whitebeard
06-06-2015, 06:29 AM
From WSJ
The last time we visited (http://www.wsj.com/articles/worse-than-illinois-1432939572) the formerly great state of Connecticut, Democrats were preparing to raise taxes again after promising not to when they ran for re-election in 2014. This week they did the deed, and the politicians seem shocked that the business community is in revolt.
The blue-state paragon’s two-year budget of $40.3 billion includes a $1.5 billion net increase in taxes and fees. The top marginal individual tax rate rises to 6.99% from 6.7%. But the biggest blow is making permanent a 20% surtax on a company’s annual tax liability—a tax on a tax—and for the first time taxing Connecticut companies on their world-wide income, rather than what they earn in the state.
General Electric (http://quotes.wsj.com/GE), long a Connecticut fixture, protested that the state is “retroactively raising taxes again,” which “makes businesses, including our own, and citizens seriously consider whether it makes any sense to continue to be located in this state.” Aetna (http://quotes.wsj.com/AET), the giant health insurer and pillar of Hartford, said the bill would “undermine the competitiveness” of companies and “lead to an exodus of jobs and business from the state.’’
The biggest shock came Thursday when GE CEO Jeffrey Immelt (http://topics.wsj.com/person/I/Jeffrey-Immelt/282) told the company’s Connecticut employees that he has “assembled an exploratory team to look into the company’s options to relocate corporate HQ to another state with a more pro-business environment.”
Mr. Immelt, usually the consummate corporate diplomat, said Connecticut had raised taxes on GE five times since 2011. “I believe we should pay our fair share and that all of us should give back to our communities,” he wrote. But he added that “we can compare Connecticut with other states where small and large businesses have a better environment to thrive and compete.”
Democrat Dannel Malloy, the nation’s worst Governor since Pat Quinn lost in Illinois, quickly replied that he’s open to tweaking the latest tax punishment. And perhaps he is—for big companies like GE or Aetna. These are high-profile outfits that can do him a lot of political harm if they flee.
But what about the small and medium-sized companies that can’t get headlines from a press release? These unheralded employers are the lifeblood of any state’s economy, and they haven’t been investing or hiring as Connecticut’s economy has stagnated under the tax and regulatory assault from Mr. Malloy and his public-union allies.
Connecticut is now on the Illinois treadmill of higher taxes, which leads to slower growth and less revenue, which prompts another tax increase, and so on. Congratulations to Mr. Immelt and Aetna for speaking out. The best way they could help the people of Connecticut now would be to leave the state, which might finally shake the public enough to stop electing politicians who think they can fleece the private economy without consequence.
The last time we visited (http://www.wsj.com/articles/worse-than-illinois-1432939572) the formerly great state of Connecticut, Democrats were preparing to raise taxes again after promising not to when they ran for re-election in 2014. This week they did the deed, and the politicians seem shocked that the business community is in revolt.
The blue-state paragon’s two-year budget of $40.3 billion includes a $1.5 billion net increase in taxes and fees. The top marginal individual tax rate rises to 6.99% from 6.7%. But the biggest blow is making permanent a 20% surtax on a company’s annual tax liability—a tax on a tax—and for the first time taxing Connecticut companies on their world-wide income, rather than what they earn in the state.
General Electric (http://quotes.wsj.com/GE), long a Connecticut fixture, protested that the state is “retroactively raising taxes again,” which “makes businesses, including our own, and citizens seriously consider whether it makes any sense to continue to be located in this state.” Aetna (http://quotes.wsj.com/AET), the giant health insurer and pillar of Hartford, said the bill would “undermine the competitiveness” of companies and “lead to an exodus of jobs and business from the state.’’
The biggest shock came Thursday when GE CEO Jeffrey Immelt (http://topics.wsj.com/person/I/Jeffrey-Immelt/282) told the company’s Connecticut employees that he has “assembled an exploratory team to look into the company’s options to relocate corporate HQ to another state with a more pro-business environment.”
Mr. Immelt, usually the consummate corporate diplomat, said Connecticut had raised taxes on GE five times since 2011. “I believe we should pay our fair share and that all of us should give back to our communities,” he wrote. But he added that “we can compare Connecticut with other states where small and large businesses have a better environment to thrive and compete.”
Democrat Dannel Malloy, the nation’s worst Governor since Pat Quinn lost in Illinois, quickly replied that he’s open to tweaking the latest tax punishment. And perhaps he is—for big companies like GE or Aetna. These are high-profile outfits that can do him a lot of political harm if they flee.
But what about the small and medium-sized companies that can’t get headlines from a press release? These unheralded employers are the lifeblood of any state’s economy, and they haven’t been investing or hiring as Connecticut’s economy has stagnated under the tax and regulatory assault from Mr. Malloy and his public-union allies.
Connecticut is now on the Illinois treadmill of higher taxes, which leads to slower growth and less revenue, which prompts another tax increase, and so on. Congratulations to Mr. Immelt and Aetna for speaking out. The best way they could help the people of Connecticut now would be to leave the state, which might finally shake the public enough to stop electing politicians who think they can fleece the private economy without consequence.