The Connecticut Quandry

closed-out-of-business

The Constitution State has turned into another over-regulated liberal disaster. What once was fertile ground for the free market to prosper has turned into an example of government gone wild with less than impressive economic growth numbers.

What exactly happened? Lets examine the history.

Connecticut is located in a great area, tucked between New York and Massachusetts. It boasts 5 of the nations highest ranking towns in terms of median family income according to CNN: New Canaan (#1), Darien (#2), Westport (#5) and Greenwich (#14)

Even with those obvious advantages 300,000 more residents have moved out than moved into the state over the past 2 decades.

They have been beaten to the punch by states like Florida and Texas who boast a less regulated business climate along with offering potential employees a paycheck free of state income taxes. The departure of General Electric, who is set to move to Boston in 2018 should have been a wake up call but Connecticut still has one of the worst business climates in the country.  The reasons for this reputation that has earned are it’s individual income tax, corporate income tax, sales tax, property tax, unemployment insurance tax and security of private property.  As the Tax Foundation reported, “Connecticut imposed a temporary 20 percent surtax on top of its flat 7.5 percent corporate income tax, in effect raising its rate to 9 percent. This 20 percent surcharge is an increase on a supposedly temporary 10 percent surcharge that has been in place since 2009.”

Taxes are like Cyptonite to economic growth. Millionaires looking for a new destination are not going to a state that ranks 50th, dead last in the country in annual economic growth.  According to the Department of Commerce’s Bureau of Economic Analysis, Connecticut’s economy contracted for the second year in a row.  “Connecticut is the laggard,” reported Connecticut Department of Labor economist Daniel Kennedy.

The State was one of the more recent to institute the previously mentioned state income tax which was signed into law by Gov. Lowell Weicker in 1991.From 1991 to 2013 the size of government grew by more than a third. Making matters worse the tax rate when instituted was 4.5% and it now sits in the 7% range. The effects on businesses have been obvious.

According to a CNBC report in 2014 :

Last year, United Van Lines and Atlas Van Lines, the two largest movers in the U.S., moved 3,212 households out of state and 2,368 moves inbound. That means 55 percent of all moves left the state, for a net outbound flow of 58 percent. Over the last decade, the two companies reported 36,837 moves outbound to 30,426 inbound, for a net outbound flow of 55 percent.

The time has come for the voters in Connecticut to vote out the failed Democratic Governor and State Legislature that has continued this tradition of futility for far too long. The citizens of the Constitution state should rise up and reject big government in a way that sets an example for the rest of the overtaxed and over-regulated states in the union.

Information from Forbes.com, Americans for Tax Reform and The Hartford Courant was used in this story.

What would you suggest as a remedy to Connecticut’s ill’s? Give us your opinion in the comments section below.

 

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