The Hartford Way: Keep Raising Taxes In Connecticut

State Finances: Anyone who still believes tax increases are the solution to chronic budget deficits should take a look at the fiscal train wreck in Connecticut. Even the state's biggest employers are alarmed.

The Nutmeg State just passed a $2.5 billion income-tax hike in 2011 - the biggest in the state's history - but the revenue got spent, taxpayers fled the state and the flimsy economy never really pulled out of the Great Recession.

Now Hartford wants more money.

Connecticut faces another $2 billion hole, and the Democrats who rule the legislature have passed a budget with another $1.2 billion tax on the rich and businesses.

So now several of the largest corporations in the state, including Yankee mainstays such as insurance giants Aetna and Travelers, as well as General Electric, are threatening to leave and get out of this abusive relationship.

GE's CEO Jeff Immelt told his thousands of Connecticut-based employees that he has put together a team to evaluate a move to another state with "a more pro-business environment."

He says the company's state taxes have increased five times since 2011 and the new hike would impose "significant and retroactive tax increases for businesses."

Aetna complained that it already pays $65 million a year in state and local taxes and under this budget its burden rises another 27%.

What has infuriated Connecticut taxpayers is that in a state that already has the third-highest state and local taxes in the nation, income taxes are headed up yet again. Doubly infuriating is that Dan Malloy, the liberal Democratic governor, pledged in his re-election campaign last year that "there will not be a tax increase."

Well, never mind.

The seeds of Connecticut's ongoing budget crisis date all the way back to 1991, when then-Gov. Lowell Weicker Jr. introduced the state's first-ever income tax. Liberals applauded this as a new revenue source that would solve Connecticut's budget woes for decades.

But just the opposite happened. Spending soared after the politicians had access to a new cash cow of income tax receipts.

The income tax has been raised five times since the early 1990s, and so a state that once had a zero income tax, and started with a low flat rate of 4.5%, now will have a highest rate of 6.99%.

It also has one of the highest estate taxes, so people with wealth scram to Florida and Texas.

That's not all. The Malloy tax hike also includes the extension of a 20% "temporary" surtax on corporate profits, which will give Connecticut the fifth-highest tax on business in the nation. And the clueless lawmakers in Hartford are scratching their heads asking why businesses are threatening to leave.

The record $40 billion budget cancels even the tiniest cuts in social programs recommended by Malloy, and increases spending for many of the left's favored programs. The only austerity in this budget is imposed on taxpayers.

In an Alice-in-Wonderland defense of this rancid budget, Democratic Sen. John Fonfara, chairman of the legislature's Finance Revenue and Bonding Committee, said:

"We believe the benefits of these changes will reward our economy for years to come."

That's what they've said for nearly 20 years now.

The Northeast state was once one of the richest places in America, and now it's losing out to the rest of America in nearly every category - jobs, population and income. A state that ranks in the bottom five in nearly every ranking of economic climate has just labored to make things even worse.

Don't be surprised if Malloy and his tax-hike cronies are knocking on taxpayers' doors in another year or two asking for more still. It's become the Hartford way. The mystery is why the voters of Connecticut keep tolerating such incompetent leadership.