Connecticut Laughs Ruefully <br>As Its Tax Haul Collapses <br>25 Years After Income Levy

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The New York Sun

Connecticut residents who remember the enactment of the state income tax in 1991 can only laugh ruefully as state government’s revenue collapses again, this time largely on account of falling receipts from the income tax.

Twenty-six years ago the tax’s advocates declared that the income tax would stabilize revenue and be much more reliable than other taxes. But now receipts from other taxes are holding up far better than those from the income tax.

Back then there was a theoretical argument for the income tax — that it would correlate more than other taxes with ability to pay, drawing more from wealth. But it was not a good argument in practice, since as it was structured the income tax replaced the state’s taxes on dividends and capital gains, which already were being paid largely by the wealthy.

Thus the income tax turned out to be mainly a tax on the middle class, and the stabilization and reliability arguments were only the usual lies from the government and welfare classes. As always all they wanted was more money.

Governor Malloy, a Democrat who in the last six years helped enact two tax increases even larger than the income tax, claimed in recent weeks to oppose raising taxes again. But this week, as revenue collapsed by the hour, the governor gave way on taxes, even before any savings for the next state budget had been achieved.

With the governor giving way, the leaders of the Democratic majorities in the General Assembly also dropped their poses of restraint. Now they will pursue doing still more of what has driven the state down.

Democrats and Republicans alike have been calling state government’s financial circumstances “dire,” but state and municipal employees are still being paid not to work on Columbus Day and five other inconsequential holidays. That is, no one in authority has even tried yet to control spending. No one in authority has identified the problem and called for treating it as the emergency it is.

The problem is that the premises of the three most expensive state government policies are mistaken and serve only special interests, not the public.

Collective bargaining for government employees and binding arbitration of their union contracts do not produce efficiency. They only remove the great bulk of government expense from the ordinary democratic process, making it an untouchable “fixed cost.” These policies have turned state government into a pension and benefit society that sacrifices the most innocent needy, since there are no binding arbitration and union contracts for them.

Education policy — that is, social promotion — doesn’t produce a skilled and civic-minded workforce but instead devalues education and creates huge need for expensive remediation. Welfare policy doesn’t reduce poverty but subsidizes antisocial behavior and thereby perpetuates poverty, leaving ever more children fatherless, neglected, undisciplined, demoralized, unhealthy, and even disturbed or criminal.

There will be no saving Connecticut until these mistaken premises are acknowledged and the policies that flow from them changed. That will never happen when raising taxes is an option.

Neither will any change result from the silly posturing done this week by the state Senate’s Democratic leaders. They proposed that the budget negotiations of the governor and legislative leaders be conducted “transparently,” held in public and broadcast on state government’s television network, CT-N.

This “transparency” proposal came from the same Democratic senators who for years have been hiding “rats” — unvetted and disgraceful legislation — in the budget “implementer” bills that are adopted at the last minute by the legislature without review or debate. The “transparency” Democrats almost surely will be shoveling “rats” into law again this year.

Mr. Powell is managing editor of the Journal Inquirer in Manchester, Connecticut.

The New York Sun

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