Report by Paula Antolini
April 21, 2017 2:16 PM EDT
Sen. Boucher: A Higher Income Tax Rate Is Not the Kind of Change Connecticut Needs
Listen to audio of Senator Boucher here.
I recently attended a chamber of commerce event where noted economist Don Klepper-Smith said Connecticut state government must make profound structural changes to spending and regulations to avoid a fiscal catastrophe. He presented compelling evidence to support the need for change, including:
- Connecticut is last among New England states in job recovery and has only recovered 74 percent of the jobs lost from the 2008 recession;
- Approximately 575 people are leaving Connecticut each week;
- While the national economy is growing at a rate of 2-3 percent, our state is only seeing 1.1 percent economic growth;
- Connecticut has the second highest state and local tax burden with an average of $7,000 per person
- Major employers like GE are in the process of leaving the state
Klepper-Smith said that, economically, Connecticut has made tenuous gains, at best, since the recession in 2008.He added that another recession would be devastating.
While I am referencing statement Klepper-Smith recently made, he isn’t alone in warning us about these dangers our state faces. A host of economists, rating agencies, and financial institutions has been warning Connecticut for a long time that the state must change its spendthrift ways. We need to cut taxes and regulations and make it more affordable for businesses and residents to stay in our beautiful state.
The taxpayers of Connecticut recognize the need for a change in the way the state conducts business. I believe that is why we have an 18-18 Republican-Democrat tie in the State Senate and why Democrats hold the slimmest of majorities in the House. They’re actions have sent a loud and clear message to Hartford that they are taxed too much.
Somehow, my Democrat colleagues still have not heard the message. On April 25, the Finance Revenue & Bonding Committee will hear public testimony on SB 1054, An Act Concerning Various Tax Rates, The Use Of Certain Taxes And Fees For Tourism And Other Programs, Establishing The Mental Health Community Investment Account And Concerning The Purpose Of The Capital Region Development Authority.
What this bill’s long title doesn’t tell you is that it contains language to institute a so-called “millionaire’s tax” that Democrats have been pushing for years. A new income tax rate of 7.49 percent would be levied on single filers earning $500,000, heads of household earning $800,000, and joint filers earning $1 million, and it would be retroactive to January 1st of this year.
This follows the same old logic espoused by Democrats and union leaders that wealthy state residents aren’t paying their fair share. It ignores the fact that these are the very people with the resources to leave Connecticut any time they choose. And since a number of these high earners also are job providers, their absence would continue to put downward pressure on the state’s employment numbers.
Proposals like this continue our state on the path of revenue seeking that has not resolved the state’s fiscal problems. It also flies in the face of the very warnings financial experts have been shouting at us. Measures like this will have a negative impact on our bond ratings and projected fiscal outlook. It will also deter businesses and people from settling here, further hindering economic recovery.
Connecticut’s wealthy are not an endless well the state can continue to tap.
In the Aesop’s fable, a farmer and his wife are overjoyed to learn one of their geese can lay golden eggs. But they are impatient for more gold and cut open the goose hoping to find a treasure trove. Instead, they killed the source of their income.
Lawmakers have already been making deeper and deeper cuts in their quest for more revenue. The goose is already on life support and will surely meet its end if this continues.
And just like the farmer and his wife, Democrats will find themselves standing over a dead carcass with empty hands and empty pockets; their dreams of prosperity killed by their own hand.