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Saturday, April 28, 2007

Is Taxation Killing Connecticut?

Maybe not, but it's certainly killing you, right? Don Pesci at Connecticut Commentary compares our State very unfavorably to some European countries whose economies are booming since adopting a flat tax:

Both the flat tax and its ugly twin sister, the progressive tax, have measurable consequences. Since the flat tax permits people to keep more of their own income, that income is returned into the general economic pool in the form of investments. Every time a consumer purchases a product, he is investing in the product; that is to say, he is sending a message to the producer to hire more people to increase production.

These kinds of investments increase business activity, create jobs and – though it seems counterintuitive – result in increased tax revenues by nurturing more tax producers. Capital formation is the pool of money available to industry to expand, create jobs and produce more goods. Connecticut is near bottom in capital formation.

I'm old enough to remember that our State income tax was going to be temporary, but that seems to be have been forgotten by most everyone else. What would be wrong with reducing taxes, seeing as we have nice surpluses, and then asking government to live within its means?

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