American Elephants

All Our Quarrels Played Out In Real Life by The Elephant's Child

We have an interesting experiment going on. Our admiration for New Jersey’s Republican Governor Chris Christie knows no bounds. He has vetoed tax increases, cut spending and is trying to reform public pensions. He has inspired everyone with his tough, determined leadership.

In the neighboring state of Connecticut, Democrat Governor Dannel Malloy describes himself as the “Anti-Christie.” He wants to repair the Connecticut budget deficit with a huge tax hike, and the legislature may approve it this week. Gov. Malloy wants to raise taxes on cigarettes, gasoline, internet sales, drugs, booze and wealthy estates. He wants to raise property taxes by $500 for the average homeowner.

Mr. Malloy wants to raise the sales tax to 6.25% from the current 6% and add another 0.1% surtax for Connecticut cities.  He would apply the sales tax for the first time to dozens of services including such things as parking, cosmetic surgery, yoga classes, manicures and pet grooming—broadening the base and raising rates.

Wait, there’s more. He wants to impose a sales surtax on “luxury” goods that would apply to yachts, private planes, classic cars, clothing costing more than $1,000 and jewelery.  Like the president, Gov. Malloy is trying to sell his tax hikes as “shared sacrifice.”And he wants every Connecticut worker who earns more than $50,000 to move into a higher tax bracket. Those who make more than $500,000 would find their taxes raised  from 6.5% to 6.7%, but Democrats in the legislature want to raise it to 7%. Tax the rich!

There’s history behind all this.  For 200 years, Connecticut paid their bills without an income tax, and had become one of the richest states in per capita income.  In 1991, Democrat Governor Lowell Weicker sold an income tax as a one-time reform that would keep sales and property taxes low.  Instead, a state that had been financially solvent for so long is now raising income taxes for the fourth time in twenty years.

Governor Malloy’s tax hikes will allow him to keep on spending, and he plans to increase it by 2.5%.  Where’s the fun in being a governor if you have to cut spending or do battle with entrenched unions to reform pension excess?  Connecticut was once a refuge from onerous taxation in New York, New Jersey, Rhode Island and Massachusetts.  Now it will become just one more slow growth, union dominated, job-killing example of what not to do.  To see how totally divergent views play out, we’re going to have to pay attention.

What will happen?  Will the new taxes and new programs return Connecticut to solvency, or will the people of Connecticut and the businesses in Connecticut follow so many of their neighbors and move to Florida and Texas? I suspect that we know the answer, but it will be interesting to see how it all works out.

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