Droves Of People Are Leaving Our State Because We Tax Them Way Too Much. Maybe, If We Give Them A Little Bitty Bonus To Stay, They Will Not Leave. Then We Can Continue Taxing Them Way Too Much.

(This Blog Posting was originally published on April 18, 2017)

I apologize for this Blog Posting being so long but there is a lot of Silliness in Connecticut.

Somewhere in Connecticut’s past, this bullet-pointed conversation happened in their State House...

(Yes, the people in Connecticut talk in bullet points.)

Ø We need more money.

Ø I have an idea. Let’s tax the other 49 States.

Ø We don’t have the power to do that.

Ø Are you sure we don’t?

Ø I’m not certain and I will check on it but, for the sake of this discussion, let’s assume that we don’t have that power. Let’s continue to kick around some ideas about how we can increase revenue.

Silence...Thinking…Silence

Ø What about cutting spending? Wouldn’t that be like increasing revenue?

Ø Come on now! We were not sent up here to not spend money. We were sent here to spend money and we have done an excellent job of that if I do say so myself.

Silence...Thinking…Silence

Ø The only tried and proven method of increasing revenue I can think of is we will have to tax the people here in Connecticut some more.

Ø Do you think they will stand for that? We have started to hear rumblings that they have taken note of what we have been doing to them.

Ø They have rumbled before. We have not pushed them to the breaking point. Besides, Football Season starts this weekend and they will not pay any attention to us till early February and, we all know what follows February, March (College Basketball) Madness and then the NBA Playoffs. Trust me. We can do this to them a lot more.

Ø OK, I’ll defer to your political savvy. You were right about the last 12 tax increases.

Ø Good! That settles it! Let’s go to Happy Hour!

Ø You know you said the same thing after we decided to enact each of the last 12 tax increases. OK, let’s go to Happy Hour.

Actually, the above Bullet Point Conversation is Foolishness. As you read on below you will see ample evidence that the people of Connecticut have taken notice of their tax burden as evidenced by the fact that they are leaving in large numbers for other states.

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What caused The Fella to start pecking out a Foolishness...Or Is It about little ole Connecticut? To find the answer, read on and learn about Connecticut’s Tale of Taxation Woe...

Ø Connecticut’s progressive tax experiment has hit a wall.

Ø Tens of thousands of residents are leaving for lower tax states.

Ø 25 years ago Connecticut was a low-tax haven for Northeasterners.

Ø In 1991 the state enacted an income tax and it was later made steeply progressive.

Ø The Slippery Slope started doing its slippery thing but, as is usually the case with taxes, it was upward slippery.

Ø In a fine example of Taxpayer Trickery, the top rate on individuals earning $500,000 or more has been lifted to 6.99%.

Ø The beleaguered taxpayers of Connecticut breathed a huge sigh of relief because they had feared that the rate was going to go up to 7%.

Ø Many taxpayers were heard to say, “I’m going to find out if my representative voted to keep the rate below 7%, and if he did, I’m going to be sure to vote for him again”.

Ø In 2012 the Tax Foundation ranked Connecticut’s state and local tax burden second highest in the country behind New York.

Ø Due to recent Property and Income Tax Hikes, Connecticut may now be in the lead.

Ø You don’t need a Yale degree to figure out that the tax hikes have been a disaster.

Ø A net 30,000 residents moved to other states last year.

Ø Since 2010 seven of Connecticut’s eight counties have lost population.

Ø In the last five years, 27,400 Connecticut residents have moved to Florida.

Ø More than 3,000 Connecticut residents have moved to Zero-Income-Tax New Hampshire in the last two years.

Ø In a fine example of the Blind trying to Lead those they believe are the Stupid, many Legislators are denying that tax policies influence personal or business decisions.

Ø After losing General Electric last year, the Governor bribed the hedge funds Bridgewater and AQR Capital with $57 million in taxpayer subsidies not to leave the state.

Ø Other beneficiaries of the Governor’s corporate welfare include Cigna, NBC Sports, ESPN and Charter Communications. (If these giveaways continue, Connecticut is going to have to raise taxes.)

Ø Legislators have now taken the subsidy idea one step further by proposing a tax credit averaging $1,200 for grads of Connecticut colleges who already live in the state to stay in the state after graduation.

Ø It is estimated this tax credit would cost the state $6 million each year assuming only 10% of eligible college grads sign on.

Ø They better pray that more than 10% don’t decide to take the State up on this silly offer. (If these giveaways continue, Connecticut is going to have to raise taxes.)

Ø The elephant in the room and the main reason young people are escaping is the lack of job opportunities because businesses are leaving because of high taxes.

Ø Since 2010 employment in Connecticut has grown at half the rate of Massachusetts and more slowly than in Rhode Island or New Jersey (another high tax state).

Ø Meanwhile, Legislators are worried about a projected $1.7 billion budget deficit next year because tax revenues keep trailing projections. (No Chit Sherlock!)

Ø To make matters worse, the state’s teacher pension bill is projected to grow by a third over the next two years.

Ø The Legislators who are causing all this mess have a solution. Some of these mental midgets want to impose a 19% tax on Hedge Funds’ Carried Interest.

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By now you are thinking I made all this up.

It looks like many of the We’re Gonna Stay Here for $1,200 (Wink Wink) Graduates will use the money to spend on Graduation Parties and then they will move out of state anyway to get a job.

I have an idea! What they ought to do is Build a Wall Around Connecticut!

Did I just hear you say a Wall is a silly idea? Do you want to read something sillier? If so, scroll back up this Foolishness and read Connecticut’s Tale of Taxation Woe again.

Would I kid u?

Smartfella 

Lagniappe June 2019:

Corporate Tax Rate and Corporate Welfare

Ø In 2015 Connecticut imposed a 20% surtax on top of the state’s 7.5% Corporate Tax Rate, effectively raising the tax rate to 9%.
>>Connecticut estimated the Corporate Tax Hike would raise $241 million a year.
>>Revenue increased by only $161 million in 2016.
>>Meantime, the state’s Department of Economic and Community Development, in 2016 alone spent $358 million (mostly on direct payments and loans) to induce businesses to stay in the state or move to the state.
>>This means that Connecticut doled out more than twice as much in Corporate Welfare as it generated from the Corporate Tax Increase.
>>The business handouts cost even more than that because the state tapped bond funds to pay for them.

Thus we have Connecticut’s business model: Raise costs for everyone and then leverage taxpayers to provide discounts for a politically favored few. 

Business Flight

Ø More and more businesses are leaving Connecticut as they get walloped with higher taxes that are bleeding the state.

Ø The state has lost population for the last five years…
>>As stated above, in 2016 GE moved its longtime headquarters from Fairfield to Boston.
>>Hallmark, RBS, Bristol-Myers Squibb, Boehringer Ingelheim Pharmaceuticals and Rogers Corporation have also announced job cuts or moves.
>>Alexion Pharmaceuticals, which had already received $26 million from the state to stay, checked out of New Haven in 2017.
>>While United Technologies will continue making jet engines in Connecticut (at least for now) 100 of its high-paying corporate jobs will move to Boston.

All this could have been averted if only the “Geniuses” running Connecticut had read my Blog Posting of April 18, 2017. If they had, they certainly would have seen the error of their ways and changed their ways…Or would they have if they had?