“Taxpayers have done their job – it’s time for legislators to do theirs”
April 29 – Today, the Yankee Institute – Connecticut’s only independent free-market think tank – came out swinging against the legislature’s plan to raise taxes in order to balance the state budget.
“Four years ago, the governor and legislature imposed the largest tax increase in state history on Connecticut’s people,” said Yankee’s president, Carol Platt Liebau. “Now, the politicians are back for even more. Instead of setting priorities and making tough choices to balance their budget – as Connecticut families must – they simply demand more money from taxpayers across the state.”
“More than anything else, this proposal is disappointing for everyone who believes Connecticut can do better,” Liebau said.
By seeking to impose higher taxes on “the wealthy,” the Finance, Revenue and Bonding Committee will only guarantee that more of Connecticut’s top earners will flee the state. As the Yankee Institute policy brief High Taxes Hurt documented, if just the top 357 taxpayers leave Connecticut, everyone else’s income tax bill will increase by at least 13 percent. And that’s just income taxes.
What’s more, a tax increase on “the rich” will fall particularly hard on small businesses – an engine of job growth -- which are often taxed at individual rates.
Since 1993, Connecticut has lost $8.8 billion of taxable income to other states, even after accounting for people moving into the state. That amounts to a loss of about $400 million in revenue for the current year. Over the last 22 years, there’s been only one (2003) when more people have moved into Connecticut than out of it. This exodus means lost tax revenue, as well.
“By raising taxes, politicians are repeating the same failed approach that got us here,” Liebau said. “What the politicians must realize is this: Taxpayers have done their job – it’s time for legislators to do theirs.”