The Wall Street Journal takes Connecticut Gov. Jodi Rell to task for her proposal to raise income taxes on individuals with incomes above $500,000 from 5% to 6.5% this morning… The editorial titled “Jodi Corzine” pulls no punches:
Connecticut grabs $7,007 in state and local taxes per man, woman and child resident, according to the Tax Foundation, more per capita than every state but New York and New Jersey. That’s hardly the company any state would want to keep these days, but the politicians in Hartford seem intent on following Trenton and Albany off the tax-and-spend cliff.
This week Republican Governor Jodi Rell proposed a $1-billion-plus income tax hike, raising the top tax rate to 6.5% from 5% on individuals with incomes above $500,000 and couples with earnings above $1 million to close an expected two-year $8.5 billion budget deficit. The tax hike would be retroactive to January 1, meaning the government would snatch money that residents have already earned. Perhaps she aspires to the nether-world approval ratings of New Jersey Governor Jon Corzine.
Given the size of its deficit, it’s hard to believe that for 200 years Connecticut balanced its budget without any income tax and became the richest state in the bargain. That changed in 1991 when then-Governor Lowell Weicker pushed the state’s first-ever personal income tax with a promise that the rate would remain flat at 4.5%. But the next time the state couldn’t pay its bills, in 2001, the legislature raised Mr. Weicker’s tax to 5%. In 2007, Ms. Rell wanted more money for the schools, so she proposed raising the income tax again. That plan failed, but now comes her “millionaire surcharge,” which Democrats have eagerly endorsed.
The most surprising and frightening statistic from the Journal’s editorial is this one:
Since the income tax became law, Connecticut has experienced a long, slow exodus of jobs and people. The Yankee Institute notes the astounding fact that since 1992, the year the income tax went into effect, businesses in Connecticut have hired a grand total of zero net new workers.
Gov. Rell and the state legislature would do well to remember that and the state’s declining population, Connecticut’s population has declined in every year but one over the last decade, while looking for solutions to our current fiscal crisis. Raising taxes and continuing to spend money we don’t have is not the answer.