The Wall Street Journal ran a story today about at least ten states that have the dubious distinction of already raising taxes or are venturing perilously close to doing so in the near future. The Nutmeg State, sadly, made the list of little honor:
Legislators know the increases will be unpopular with residents. “There will be blame, we accept that,” Sen. Eileen M. Daily of Connecticut said earlier this month when she and fellow Democrats announced a budget that raises income-tax rates and expands the sales tax to raise more than $3 billion over the next two years. Connecticut Gov. Jodi Rell, a Republican, has said she would veto the plan.
The article inadvertently highlights one of the many problems with the big tax hikes proposed by the Legislative Democrats last week. Nearly everyone else in our region – Massachusetts, New York, New Jersey – is in the process of raising taxes. The Democrats say that this is good news – that we will continue to be competitive with these other states – while paying no heed to the argument that we would be more competitive if we didn’t raise taxes at all.
At the press conference a week ago, State Sen. Eileen Daily of Westbrook was asked about the 30 percent “surcharge” to be added to business tax bills, with the reporter specifically inquiring about why the hike made sense when many businesses are already slashing payrolls and cutting production. Senator Daily replied that, “only businesses that make money will pay the tax.”
Senator Daily and her fellow Democrats either don’t know or don’t care that if small businesses aren’t “making money”, there are other things they also aren’t doing – like making payroll, covering the rent, or paying suppliers. Imposing additional hurdles to meeting those obligations doesn’t help anyone – least of all the State, because empty storefronts don’t pay taxes, either.
The long term solution to generating more tax revenue isn’t simply raising taxes – it is growing the tax base. But until government stops pretending to be the solution and starts being recognized as the problem, here we will stay, stuck on the list of lemmings headed off the cliff.