Posted on 08/24/2006 12:09:05 PM PDT by bruinbirdman
A new paper released by the Yankee Institute documents the negative consequences of the broad-based income tax passed by Connecticut legislators and signed into law in 1991.
Among the findings, author D. Dowd Muska notes:
* The income tax failed to produce fiscal stability. By 2000, budget deficits had returned, and with them tax hikes, heavy borrowing, and the complete withdrawal of the state's "rainy day fund."
* Revenue from the income tax did not lead to property-tax relief -- between 1991 and 2003, Connecticut property-tax collections rose 19.8 percent.
*Job growth has been nonexistent since 1991 -- the Federal Deposit Insurance Corporation recently concluded that since the early 1990s, "no other state … has had such stagnation in employment."
* Median household income in Connecticut has fallen, in inflation-adjusted terms, since 1991 -- nationally, median household income has grown.
*Over 240,000 native-born citizens fled Connecticut between 1990 and 2002, and in the 1990s, no state lost a greater percentage of its 18-to-34-year-olds.
It's time to admit that Connecticut's income tax was a major policy blunder, says Muska. The state should consider shifting to a sales tax on all retail transactions, with a generous rebate program for low-income households. Doing so would likely produce a more reliable revenue stream, as well eliminate the income tax's strong disincentives to work and invest.
Source: D. Dowd Muska, "Fifteen Years of Folly: The Failures of Connecticut's Income Tax," Yankee Institute, August 2006.
gosh, it's really a surprise to any but Dims that taxes don't create jobs.
Less than 20% increase in twelve years is pretty good. The taxes for my house went up by about 150% in the same period.
But... but... what about all that gambling revenue and the cigarette tax windfall?!!
What do you mean wage tax? Is this a tax on top of a state income tax?
We, the people in California pay Federal taxes, state income taxes, sales taxes, luxury taxes, property taxes, Mello-Roos(an additional tax at the time of home purchase based on Sq. footage), cigarette tax, gas tax, and booze tax. Our taxes get taxed.
Instead of shifting a tax to a badly misguided sales tax (aka "FAIR" tax) how about simply downsizing the size of government, and making it more efficient?
It is a city tax (4.4%) that you pay for the priveldge of working or living in the city. That is on top of all other taxes. And it has actually gone down in the last few years (by about 0.20%).
...but only 20% of its registered voters.
Now available from participating conservatives near you!
Actually, Philadelphia's voter roles have increased...
How about imposing taxes on all internet transactions? That will surely balance the budget. Right?
Right???????
Before the income tax was adopted the CT sales tax was 7% and there was a stiff (up to 11% or so), discriminatory income tax on dividends and capital gains. After the general income tax on all income was passed the sales tax was reduced to 6%. The big winner with the income tax (maximum rate 4.5% at the time) was the politicians -- they had a vast honey pot of new money to spend. Another winner was those in lower Connecticut who worked in New York City. They already paid tax to New York State on earnings in NY, and that more than offset their CT income tax on those earnings. The CT tax on their dividends & capital gains dropped by more than half. The legislature repealed the tax but then-governor Weicker vetoed it and the veto couldn't be overridden.
Weicker and his Greenwich neighbors (Red Ned Lamont, et al.) were just enraged at having to actually pay taxes personally, from their own money, no less (As Leona Helmsley said on the subject of federal income taxes: "Taxes? I don't pay taxes! Only the little people pay taxes").
Connecticut's mega investor class handsomely rewarded the political whores who enacted the new tax scheme and abandoned their traditional alliance with people who worked with their hands for a living, moderate income professionals and small business folks. It was only right (to hear them) that the kids who flipped burgers at Mickey D's pay taxes to subsidize the lavish lifestyles of Red Ned Lamont's red relatives.
The investment taxes were lowered to 4 1/2% which also made the investment class a very big winner compared to 14%. Connecticut is the only state to have enough sense to abolish the unnecessary layer of government that is county government. No county government means no county taxes (no shifting tax burdens from the welfare denizens of the big cities onto the productive suburbs to subsidize urban corruption and socialist schemes through county subsidies). That means you need only see to it that your suburban state legislators vote NO on state tax burden shifting schemes to cut the allowances of urban bosses. Connecticut also gives NO taxing authority to school boards but makes them beg for money out of general municipal revenues and some state subsidies and how the gummint skewel madrassas of the radical left hate that lack of taxing authority.
Commissar Weicker's veto could not be overridden because he paid off legislators in furiously anti-income tax blue collar districts by giving them choice jobs in the permanent bureaucracy.
Also, the New Haven Register had led the successful repeal of the first Connecticut general income tax in 1971, fighting the Hartford Courant on the subject. By 1991, the Register had been sold by the heirs of the Jackson family to the old leftist and lifestyle leftist Ingersoll family which supported the state income tax for the usual special investor interests.
Note that Weicker endorsed Red Ned and that exit polls say that the median income of Red Ned's primary voters was over $100,000 while Lieberman's best areas were the mill towns and modest neighborhoods of Democrat voters in places like Waterbury and the Naugatuck River industrial valley
Finally, the sensible solution would have been repeal and putting the state government on a severe diet by cutting its allowance. Cut enough and the interest, capital gains and dividend taxes could easily have been repealed.
Oh, to finally dig up the video I took that day of King Lowell Wieker walking into the crowd, and NOT ONE person jostled him or spit at him like the media said....
Trip down memory lane....
how about simply downsizing the size of government, and making it more efficient?
When you drop half the electorate out of participating in the tax system, why would you figure politicians would be encouraged to downsize government and make it more efficient?
"It's like me in the restaurant: What do I care about extravagance if you're footing the bill?"
--- Walter Williams
Bush touts relief as tax day looms
Another 3.9 million Americans will have their income tax liability completely eliminated, officials said.
That's 3.9 million Americans more added to the spending constituency of 70% of the public clamoring for more from government, figuring someone else foots the bill.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.