Plenty of ideas for taxes but few for economizing

By Chris Powell

Members of the Democratic majority in the General Assembly have a new tax idea. They would impose a 28-cent tax on every delivery of a retail product. Anything that comes to your door from Amazon, Walmart, UPS, Federal Express, Door Dash, pizza shops, and other restaurants would be charged. 

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The idea is copied from Colorado, which has imposed such a tax to raise money for transportation infrastructure. Connecticut’s Special Transportation Fund is said to be in good shape but the Democrats are concerned that it may be drained in a few years — a fair concern if the Democrats continue to control the state.

But since money is “fungible” — that is, easily moved around — there is no guaranteeing that it will end up being applied as advertised. The delivery tax revenue might continue to be placed in the transportation fund but other revenue now deposited to the fund might be diverted.

Democratic legislators are proposing at least two other dedicated taxes: a tax on telephone lines to replenish a workers’ compensation fund for firefighters with cancer, and a tax on sugar-sweetened beverages to finance free meals for public school students.

The Yankee Institute’s Connecticut Inside Investigator reports that the state already imposes a dedicated tax on certain medical insurance policies. The tax helps finance the state Insurance Department, the state Office of Health Strategy, the Office of the Healthcare Advocate, and certain government health initiatives. It’s not clear why medical insurance policies, already so expensive, should be made still more expensive with a tax. Nor is it clear why this tax should apply to some medical insurance policies but not others. 

Did legislators think that they more easily could get away with taxing medical insurance policies if the tax didn’t apply to everyone’s policies?

Democratic legislators say they’re just studying the retail delivery tax. Well, of course — every tax starts as a study. What is more disturbing is what is not being studied by the General Assembly: the efficiency and priorities of state government.

Legislators seem happy to leave to Governor Lamont any initiatives to reduce spending, so the governor is taking the heat for noting that the state colleges and universities system should economize as enrollments decline. 

The governor also is taking heat for noting that as the Trump administration rampages through the federal government with Elon Musk’s chainsaw, Connecticut should be extremely cautious financially as federal financial aid is likely to be cut. While the governor is a Democrat, only members of the small Republican minority in the legislature seem to have appreciated his warning.

Many compelling human needs in Connecticut are not being met even as state government remains full of inessential and overgenerous appropriations. It is a fair suspicion that, forced down to its last several hundred million dollars, state government would spend them all on raises for its unionized employees.

A perfect political system for Connecticut in its current circumstances would go far beyond the controversial “fiscal guardrails” now being subverted. It would require reducing state government spending by 5% each year for five years. For eventually this would induce the people clamoring to spend more on the human needs that seem compelling to them to begin scrutinizing the budget for items that are not so compelling and could be canceled. That is, a perfect political system for Connecticut would require people who consider themselves liberals to become liberals and show some respect to the private sector, which pays for all government.

Instead what passes for liberalism in Connecticut is mainly whining, like the complaint the other day from the Connecticut Conference of Municipalities that state financial assistance to cities and towns isn’t keeping up with inflation. CCM doesn’t seem to have noticed that most private-sector incomes haven’t kept up with inflation either even as government-sector incomes have kept up just fine.

If municipal officials don’t want to keep asking their constituents for property tax increases, they should stop whining and pursue efficiency in government — that is, making choices more in the public interest.

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Chris Powell has written about Connecticut government and politics for many years. (CPowell@cox.net)

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