Connecticut Democrats again prepare to hit us with higher taxes
The Connecticut Democrat-controlled legislature might as well grab all state residents and shake them upside down, freeing every cent from our pockets. At least that would be a straight-forward approach, a simple and clean fleecing.
Instead, every new tax-related whisper coming from Hartford is insulting. The self-righteous, all-powerful, progressive left spits out new ways to tax us almost daily and expects the state’s residents to thank them and ask for another.
The ultimate goal: Separating you from your money.
This is essentially the same group of politicians with the same ideas who have fiscally failed us over and over. Tax and spend and then tax again. It’s like the state-revenue version of the shampoo instructions: “wash/rinse/repeat,” but instead “tax/spend/repeat.”
In case you missed it, Democratic leaders in Hartford, led by Gov. Ned Lamont, have been advocating an avalanche of regressive taxes including tolls and sales tax expansion, which would mean taxes on boat storage, digital downloads, textbooks, newspapers, campground rentals, bicycle helmets, child car seats, vegetable seeds, laundry services, non-prescription drugs, etc., etc. — oh, and on plastic bags.
There are rumblings of a half-penny sales tax surcharge to funnel money into poorer communities. (Don't we already funnel enough money into poorer communities?) And I almost forgot about grabbing an extra percent for paid family leave.
The total tax increases, with tolls, would be close to $2 billion.
Those Democrats who don’t want to expand the sales tax, or at least not expand it as much, offer instead a 2 percent surcharge on investment income. This would set the top rate for capital gains to 8.99 percent. That number would place Connecticut as the sixth highest capital-gains tax state in the country. Only California, New York, New Jersey, Oregon and Minnesota would be higher. A capital gain occurs when you sell something for more than you spent to acquire it.
Sure, this happens with big investments, but it applies to personal property, too. Buy a set of vintage baseball cards for $2,000 and sell it for $8,000 a month later, and you have a $6,000 capital gain.
According to a recent article by the Tax Foundation, Connecticut has $390 billion in controlled hedge-fund assets with the third most hedge fund managers in the country. These professionals manage 13 percent of the country’s hedge-fund assets. They have money and are mobile. If Connecticut increases their taxes by 2 percent, they can pick up and move to a more tax-friendly state. We’ve seen this same play before, recently with Edible Arrangements taking their business to Atlanta.
And it’s not just businesses. Individuals and families are leaving this toxic tax environment and taking their windfalls to other states, too. According to the USA Today, "The population of Connecticut shrank by 0.2 percent in 2016, the fourth largest decline of any state."
Think about it. You get lucky on a mutual fund or stock and you want to cash in the profits. You bought it for $20,000 back in 1990 and now you are ready to sell it. If you sell the stock, you would get $400,000 total, or a $380,000 profit. Well done, you took a risk and it paid off.
But wait. If you cash out in Connecticut under this proposed tax-hike bill, you will have to write the Department of Revenue Services a check for almost $35,000. That’s particularly unfair because you would get whacked with a federal capital gains tax on top of it.
Take your investment profits to Florida or Texas, however, and you owe that state nothing.
Want to keep folks from leaving Connecticut? Lower their taxes.
What if Connecticut, for example, cut spending and lowered its capital gains tax? People might actually come back to this great state to live or retire. Instead we face another short-sighted, state-endorsed money-grab.
Why can’t Connecticut begin selling the billions of dollars’ worth of surplus state-owned property — expanding the commercial tax base and ending the financial burdens of building and grounds upkeep?
How about if the state privatizes the Department of Motor Vehicles and perhaps parts of the energy and environmental agency?
Dump programs that are ineffective losers. Make some tough choices. Put a freeze on any program not deemed life-essential.
How about zero state-wage increases until we have a Connecticut that's finally in the black?
How about if the state helps the feds enforce illegal immigration laws and ends all sanctuary city policies, in the process creating substantial state savings?
Stop the insanity of tax and spend. It doesn't work.
Lee Elci is the morning host for 94.9 News Now radio, a station that provides "Stimulating Talk" with a conservative bent.
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