America


$71 Billion Tax Debacle Brewing in Connecticut


C BY KEITH KOFFLER


onnecticut has become a poster child for fiscal mis- management — offering other states crucial lessons


on how to destroy jobs, remain insol- vent, and depress an economy. Today, the “Nutmeg state” is mired


in the worst unfunded liabilities crisis in the nation, second only to Illinois. Yet it wasn’t that long ago that Con-


necticut lived a charmed existence, one of the few states in the northeast without an income tax. Home to Yale University, the state


still boasts numerous major phar- maceutical and insurance company headquarters and its wealthy “Gold Coast” communities along Long Island Sound are populated by busi- ness leaders who commute to New York City. But clouds started building on the


horizon in 1991 when then-Connect- icut Gov. Lowell Weicker signed into law a state income tax that at the time seemed pretty reasonable: a flat tax of 4.5 percent. Ah, how times have changed. The state’s tax rate has jumped sev-


16 NEWSMAX | JANUARY 2019


eral times since then, and has taken on a progressive tilt that increasingly punishes the wealthy. The steamroller really began to flat-


ten taxpayers in 2009. That’s when Connecticut was slammed by a sharp drop in tax revenues during the reces- sion that began the previous year.


“ A bigger government wants more to eat and more to do and it expands in every way because you made it bigger .” — Grover Norquist, president and


founder of Americans for Tax Reform Facing a deficit of nearly $3 bil-


lion, outgoing GOP Gov. Jodi Rell lost a major donnybrook with the state’s Democratic legislature, and signed a bill hiking taxes by about $1 billion. It also established a new 6.5 percent income tax bracket for those earning


more than $500,000. But everyone making $10,000 or more would pay 5 percent of their income to the state. Then in 2011, a $1.5 billion tax


increase was signed by Democratic Gov. Dannel Malloy. It raised taxes on income, corporations, and a vari- ety of goods and services, while increasing the general sales tax from 6 percent to 6.35 percent. But tax-hun-


gry leaders in Hartford weren’t done yet. In 2015, they raised another $900 million in taxes, includ- ing the rollback of $230 million in tax cuts that had been approved before being reversed. So why did each increase in taxes


MALLOY


trigger a cycle that led to a need for even greater tax hikes? “Because you just make the gov-


ernment bigger,” explains Grover Norquist, president and founder of


Continued on page 18


MAP/OMERSUKRUGOKSU/GETTY IMAGES / WATERFRONT/JAMES KIRKIKIS/SHUTTERSTOCK MALLOY/ MANDEL NGAN/AFP/GETTY IMAGES


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