Tax cuts are a shell game that won’t transform cities

By Chris Powell

Governor Lamont and Democratic and Republican state legislators are all proposing a half-percent reduction in the state income tax for most people, as if this should be considered a special boon.

But since it has tens of billions of dollars in unfunded pension obligations, state government really isn’t solvent enough to afford tax cuts without spending cuts, and a half-percent cut in the state income tax will merely reimburse people for the half-percent increase in the income tax that was enacted two years ago to finance the state’s paid leave program for private-sector workers, a program from which most people will never benefit.

Of course essentially offsetting the income tax increase from the paid leave program is better than nothing, but it is hardly something for elected officials to thump their chests about as they are doing.

It is just a shell game: Look at the tax reduction over here and forget the tax increase over there.

Connecticut’s net tax burden, close to the highest in the country, a burden that has nearly halted the state’s economic and population growth, isn’t really being reduced and can’t be reduced until state and municipal government spending is reduced.

Something so radical — basic efficiency — is not on state government’s agenda.

Proposing another sort of tax cut the other day, state Sen. John Fonfara, a Hartford Democrat campaigning for the city’s mayoralty, made an acknowledgment unusual for a member of his party: that the pathologies of poverty are driving people out of his city and Connecticut’s other cities.

Fonfara didn’t admit that his party long has operated the cities as poverty factories to keep their residents dependent on government. But he made a start at raising the issue as he proposed giving residents of the state’s poorest census tracts an exemption from the state income tax.

This, Fonfara thinks, might induce middle-class city residents to stay put rather than move out, as middle-class people have moved out of Connecticut’s cities for many decades. This migration has repeatedly demonstrated the failure of the state’s urban policies to improve the cities, without ever prompting state government to fix the failure — perhaps because urban policy’s real purpose has been to create and sustain the dependent underclass.

So Fonfara’s tax-exemption idea more or less calls attention to the failure of urban policy to do what government pretends the policy is meant to do. But the idea seems unlikely to accomplish its goal.

While of course the income tax savings would be welcome to middle-class city residents, they still might save even more on their property taxes by moving out.

Suburban schools still would hold their superior appeal, being less burdened by the neglected and fatherless children of the urban underclass.

Suburban amenities, like markets with a greater variety of goods and lower prices than markets in the cities, would remain a powerful draw.

So would the safer environment outside the cities.

Fonfara’s idea means to affect all those considerations, but the subsidy to people staying in the city would hardly be large enough to make a noticeable difference in city demographics.

A residential income tax exemption also would invite fraud, with people establishing superficial addresses with friends and relatives in the cities while actually residing elsewhere.

Already former Hartford state Sen. William DiBella, longtime chairman of the patronage-laden Metropolitan District Commission, has been accused of remaining a city resident only technically and spending more time at his home in Old Saybrook.

Of course partly to escape Connecticut’s income tax, in their retirement many longtime Connecticut residents have established legal residency in Florida while retaining their homes in Connecticut and living here less than half the year.

So the solution to urban pathologies is not adjusting income tax policy but rather making a comprehensive attack on the pathologies themselves: government-subsidized fatherlessness in the welfare system, social promotion in the schools, failure to imprison the chronic criminal offenders who find most of their victims in the cities, and high property taxes driven up by the excessive cost of city government personnel.

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Chris Powell is a columnist for the Journal Inquirer in Manchester, Connecticut. (CPowell@JournalInquirer.com)

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