Posted on 08/31/2009 10:31:56 AM PDT by Graybeard58
Almost everyone has known for months that the next biennial state budget would be a patchwork of overstated and phantom revenues, understated expenses, unwise and unnecessary borrowing, and billions in one-shot revenues. Gov. M. Jodi Rell moved the state closer to that reality last week by capitulating to your Democratic legislative supermajority on gigantic tax increases in the expectation of getting a comparatively small concession on spending.
The immediate effects of her "compromise" aimed at closing the $8.56 billion biennial deficit for which she and the Democrats are responsible are bad enough: more than $1 billion in higher taxes confiscated through a retroactive 30 percent increase in the marginal income-tax rate on "millionaires" making $500,000 a year; a 50 percent tax increase on smokers; a temporary 10 percent tax surcharge on corporations with adjusted gross incomes of $100 million or more. Almost all of this would be on top of the estimated $500 million in higher fees and taxes she'd proposed previously.
Her hapless targets' tax burdens already are inordinately large, but those groups are sitting ducks when it comes time to "enhance revenues" because most people who pay taxes are not chain-smoking $500,000-aire businessmen.
But in addition to relying on more than a $1 billion in higher taxes and fees, she recklessly uses billions in one-time revenues such as federal "stimulus" dollars to create even larger deficits in future fiscal years and counts on $520 million in cost reductions the Demo- crats almost certainly won't agree to in full. She also puts $1.2 billion in spending on the state's credit card, which is in addition to the almost $1 billion she and the Democrats are about to charge to pay for all their deficit spending in the fiscal year that ended June 30. And everything she proposed is subject to further negotiations with the Democrats, meaning spending, taxes and perhaps borrowing will be higher still.
Her compromise is just a short-term political calculation with long-term ramifications almost no one is considering. The Demo- crats will see to it that her proposed reduction in the sales tax to 5.5 percent will be temporary, and her 10 percent surcharge on corporate taxes will be permanent.
She said lowering the sales tax would create 8,300 jobs, but she didn't estimate how many thousands of jobs and their associated taxes would be lost to the millionaires' tax. Meanwhile, eliminating the death tax, which affects only those estates worth $2 million or more, itself could be reversed soon after the Jan. 1 effective date as a sop to labor unions, which don't believe the governor's budget soaks the rich enough.
But it's the governor's capitulation on a more progressive income tax that should have middle-class taxpayers concerned. Hereafter, she and the legislature would be liberated to add new, higher rates for actual millionaires whom they can continue to demagogue as still "not paying their fair share." More ominously and likely, however, they simply will lower income thresholds to catch $200,000-aires and $100,000-aires and eventually $50,000-aires, which the Democrats have been dying to do for years. In other words, you may have dodged the tax bullet this time, but sooner than you expect, your state leaders will be back gunning for you so they never have to reform their spendthrift ways.
Ping to a Republican-American Editorial.
If you want on or off this list, let me know.
Though this editorial is about Connecticut, I decided to ping the list anyway because Connecticut and Gov. M. Jodi Rell who calls herself a Republican is emblematic of every government body that is controlled by democrats & rinos, including national, state, county, city, right down to the smallest village run by democrats, one and all are basket cases.
SOCIALISM ALWAYS FAILS.
Ya got that right!
Thanks for the ping Graybeard.
“...20 million in cost reductions the Demo- crats almost certainly won’t agree to in full...”
or if they do agree, they are lying to her, and they will put their hand in her face and push her aside. Not to worry. Republicans are pushovers.
“.....your state leaders will be back gunning for you so they never have to reform their spendthrift ways.”
We know that here in California.
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