Sunday, May 21, 2017

The Parable Of The Leaking Bucket

A short five minute address today -- Sunday, May 21, 2017 -- at the state capitol in Hartford

 I’ve been asked to say a few words about taxes, which has brought us here today. I should say it’s heartening to see gathered here many thoughtful, peaceful, responsible, tax-paying, non-deplorables. I only have fire minutes to review years of tax thuggery, and the best way do it is by means of a parable that might be called “The Parable of the Leaking Bucket.”

There is a hole in Connecticut’s milk bucket, and through it our precious revenues are leaking to other states. This disaster has now been confirmed by Department of Revenue Commissioner Kevin Sullivan and economist Don Klepper-Smith.

The problem with the leaking bucket is the hole, not with the quality or quantity of milk or the tears of those crying over it because it has spilled out of the bucket. The problem is NOT the deficit -- the spilled milk -- the problem is THE HOLE -- overspending. If you do not patch the spending hole, you will continue to lose the milk.

It seems simple, doesn’t it?

For more than a quarter century, our politicians have been crying over that spilled milk. The problem, then Governor Lowell Weicker said to himself in 1991, is that there is not enough milk in the pail. We need a larger bucket. Let us have an income tax.

And so it happened.

The last pre-income tax budget of Governor William O’Neill was $7.5 billion. It’s three times that today. Mr. O’Neill’s budget deficit upon leaving office was $1.5 billion. We’ve just been told Connecticut’s deficit will be $5 billion during the next fiscal year.

Connecticut, the magisterial Hartford Courant said whenever a deficit occurred in the post-Weicker years, did not have a spending problem; it had a revenue problem. The paper’s message was plain and much appreciated by spendthrift politicians: Whenever you see a deficit coming through the rye, do NOT cut spending, always a painful remedy that would patch the hole; instead, raise taxes – milk taxpayers and spread it around. Get a larger bucket – forget the hole, the hole is not a problem.

And so it happened. When Governor Dannel Malloy was put in charge of the milk wagon, he increased taxes twice – the first the largest, and the second the second largest tax increase in state history.  And guess what has happened? As taxes increased, revenues decreased. It seems Arthur Laffer may have the last laugh after all.  That hole was drilled into the bucket by people like Mr. Weicker and Mr.  Malloy and other progressive legislators behind these unheeding stones in back of me who have ears that hear not and eyes that see not.

Mr. Klepper Smith is now pointing somewhat frantically to the spending hole. Connecticut leaders, the people slumbering behind these walls, need to spend more time talking about, Mr. Smith said, “how to rein in our spending problem… We are treading water.” That’s a poetic way to put it: We are underwater. A weakened Connecticut economy, Mr. Klepper Smith warned, will put us at the head of the line should we enter another recession. Connecticut will be, as it is now, first in, last out.

So then, there is a spending problem after all. And Mr. Sullivan, who never met a tax increase he wasn’t willing to court and marry, agrees. Hallelujah!

Let’s try and wrap our brains around this stunning revelation from Mr. Sullivan. Tax cuts are beneficial, a chastened Mr. Sullivan now thinks. They leave disposable income in the hands of people who know better than Mr. Malloy how to invest money.

Here is the moral underlying Mr. Klepper Smith’s and Mr. Sullivan’s perceptions: If tax decreases are good, then tax increases must be – resisted.

You are the resistance, and I have encouraging words for you from Sam Adams, known during his own day as “the father of the American Revolution.” Adams is here addressing the sunshine patriots of his day, but his admonition applies as well to the sunshine patriots of our day. Pass these words down to your children and grandchildren. As I leave you, I will leave them as the last tingle in your ears: 
“If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen.”

Thank you.

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