Tag: Connecticut

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Accountability folly general freedom moral hazard porkbarrel politics property rights responsibility tax policy too much government

No Rich No More

Connecticut, taxes, revenue, budget, tax and spend, wealth, common sense

Connecticut has a budget problem. There’s not enough money to spend.

WTNH-TV in New Haven paraphrased the situation along with the response of Connecticut’s very progressive governor: “Income tax revenue collapses; Malloy says taxing the rich doesn’t work.”

The news story explains, “Connecticut’s state budget woes are compounding with collections from the state income tax collapsing, despite two high-end tax hikes in the past six years.”

Hmmm. Despite the tax increases? Or . . . “because the state of Connecticut depends too much on its wealthy residents,” as the report continued, “and wealthy residents are leaving . . .”

A Yankee Institute report notes that “the exodus of wealth from the state as top earners and businesses relocate to more tax-friendly states” is a major problem. Institute President Carol Platt Liebau calls it a “terrible cycle of tax increases followed by deficits followed by even more tax increases.”

Yet, state legislative Democrats are back pushing more tax hikes on “the rich.” Senate legislation would jack up the tax rate — retroactively — on those with income of $500,000 or more. House legislation would slap a 19 percent surcharge on some hedge fund earnings. In response, the head of the Connecticut Hedge Fund Association testified that his “industry is populated by exactly that type of person that will move based on tax policy.”*

A song by Ten Years After comes to mind:  

Tax the rich, feed the poor
Till there are no rich no more

Doesn’t sound like a good idea even in song.

This is Common Sense. I’m Paul Jacob.

 

* It’s worth noting that Gov. Malloy is now “against raising taxes again to fill the deficits and is instead focusing on spending cuts . . .”

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Categories
initiative, referendum, and recall

The Willamantic Refuseniks

Thirty-five years ago, the people of Willimantic, Connecticut, confirmed my belief in the value of citizen initiative rights. And they did it without using the initiative!

In 1974, Willimantic citizens rejected the city budget three times in a row, finally compelling a 9 percent tax cut. Willimantic had been hard hit by a recession. Property taxes were high, per capita income low. The town’s biggest employer, the American Thread Company, had just laid off a lot of people. (A decade later, the company would leave the area.) The citizenry was in a rebellious mood. They demanded budget and tax cuts.

They didn’t do it via citizen initiative. Willimantic was following an old town meeting model of governance, under which any citizen who shows up can vote on the city budget. And they did.

Most places aren’t run on this model. But it has distinct similarities to citizen initiatives, whereby voters can directly curb taxes and spending. Which is why politicians attack initiative rights where citizens have them, and try to stop citizens from gaining initiative rights where they don’t yet have them.

You and me, working together, we have to do something about this. We must protect and use a process whereby the people can make laws the politicians must obey.

Fittingly, I first read about Willimantic in economist Murray Rothbard’s introduction to Étienne de La Boétie’s classic essay on “The Politics of Obedience,” usually translated as The Discourse on Voluntary Servitude.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

Connecticutting The Dots

Connecticut used to be one of the go-to places for escaping state income taxes.

But in 1991, Governor Lowell Weicker hatched the novel idea of burdening Connecticut residents with the same direct tax on income with which Americans have been saddled in so many other states. Despite the deep unpopularity of his proposal, Weicker rammed it through. That meant sacrificing any chance at re-election. But he was hailed as a hero by all fans everywhere of government bloat and flattened economies.

The Constitution State has indeed suffered a flatter economy in the years since. The Yankee Institute points out that since 1992, Connecticut businesses have hired no new workers on net. Even as the country added more than 20 million jobs. Over the last decade, Connecticut suffered a net loss of some 113,000 residents. If your tax policies tell productive people to get lost . . . they do.

Connecting the dots between higher taxes and stalled growth may be easy for most graduates of Economics 101. Even most politicians probably grasp the connection. But many just don’t care.

In 1991, residents were told that the income tax burden would never exceed 4.5 percent. But in 2001, it jumped to 5 percent. Now the current governor, Jodi Rell, wants to hike the top rate to 6.5 percent.

What the . . . Rell? Folks aren’t leaving the state fast enough for you?

This is Common Sense. I’m Paul Jacob.