“I don't give reasons. I give orders!” -- Captain Ahab, Moby Dick
It seems only
yesterday that Governor Chris Christie of New Jersey was threatening to hold a
net on the borders of Connecticut and catch companies as they fled a tax prone
Democratic Governor and majority Democrats in the state’s General Assembly.
Governor Malloy derided the notion. Christie, a blustery Republican, was an
easy punching bag. Not so Governor Andrew Cuomo, who recently met with CEO of
General Electric Jeff Immelt to discuss moving GE business from Connecticut to
New York.
Mr. Cuomo is a
Democrat, which makes him both more lethal and less vulnerable to attack from Connecticut’s
Democratic governor. Mr. Malloy does not relish spitting in the Democratic
Party soup, particularly since he soon will occupy the august position of
Chairman of the Democratic Governors Association. One can only imagine what the
cloakroom discussion between Mr. Malloy and Mr. Cuomo might be like at the
first Democratic Governors Association meeting following Mr. Malloy's installation
as Chairman.
This is a tousle
crony capitalist progressive Democrats have brought upon themselves. The
progressive idea is to tax the rich – read, large corporations – at a
progressive rate, collect someone else’s money and distribute it, Robin
Hood-like, to the victims of capitalism. The difficulty with the idea is, as
the late Maggie Thatcher memorably said, “sooner or later, you run out of other
people’s money.”
Connecticut, which
has suffered stoically through two massive tax increases – not counting former
Maverick Governor Lowell Weicker’s punishing income tax – is running out of revenue
options. At the same time, Connecticut’s one party Democratic state is loathed
to cut spending; majority Democrats would rather cut taxpayers' throats than
cut union benefits and salaries. Since spendthrift Democrats cannot impose
“shared sacrifice” on the very people upon whom they depend for re-election to
office, and have at the same time exhausted their tax revenue resources, there
are only three courses open to them: impose crippling taxes on large businesses
in the state, stand outside the crony capitalist White House with a tin cup in
your hand hoping for a generous federal handout, or fob off on someone else the
real-world consequences of your own problem-ridden policies.
The two most
prominent progressive Democratic leaders in the General Assembly, Speaker of
the House Brendan Sharkey and President Pro Tem of the Senate Martin Looney,
have strenuously attempted to wring more tax dollars from large Connecticut
businesses by imposing upon them a so called unitary tax. Mr. Malloy, who sent to the General Assembly a
budget that was not in balance, assented to the scheme by signing off on
sizable business tax increases, after which GE, among other companies, began to
look for the exit signs. When Mr. Immelt
protested that his company would begin scouting out a better tax climate
elsewhere, he was derided by Mr. Sharkey as a tax scofflaw. Tax increases, the brier
patch of Connecticut’s regulations and Mr. Sharkey’s derisive remarks have
opened the door to Mr. Cuomo, not the only GE suitor.
By the time Mr.
Malloy and the progressive leaders of the Democratic dominated General Assembly
nipped nearly a billion dollar tax increase by a few millions and postponed
imposition of the unitary tax, Mr. Immelt and other CEOs of large Connecticut
companies were footloose. Every business, in or out of state, knows that
Connecticut cannot control its spending and is therefore doomed to meet
inescapable budget deficits through ever-mounting tax increases.
Bottom line: When
you cannot raise revenue from a tax-flogged middle class, when large
Connecticut insurance companies are cannibalizing each other in response to profit-reducing Obamacare regulations, when the federal government itself is paring
back donations to states, there is only one course open to you: change the
subject and blame all the difficulties that flow from your own reckless policies
on the opposition party. But here too, one confronts a difficult and stubborn
reality: There are NO Republican fingerprints on any of Mr. Malloy’s budgets,
nor have Republicans been successful in altering the progressive forward motion
of the state under the direction of Captain Malloy and his first and second
mates Sharkey and Looney. It’s their ship, their course, their ocean.
Off in the distance
one catches a glimpse of a whale’s white spout. As if in answer to the
captain’s curse – “Speak not to me of blasphemy man; I’d strike the sun if it
dared insult me!” – Moby Dick cleaves the waves.
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