Bad Economics

Connecticut is #1!!! But it’s not time to celebrate.  Connecticut is the most heavily taxed state.

http://reason.com/blog/2015/03/20/connecticut-residents-work-6-weeks-longe

That’s not a good thing for Connecticut and even worse, it’s not a good thing for the US.  Connecticut is and has been one of the US’s nurseries for technical invention and innovation.  The American system of manufacture happened up and down the CT River valley and the optical equipment that drove the integrated circuit electronics revolution was invented almost literally next door to where I live.  The problem is that starting about 50 years or so ago the economy of the state started to get milked by our politicians, both Republican and Democrat.  We’ve had every spending program imaginable and because of the state’s wealth the downsides of the increasingly heavy taxation were hidden from view. At least at first.

It seemed though that after every recession a few more factories closed and were not replaced.  Entire industries such as brass and rubber just died.  The state is scattered with semi abandoned and shuttered mill buildings like the one above.  Hardly a symbol of prosperity.  There are bright spots, in the business parks scattered around the state, but even there the “for lease” signs are becoming more and more prevalent.  The employment picture in the state reflects this.  The state is not developing the high tech engineering jobs the way it did in the past. Being in that market, one way or another for most of my life I’ve seen it happen.

Meanwhile local government, like my town chase developments like this:
http://www.thehour.com/news/norwalk/exclusive-developer-unveils-look-of-million-regional-shopping-center-for/article_3c46e4ac-f0bb-11e3-8265-0017a43b2370.html

I know South Norwalk and this is whistling in the breeze considering how much retail space is already available for lease and the fact that all the local malls are already struggling.  This project is doomed from the start.  What the state needs is industry.  We have plenty of creative talent and available space.  What is needed is a friendly environment.  Which means two things.  The state is going to have to cut taxes, drastically and solve the energy situation and bring energy rates in line with national rates.  That means we need at least two new nuclear generating stations, right now.  Unfortunately New England has been run by idiots and they’ve managed to put the golden goose on life support with continually increased taxes and by turning a blind eye to the state’s electricity situation.

Well they’ve sowed the wind, now all of us who live in New England will reap the whirlwind as the people mostly responsible move to new havens as the state begs  them not to leave.  Our liberal elites party with the Washington bigwigs and feed our vote buying pols with donated cash while the state’s  businesses and working stiffs get stuck with the ever increasing tax bill.

http://www.foxbusiness.com/markets/2015/02/09/please-dont-leave-connecticut-tax-agency-keeps-close-watch-on-state-super-rich/

http://newyork.cbslocal.com/2015/02/09/connecticut-to-billionaire-taxpayers-please-dont-leave-state/

Here’s what passes for forward thinking on the part of the CT State government:
Connecticut Gov. Dannel Malloy outlined an ambitious budget on Wednesday that combines tax cuts, spending increases and new revenue to address a $1.3 billion deficit. Malloy wants to lower the sales tax from 6.35 to 5.95 percent to support low-income and middle-class families, but also repeal a sales tax exemption on clothing set to take place in July. On the business side, the governor would make a 20 percent surcharge on the corporate profits tax permanent, reduce the size of business tax credits for research and development and capital purchases, and eliminate the $250 business entity tax on small businesses. Altogether, Malloy’s changes to business taxes would increase revenue by $300 million. The rest of the deficit would be made up for with deep cuts elsewhere; Medicaid and mental health services would be especially hard hit, and the budget for state parks would be cut by 25 percent. Malloy affirmed his commitment to avoiding cuts in state aid to municipalities.  He also did not propose using rainy day funds to close the state’s budget gap.   

from here:
http://www.taxjusticeblog.org/archive/state_tax_issues/connecticut/

I’m sorry, but Malloy’s tax increases are going to hit the working people the hardest as more businesses leave.  The death spiral will continue until the entire state assumes the appearance of Bridgeport.  A sad end to what was once a place of glorious prosperity.

For more on the dysfunctional economy click Here or on the tag below.

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