The Daily Caller

The Daily Caller

Will Connecticut serve as a cautionary tale?

Photo of Patrick Gleason
Patrick Gleason
Director of State Affairs, Americans for Tax Reform

There are only six governors who think it would be prudent to raise taxes at this time. Unfortunately for Connecticut taxpayers, despite being home to the costliest state government and third-highest state and local income tax burdens in the country, first-term Gov. Dannel Malloy (D) is one of those six.

Gov. Malloy is hoping to get final approval from the legislature this week for his FY 2012 budget, which entails over two dozen separate tax increases according to the Hartford-based Yankee Institute — hitting everything from individual and corporate income, to property and gas at a time when averages prices are approaching $5 a gallon. Malloy’s budget even includes an unconstitutional tax on online purchases.

Malloy’s budget is a grab bag of bad ideas that stands in stark contrast to the spending plan recently signed into law by his Democratic counterpart in neighboring New York, Gov. Andrew Cuomo. Cuomo, who in March closed a sizable deficit for the coming fiscal year without raising taxes, demonstrates that even Democratic governors recognize that higher taxes will only hamstring the tepid economic recovery.

Like New Jersey Gov. Chris Christie, Cuomo has shown that fiscal restraint and opposition to higher taxes is not just good policy, it’s also good politics. In fact, recent polling has Gov. Cuomo’s approval rating at 77% and Gov. Christie continues to have higher approval numbers in blue New Jersey than President Obama.

Malloy apparently didn’t get the memo. His budget, which is slated for floor votes this week, includes nearly $2 billion in higher taxes on a host of goods and services. It is also a great example of how raising taxes is what politicians do when they prefer not to govern. Amazingly, despite erroneous claims of massive cuts, Gov. Malloy’s allegedly “austere” budget actually increases spending from current levels by 8% in the coming fiscal year. Only in government could a spending increase be characterized as a cut with a straight face.

The truth is that Connecticut, more so than perhaps any other state in the union, has a spending problem and not a revenue problem. And while that’s a phrase commonly heard from conservatives, it happens to be backed up by the numbers. In fact, had the state lived within its means and kept spending in line with population and inflation over the last decade, the state would have spent $20 billion less than it actually did for that duration — money that could have been put in a rainy day fund or, ideally, returned to taxpayers.

While President Obama and Congressional Democrats have owned up to the fact that the U.S. corporate tax rate — the highest in the developed world — must be reduced in order to increase competitiveness and foster job creation, Gov. Malloy has not shared in this wisdom.

The pending Connecticut budget entails a 100 percent hike in the state’s corporate tax surcharge. Raising taxes on “big, bad corporations” may win cheers among Malloy’s liberal base, but it betrays ignorance as to who actually pays corporate taxes. There is now an emerging consensus among economists that higher corporate taxes are passed along to ordinary Americans in the form of reduced wages, capital gains, and dividends. The fact is that corporations don’t pay taxes, people do.

  • robb32

    ps, the only Governor we had that EVER gave money BACK to us was John Rowland,and as he wasn’t in bed with the unions, he was convicted of taking “gifts” from state contractors. This is the caliber of leader we have always had in Corrupticut.

  • robb32

    Trying desperately to leave Ct…You wouldn’t believe the multi layered corruption and cronyism that exists here.. *especially in Municipal govt*. It’s part-in-parcel to why the Boston Globe nicknamed us “Corrupticut”. Civil service here means if you’re civil to the “right people”, you have a good chance with a job. If yopu’re nor related to the right people, you don’t.
    Would love to see someone challenge the unconstitutional online tax, or have the ICC come down on Ct. Even the Malloy election win was tainted with several cases of election irregularites(Bridgeport)and ballot fraud; as well as of course the inept mishandling of the election by the Secretary of State who was too busy in court trying to run for office to effectively run an election.

  • http://www.facebook.com/people/Conor-McCartney/16802823 Conor McCartney

    it “betrays ignorance” … really?

  • Drahcir

    I am so glad I do not live in Connecticut,and the people there are going to be in sorry shape if this goes through.