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Blumenthal Deems Bonus Tax Constitutional
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Connecticut’s Attorney General has ruled that it is constitutional for the state to tax the bonuses of workers employed by firms that were bailed out by the federal government. As WNPR’s Harriet Jones reports, legislators want to use the cash to stimulate jobs growth.

A bill introduced in the state senate this session calls for instituting a tax on bonuses of more than a million dollars, if the employee’s company has received bailout cash. The legislation would use the revenue to fund several measures including suspending for two years the business entity tax on small companies.

This is seen by Democratic proponents as a way to help businesses increase employment. But Republicans had questioned the notion of taxing bonuses, saying it might not be constitutional. Attorney General Richard Blumenthal said Tuesday the measure is in line with the state’s constitution, and could withstand a legal challenge. He says the aims of the extra tax are a legitimate and reasonable state objective. If the measure passes, the tax would apply to bonuses paid in 2010 and 2011.

For WNPR, I'm Harriet Jones.