Like citizens standing in line at the DMV, many of America’s most liberal cities and increasingly states are lining up outside the doors of bankruptcy court elbowing each other in the ribs as they jostle for position.
Earlier this month we chronicled the plight of Illinois as it struggles to cope with mounting bills and an exodus of businesses and residents. (In a late-breaking addition to the story, Illinois just announced it’s bailing from lottery programs due to the budget crisis.)
Now another long-held-in-liberal-hands state, Connecticut, is wrestling the insolvency monster and just like Illinois is determined to use the proverbial “definition of insanity” to try and solve its fiscal headaches.
As we know, in 2011 Illinois massively raised personal and corporate tax rates in an effort to bring in more revenue so it could meet its bloated budget and service its insurmountable debt. It didn’t work. So what’s Connecticut’s plan? Facing a $3 billion budget deficit, the libs of Connecticut want to raise taxes again. They just don’t learn.
Why were they lower?
“Connecticut raised taxes in 2011 and 2015 in response to prior multi-billion dollar deficits, but revenue has repeatedly fallen short of expectations.
Compounding the issue is the exodus of wealth from the state as top earners and businesses relocate to more tax-friendly states. Earlier in the year the OFA cited the top 100 income tax filers – that is, those who remain in Connecticut – as accounting for a $30 million decline in projected revenue.
That number has now grown to an expected $267 million.”
So the state legislature spent more than it took in 2010 and raised taxes to pay for it in 2011. Ditto 2014/2015. The response was businesses and wealthy, higher-tax-bracket individuals did the same thing they did in Illinois – they left. Thus opening the fiscal gulf even wider. Now that the trickle has become a flood, the liberals who run the state come up with a definition of insanity answer…do it again.
“Senate Bill 1054 would impose a retroactive tax on individuals, families and owners of small businesses who earn $500,000 or more.”
Yes you read that correctly. A retroactive income tax! So if you used to make a ton of money but didn’t pay the new income tax rate on it, they’re going to roll the hands of time backwards and pick your pocket for what you would have paid then if the tax rate of today had been in place at that time. But that’s not all:
“Buried in a bill to raise taxes on bed & breakfasts and implement yet another motor vehicle registration fee is a provision to raise the income tax on Connecticut’s top earners from 6.99 percent to 7.49 percent.
…The income tax wasn’t the only tax being eyed for an increase. A separate bill – House Bill 7322 – would raise the sales tax from 6.35 percent to 6.99 percent and eliminate sales tax exemptions for nonprofits like the YMCA.”
Raise top income earners’ tax bracket, raise taxes on bed and breakfasts (which invariably are small-business owners), another vehicle registration tax, eliminate exemptions for nonprofits. Think this could result in more exoduses?
They simply cannot or refuse to understand this spiral. Not enough money to pay the bills leads to raising taxes. Raising taxes leads to businesses and high earners leaving. Businesses and high earners leaving leads to not enough money to pay the bills. Like the Gieco commercials say, “So simple even a caveman can figure it out.”
Of course there’s another Geico commercial we can paraphrase: If you’re a liberal you raise taxes. It’s what you do.”
[Note: This article was written by Derrick Wilburn]