By Chris Powell
Just as you needn’t ask the barber if you need a haircut, you needn’t ask a political action committee run by government employee unions, leftist academics (maybe that’s a redundancy), and bleeding-heart clergy members whether government should raise taxes. But the political action committee called A Better Connecticut Institute figures that its name conceals its underlying interest enough to allow it to be taken seriously.
The other day the institute issued a study maintaining that contrary to the concerns of Governor Lamont, extremely rich people will not leave Connecticut if state government raises their taxes, so their taxes [ITALICS] should [END ITALICS] be raised.
There is some logic to the belief that the super-rich won’t move so easily if they are very happy where they are. For the more money people have, the less important any particular dollar is to them and the more they can afford higher taxes.
But the super-rich also might be just as comfortable in some other nice place, and they already pay so much in taxes in Connecticut that the departure of even one of them could cost state government many millions of dollars. The super-rich and the merely ordinarily rich already pay most of the state income tax.
Whether higher taxes would push the super-rich out of Connecticut is mainly speculation. But it is fair speculation, and it cannot be disputed that high taxes are discouraging. Nobody relocates in the hope of being taxed more.
For many years highly taxed states in the Northeast, including Connecticut, have been losing prosperous and self-sufficient people to the rest of the country. Connecticut’s population growth and economic growth are nearly the worst among the states. Whatever their cultural drawbacks, which are in the eye of the beholder, Florida and Texas have been growing rapidly, and they don’t impose income taxes.
Many Connecticut residents have moved there in recent years but even those who have moved to the Carolinas, which do have income taxes, report saving money, especially on property taxes, while enjoying comfortable lifestyles and milder winters.
Raising taxes on the super-rich might be good policy if there was some assurance that it would markedly improve living conditions in Connecticut. But the state has been raising taxes since it enacted its income tax in 1991, and where is the evidence?
The state’s cities are still dysfunctional, maybe more so.
Student proficiency has crashed despite the everlasting cycle of raising teacher salaries that began with the Education Enhancement Act in 1986.
Crime generally is said to be down lately but murders are up and even city mayors now admit that most shootings are being committed by repeat offenders — that is, people state government already has had many chances to deter but failed to.
Practically every week brings the disclosure of gross but uncorrected mismanagement in state government to which the governor and General Assembly are indifferent.
Maybe no one in authority cares about those things right now because state government is sitting on so much “emergency” federal financial aid, aid that has generated much of the inflation that is crushing not just the poor but the middle class too. The U.S. Census Bureau’s February “Household Pulse” survey found 44% of Connecticut residents struggling to pay their bills.
An argument for higher taxes on the super-rich might be made if the revenue was to be used to reduce taxes on everyone else. While the governor doesn’t support raising taxes on the super-rich, he [ITALICS] has [END ITALICS] proposed reducing income taxes on the middle class, which is more than advocates of raising taxes on the super-rich propose.
No, those advocates want the extra money only so state government can spend it, and the composition of A Better Connecticut Institute shows how most of it would be spent. For the institute’s board includes the executive director of the Connecticut Education Association, the state’s biggest teacher union, and the political director of the Connecticut AFL-CIO, which is composed largely of state and municipal government’s own employees. Most state and municipal tax revenue is spent compensating those two groups.
And what do many members of those groups do when they retire? Of course they move south, where the cost of living is lower and their Connecticut government pensions go farther.
Chris Powell is a columnist for the Journal Inquirer in Manchester, Connecticut. (CPowell@JournalInquirer.com)
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Chris Powell column 