Proposal Penalizes Businesses, Executives
The Labor Committee approved a bill this week that will penalize Connecticut businesses for their success—and discourage them from locating or growing their businesses here.
HB 5280 strips eligibility for state tax credits, exemptions, abatements or financial assistance from businesses if any of their executives earn more than 50 times the average compensation of company employees. The bill applies to companies with 50 or more employees – regardless of industry.
While the bill makes for great political fodder, lawmakers should consider the implications it might have for Connecticut. Namely, it sends a clear message to some of the most successful job creators that they are not wanted in Connecticut.
No other state has such a cap on success, so it would create a strong incentive for business owners to consider other states to locate or grow their businesses. For entrepreneurs who risk all on their businesses, it says, “maybe not in Connecticut.”
And that would deny Connecticut citizens jobs and opportunities when they need them most.
Contradicts State Policy
The bill also contradicts policies legislators have adopted to drive economic growth and encourage certain business behavior.
Lawmakers approve economic tools such as the apprenticeship and research and development tax credits to encourage businesses to accomplish specific activities–such as, hiring apprentices and developing new technologies and products.
Yet HB 5280 would block those activities.
It also discourages businesses and executives from making philanthropic gifts in the state in exchange for tax reductions. The state rewards these activities with tax credits because of their benefit in terms of jobs, workforce development, and establishing Connecticut as a hub for new technology.
Denying access to these credits only pushes businesses to other states.
In many recent nationwide surveys, Connecticut was listed as one of the bottom few states in which to do business. To change this, we need policies that encourage more businesses to locate here, providing job opportunities and social mobility for our citizens. HB 5280—which divides prosperity rather than growing it so that more people can share in it—has the opposite effect.
CBIA urges lawmakers to reject HB 5280.
For more information, contact CBIA’s Eric Gjede at 860.244.1931 | email@example.com | @egjede
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