Democrats who want to increase the capital gains tax in Connecticut say there’s no evidence it would lead to the wealthy fleeing the state.
That’s a stance backed by Republicans.
Elizabeth McNichol, with the Center on Budget and Policy Priorities, a Washington, D.C.-based liberal think tank, told lawmakers on the finance committee that predictions of an exodus of millionaires and an economic slowdown are vastly overblown.
“A recent survey of academic research found little to no effect of high taxes on millionaires’ decisions on where to live. And most states that raised top rates since 2000 have economies that are doing just as well, or better, than their neighbors.”
The Democratic proposal is for a 2 percent surcharge on investment income. That would push Connecticut’s top capital gains tax rate to just under 9 percent.
State statistics show that people earning more than $1 million a year paid 67 percent of all capital gains taxes in the past 10 years.
Democratic Governor Ned Lamont does not support the tax increase.
