Norwalk pushed back in a written statement Tuesday afternoon, saying federal policies were driving up costs in Connecticut.

“We won’t let them use state tax credits to paper over the damage their party is doing to Connecticut workers and families,” the Democratic leaders said.

Senate Democrats have their own affordability plan for the legislative session, which includes eliminating taxes on clothing under $100, renters and child tax credits and other initiatives, they said.

“Our affordability proposals will be part of a responsible, balanced budget because that’s what governing actually requires,” the Democrats said. “You can’t claim to be the party of affordability while your president is picking the pockets of Connecticut families.”

The competing affordability proposals set up what appears to be a central debate for the 2025 legislative session, with both parties positioning themselves as champions of cost relief for Connecticut residents facing economic pressures.