Friday, June 08, 2007

Will The Fat Lady Please Sing

Taxpayers, their own belts tightened, may breathe a sigh of relief that the current legislative session is officially over. Of course, it’s never over until the fat lady sings, but this year, the summer of our discontent, we narrowly escaped some idiocies, mostly because Democrats, the dominant party in the legislature, ran out of time.

This was the year that progressives in the Democrat Party were poised to fleece the state’s millionaires, but there did not seem to be, even among the general voting public, the necessary support for their program.

The “millionaire’s tax,” embraced with wild enthusiasm some time ago by progressives such as mayor of New Haven John DeStefano, quickly trickled down to wage earners making about $250,000 a year.

Democrats argued that their re-vamped plan would effectively provide tax relief to middle class wage earners, and when Governor Rell, showing some spine at last, refused to sign the legislation, the big guns in the party were brought out to accused her of not caring for hard pressed middle class wage earners, one of the capital sins progressives usually assign to anyone who scrutinizes spending.

The notion that those whom fortune has favored ought to pay a greater burden of taxes is one of the brightest crayons in the progressive’s coloring box. Yet, no one other than progressive politicians appeared too excited about implementing the Democrat plan this year, and Democrats, under the leadership of President Pro Tem Don Williams in the senate and Speaker of the House Jim Amann, were not able to summon enough votes to overcome Rell’s veto.

Why was the plan, tailored to appeal especially to the middle class, such a dud?

It’s always possible that people in Connecticut are not amnesiacs. Who knows, some of them may recall that the federal income tax began as a one percent tax on millionaires. Over the years, that tax has metastasized so that Joe Lunch Pail now is delivering up to the federal government a large chunk of his paycheck that otherwise might be spent on a mortgage, college tuition payments or political contributions to the Democrat Party.

The Connecticut state income tax, a relatively new levy, is not, practically speaking, a flat tax. Some features in Connecticut’s tax policy make it slightly progressive. And, of course, on the distribution end, tax revenues are progressively spent in Connecticut: Hartford receives much more in state funds for education than, say, New Canaan.

When the income tax was instituted by then Governor Lowell Weicker and his Office of Policy Management chief Bill Cibes, budgets began increasing by leaps and bounds. The last non-income tax budget was about $8 billion, and this year’s budget – if the Democrat controlled legislature ever gets around to submitting one – is more than double that.

So then, state politicians, both Republican and Democrat, have been spending lots of money, and few people – other than the creative thinkers over at the Yankee Institute – have proposed serious measures to address the spending problem. Indeed, a web search on Connecticut’s major media sites for “spending cuts” yields a pitiful return, which means few politicians in the state have been thinking about spending in a creative way.

No so long ago, the chief political writer for a statewide paper said in one of her columns, “Connecticut does not have a spending problem; it has a revenue problem.” This thinking, very progressive, is mirrored in the state legislature. The state this year has no revenue problem: Its treasury is flush with money. But even when the surplus was approaching half a billion dollars, both Democrats and the governor proposed an increase in the state income tax.

The surplus having grown to embarrassing proportions, nearly a billion dollars, the governor, chastised by budget hawks in her own party, backed away from her plan to increase the income tax, but Democrats are still at the same old stand, peddling the same old nostrums.

There are signs -- most especially in the way white and blue collar workers have rejected in countless referendums over-sized municipal budgets -- that people are fed up with the obvious spending problem. If our politicians can’t cut taxes when the state is running a deficit, and they can’t cut taxes when the state is running a surplus, when may taxes be cut? The answer to that question, coming from the party of Ella Grasso and Bill O’Neill, both budget hawks, appears to be -- “Never.”
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