Gov. M. Jodi Rell said she will veto any proposal that includes a tax on executive bonuses, a key component in the Democrat’s jobs bill.

Rell wrote lawmakers Wednesday saying launching the tax would be “irresponsible” because there are questions whether it is even legal. If a court throws out the tax, the deficit would only increase, she wrote.

Attorney General Richard Blumenthal released his opinion Tuesday, saying the tax on employees who earned bonuses in excess of $1 million from the eight firms in Connecticut that received money from the federal bailout last year is “likely constitutional.”

Critics, including Republicans and some in the business community, say it illegally singles out employees of certain firms, and violates due process by applying a tax retroactively.

But Blumenthal said the tax is within the state’s taxing authority, and the U.S. Supreme Court has repeatedly upheld retroactive taxes.

“The proposed legislation is likely to survive constitutional scrutiny,” he said.

Rell said his opinion is “hardly a steadfast legal endorsement” and has received an opinion stating it would not be upheld in court.

Several proposals have been made in Congress to tax these bonuses with no success, and the Congressional Research Service said the tax is vulnerable to being found unconstitutional for a number of reasons.

Senate President Pro Tem Donald E. Williams, Jr. of Brooklyn estimates the 3 percent tax surcharge would bring in about $30 million and allow the state to eliminate the $250 annual business registration tax for 46,000 small businesses.

Jacqueline was CT Mirror’s Education and Housing Reporter, and an original member of the CT Mirror staff, joining shortly before our January 2010 launch. Her awards include the best-of-show Theodore A. Driscoll Investigative Award from the Connecticut Society of Professional Journalists in 2019 for reporting on inadequate inmate health care, first-place for investigative reporting from the New England Newspaper and Press Association in 2020 for reporting on housing segregation, and two first-place awards from the National Education Writers Association in 2012. She was selected for a prestigious, year-long Propublica Local Reporting Network grant in 2019, exploring a range of affordable and low-income housing issues. Before joining CT Mirror, Jacqueline was a reporter, online editor and website developer for The Washington Post Co.’s Maryland newspaper chains. Jacqueline received an undergraduate degree in journalism from Bowling Green State University and a master’s in public policy from Trinity College.

Leave a comment