You asked for a preliminary summary and fiscal note for the proposed "millionaire tax" bill considered by the Finance, Revenue and Bonding Committee. The following information was provided to the committee by our office and the Office of Fiscal Analysis.

BILL SUMMARY

The substitute bill imposes a temporary 1% surcharge on Connecticut taxable income greater than $ 1 million. The surcharge applies for the 2002 tax year and is in addition to regular state income taxes for that year. The bill requires the additional tax to be computed and collected according to same requirements as apply to the state income tax.

Effective Date: Upon passage and applicable to tax years beginning on or after January 1, 2002.

FISCAL IMPACT

The bill would result in a one-time General Fund revenue gain of $ 140 million in FY 03 and is anticipated to affect approximately 6,500 taxpayers.

COMMITTEE ACTION

On April 1, 2002, the committee considered and defeated a motion to give the bill a joint favorable report. The tax was originally part of SB 611, An Act Concerning Revenue Enhancements. The unsuccessful Finance Committee proposal was to substitute the tax for the content of another bill (SB 38, An Act Deferring The Increase In The Singles Exemption Under The Income Tax).

JL: ro