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Friday, December 08, 2006

Trends for '07: Learn From Connecticut's Mistakes!


Will our popular Governor expend any political capital to reduce taxes?

Learn from Connecticut's mistakes? Sure, we're always happy to provide the other 49 States the benefit of our accumulated wisdom!

Here's an editorial urging people in Tennessee not to repeat the mistakes of Connecticut. What did we do that was so bad? Oh, yeah - it was that temporary income tax we adopted way back in 1991. Here's a slice:


In 1991, Connecticut adopted a broad-based tax on wages and salaries-the most recent state in America to do so. Fifteen years later, it is clear that adopting the tax was a major blunder. Contrary to promises made by income tax advocates, Connecticut's income tax failed to produce long-term fiscal stability. Instead, the Nutmeg State plunged into a brutal recession that continues to this day.

In response to the recession, the state borrowed heavily and policymakers drained the state's reserve fund. Connecticut legislators then broadened the sales tax base, inflated cigarette taxes, imposed surcharges on Connecticut's corporate tax, hiked energy taxes, implemented a new death tax and increased the income tax itself.

Connecticut's spiraling increase in taxation, started by the addition of an income tax, led to a dismal economy over the last 15 years. Between 1976 and 1991, job growth in the state topped 29 percent. But between 1991 and 2006, job growth was nonexistent. The Federal Deposit Insurance Corporation recently concluded that since the early 1990s, "no other state has had such stagnation in employment."


Is the new Democratic supermajority going to listen to this sort of thing or are they just going to worry about civil unions and bashing Wal-Mart? What about our extremely popular Republican Governor... would she be willing to expend some political capital to give the people back some of their capital?

Here's another slice:

To make matters worse, young people flee the state in droves. U.S. Census Bureau data shows that in the 1990s, no state in America lost a greater percentage of its 18-to-34-year-olds.

Finally, the harshest condemnation of Connecticut's income tax came from the states that chose not to follow Connecticut's disastrous lead. When the tax passed, Harley T. Duncan, Executive Director of the Federation of Tax Administrators, predicted that "three or four other states" would adopt a state income tax in years to come. Fifteen years later, not one of the nation's income tax free states has followed Connecticut's lead. In fact, Texas, Florida and Tennessee, boast robust economies and remarkable growth largely as a result of remaining free of an income tax.

In the three and half centuries between its founding and 1991, Connecticut became the wealthiest state in the nation per capita without an income tax. Over the last decade and a half, the state's economic fortunes have plummeted. Despite its prime location, highly educated workforce and tradition of innovation, the state has been unable to overcome a tax burden that has ballooned since the adoption of a state income tax.

It's official... Connecticut is now the poster child for "Don't Do This Unless You Want Your State Economy to Tank!"

However, because of the politicization of nearly all aspects of modern life, almost no one in Hartford will dare to act on such an analysis or even mention it... it's not progressive enough. The Courant would rather run pieces about the economic good times that may be ahead because Hartford is now one of the "gayest" cities in the country.

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