How to destroy an economy – tax edition.
Case study: Connecticut. The Democrats have a veto-proof majority in both houses of the legislature. We have a Republican governor however. And there are defections among the Democratic ranks because of her threatened veto.
Democrats in the State Senate have approved a budget that will increase taxes in Connecticut by 2.5 billion dollars. That’s a little over $700 for every man, woman and child in the state. Of course, it’s only targeting the “rich”, so why should anyone care?
Simple. When the taxes get too high on producers and employers, they vote with their feet. Connecticut can ill afford further job losses in the private sector. Why do I say private sector? Because public sector jobs are parasitic by nature. Public sector jobs are paid for exclusively through taxation, and therefore require a robust private sector for their funding.
And one of Connecticut’s problems is this – we have too many government employees. State and local governments alone — not including people who live and work in Connecticut for the federal government — employ nearly a quarter of a million people. That works out to about 6,450 government employees for every 100,000 residents of the state! Compare with Massachusetts, which has about 50% more government employees, but nearly double the population — it works out to about 4,950/100,000.
Of course, the Democrats answer is always the same: government must not do with less.
So they will raise taxes, businesses and capital will flee, and the middle class will be left holding the bag.