HARTFORD, CT — A group of 63 Democratic legislators sent a letter to Gov. Ned Lamont asking him to support a 2% surcharge on capital gains for couples earning over $1 million a year.
The lawmakers, 56 in the House and seven in the Senate, said in the letter that it’s only fair for the wealthiest citizens to contribute more.
“Our state relies heavily on regressive sales and property taxes, while employing merely a moderately progressive income tax,” lawmakers wrote. “This structure soaks the middle class, taking over 12 percent of their income in state and local taxes. Meanwhile, those in the top one percent pay only 8.1 percent of their income in taxes according to the Department of Revenue Services.”
They added: “Since the Great Recession, Connecticut’s top one percent has garnered 100 percent of increased income and received a windfall from the Trump tax cuts. Meanwhile, the middle class has seen their incomes stagnate as they continue to shoulder a disproportionate tax burden. Rather than asking the middle class to dig even deeper into their pockets, we should ask those paying the lowest percentage of their income in taxes – and who have the most disposable income to spare – to pay their fair share.”
Gov. Ned Lamont said there’s “no wiggle room” on a capital gains surcharge.
“We would be almost twice the capital gains rate of Massachusetts, we’d be a lot more than Rhode Island, maybe we’d be a little more than New York. We would not be competitive,” Lamont said Thursday.
Lamont said the capital gains surcharge is not going to raise the $200 million that lawmakers believe it will raise.
“We’ve got to live within our means,” Lamont said. “We’ve got to tell people that would be the fifth big tax increase in a decade … That’s not a way to get the state moving again.”
Rep. Josh Elliott, D-Hamden, a leading voice of the Progressive Caucus, said there were a number of lawmakers who didn’t want to sign their name to the letter but are in favor of a capital gains surcharge.
“That’s a majority of the majority,” Elliott said.
Elliott declined to say that the signers of the letter would vote against any budget without a capital gains tax, but he maintained that they were going to fight for it to be included.
He said the letter will give Democratic leadership the leverage they need when they’re negotiating directly with the governor.
House Speaker Joe Aresimowicz and Majority Leader Matt Ritter said the co-chairs of the two budget writing committees are still negotiating the budget with the governor’s staff and they have yet to sit down to negotiate a final version.
Next week is the last full week of the legislative session so time is running out for them to reach an agreement even though all sides remain confident it will happen before June 5.