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Tax Freedom Day Arrives -- Finally
May 2, 2005
Tax Freedom Day Arrives -- Finally
Think Tank Comments on State’s Immense Tax Burden, Issues New Guide to Connecticut Taxation
Hartford, May 2, 2005 -- On the eve of Connecticut’s Tax Freedom Day -- the date on which the Tax Foundation estimates state residents stop working for government at the federal, state, and local levels -- D. Dowd Muska, the Yankee Institute's Philip Gressel Fellow for Tax and Budget Policy, offered the following statement:
When the Nutmeg State's taxpayers head off to work tomorrow, they’ll finally start earning income that they can keep for themselves. Over 120 days into 2005, Connecticut's Tax Freedom Day has finally arrived -- later than it did in the other 49 states.
Our state's tax burden is a bipartisan scandal. For decades, elected officials from both major political parties have raised taxes and fees to the point where the Nutmeg State faces the heaviest tax burden in the nation. Politicians in Washington, Hartford, and your home town have consistently chosen to make government bigger and broader, and then passed the bill on to you.
The lateness of Tax Freedom Day in Connecticut is not due merely to the confiscatory income taxes assessed on Connecticut's high-income earners. The combined state-local tax burden for Connecticut is now the 12th highest in the nation.
It's outrageous that Connecticut, a wealthy state where problems such as poverty, crime, and lack of health insurance are all well below national averages, taxes its citizens to support a state budget that in inflation-adjusted, per capita terms has grown by more than 440 percent since 1970.
But let’s not forget the local level. Connecticut's property taxpayers are burdened by both unfunded state mandates that drive up the cost of municipal government and local officials who constantly search for new ways to boost their towns' budgets.
Unjustified school spending, absurd bonding commitments, generous compensation packages to government employees, massive corporate welfare, and outrageous subsidies to the arts are rampant at the state and local level. Until unnecessary spending is curbed -- and unneeded programs and agencies eliminated -- tax freedom in Connecticut will continue to arrive far too late in the year.
If Connecticut's economy were booming, our heavy tax burden might be easier to bear. Unfortunately, Connecticut suffers from the worst of both worlds: an unfair tax burden and a sluggish economy.
That should come as no surprise. Research consistently shows that high taxes retard economic growth and drive companies and residents into other jurisdictions.
Connecticut's tax burden is not the result of evil people, but bad policies based on misguided ideas and assumptions. Happily, there are alternatives to the Nutmeg State's high taxes and stagnant economy.
Free-market, pro-growth policies have proven their effectiveness in other states and around the world. It is possible to lower taxes and reduce government spending, while maintaining the necessary and legitimate functions of the public sector. The Yankee Institute exists to document these ideas and reforms, and apply them to the Nutmeg State.
Connecticut's hardworking taxpayers deserve fundamental reform of the way governments at the local, state, and federal levels fund their activities. It's a disgrace that our state faces the heaviest tax burden in the nation.
D. Dowd Muska is the Yankee Institute's Philip Gressel Fellow for Tax and Budget Policy.
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The Yankee Institute for Public Policy, Inc. is a nonpartisan educational and research organization founded more than two decades ago. Today, the Yankee Institute's mission is to "promote economic opportunity through lower taxes and new ideas for better government in Connecticut." The Yankee Institute for Public Policy, Inc. is classified by the IRS as a 501 (c) (3) public charity. Contributions are deductible to the extent allowed by law.
