National Democrats are, ever so gently, following socialist Pied Piper U.S. Senator Bernie Sanders back to the cave. Connecticut Democrats, progressive to the bone, are likely to go along for the ride. The Pied Piper, it will be recalled, was hired by the mayor of Hamlin to rid the town of rats, which he did by piping them an enchanting tune. The mayor of the town refused payment, and the Pied Piper later avenged himself by piping the town’s children to a cave, where they were never heard from again. There are two morals to the story: debts incurred must be paid, and the instruments of destruction you use against your enemies easily may be turned upon yourself.
Even amateur historians will note that the first tax on personal income levied in 1861 to help pay for the Civil War was the camel’s nose in the tax tent. Ten years later the tax was repealed. In 1894, Congress enacted a flat rate Federal income tax, ruled unconstitutional the following year by the U.S. Supreme Court because the direct tax was not apportioned according to the population of each state, an imperfection eliminated in the 16th amendment ratified in 1913. The first 1040 form made its appearance after Congress levied a 1 percent tax on net personal incomes above $3,000 with a six percent surtax on incomes of those earning more than $500,000, essentially a millionaire’s tax.
The camel that occupied the tent after 1913 has metamorphosed over the years. The income tax is now progressive rather than a flat tax. And owing to political intervention, the tax is riddled with exemptions, as a result of which, billionaire Warren Buffett noted some time ago, those who can afford to buy politicians pay less in net taxes than their secretaries. The flat tax that began as a modest levy on high earners and millionaires has now trickled down to the bourgeois and small to medium sized companies. For companies the tax is a pass through to consumers. All business levies are recovered in higher prices for goods and services. The working class pays up and shuts up. State taxes are somewhat different; One can always move from a high to a lower tax state. In federal taxes, Connecticut ranks number 1, and the state is number 12 in state taxes. And of course, tax boosts increase the rate of spending. “Although the income tax brought in $126 billion between 1991 and 2014,” the Yankee Institute tells us, “Connecticut's government spending grew 71 percent faster than inflation, leading to budget deficits and, naturally, tax increases.”
Enter Bernie Sanders, Vermont socialist. A few months ago U.S. Senator Dick Blumenthal shared a dais with the populist socialist, who would like nothing better than to replace private insurance companies in Connecticut with federal bureaucrats’ dispensing a one-size-fits all national socialized health care system enjoyed by other countries that have seen the socialist light -- such as Venezuela. The two destructor-elect presidents of Venezuela, career military officer Hugo Chavez and his successor Nicolás Maduro, a bus driver and trade union leader, would both happily affirm the Sanders plan.
Events in Venezuela should be – but are not -- instructive. Prime minister of England Maggie Thatcher used to say, “The problem with socialism is that, sooner or later, you run out of other people’s money,” after which you run out of toilet paper. The working class in Venezuela is now digging its three meals a day out of garbage bins. National Democrats, who appear to be listening raptly to the music piped to them by socialist Sanders, have learned nothing from recent history. Democrats, whose well-laid campaign plan envisions the plundering of wealth producers, rightly do not fear that the redundant rich in the United States, reacting to their crowd-pleasing plan, will bolt to Venezuela.
Progressive Connecticut now operates on the same set of policy assumptions as the national socialists of the Democrat Party, the most poisonous of which is that if good government is good, more government must be better. However, since government of every kind does not produce wealth but merely confiscates it, redistributing wealth according to its own lights, taxation, the means by which the redistribution is effected, swells spending and creates debt that is progressively impossible to discharge because payments soon exceed the ability to pay. This is exactly what has happened in Connecticut.
And the upcoming elections will be a plebiscite on the question: Can people in the state – journalists too – plot a course that does not lead to a dark cave in which prosperity will be permanently interred.