What happened in Kansas is a cautionary tale for Connecticut

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Imagine, if you will, a state that was unable to draw itself out of the deep recession of 2008. Neighboring states fared better and were chugging along at a nice clip. Talking about Connecticut? Well, it could be, but, actually the state I was referring to is Kansas. There is a reason why some candidates for governor here talk about Kansas.

The same fiscal genius who took a struggling state and made it into a cautionary tale, Arthur Laffer, was paid $75,000 by the Kansas government to stimulate growth by drastically cutting taxes. He is now a gubernatorial economic advisor here.

So what happened in Kansas? In May 2012, Gov. Sam Brownback signed one of the largest tax cuts, in percentage terms, ever enacted by a state in a single year. It included dropping the top income tax rate by about one-fourth and eliminating income taxes entirely on business profits that are “passed through” from businesses to their owners.

All this, in the mistaken idea that the “economic growth fairy” would wave her magic wand. It didn’t. Job growth actually decreased.

A year later, the economic hole the state was in was dug deeper with another round of tax cuts. These tax cuts were part of the plan to bring the “personal tax to zero” due to the flawed reasoning that tax cuts would pay for themselves.

Never have, never will.

To try and stop the hemorrhaging of revenues, taxes were raised elsewhere, all on the backs of lower wage earners. Education was devastated, tanking to the point that a court ordered the state to pay more. The debt became astronomical and the credit rating of the state dropped. The public also realized that 70 percent of the legislature and their governor reaped the savings since they were “pass-through” business owners.

In June 2017, the “Kansas experiment” was ended when much of the tax plan was eliminated over Gov. Brownback’s veto.

So let’s look at Connecticut’s taxes and correct one fallacy. GE did not leave Connecticut for Boston due to high corporate taxes. The Tax Foundation’s state rankings for 2019, which have recently been released, have Connecticut’s corporate tax ranking as 29th in the country.  Massachusetts is 37th. As a matter of fact, Connecticut has the lowest corporate tax rate in New England and, with the exception of New York, in the Northeast.

Of all Connecticut’s taxes which should we be looking to ameliorate with the least damage to the budget? The property tax. Our property tax rates are the highest in the nation. Tweaking it over the next few years will help people stay in Connecticut, whereas eliminating the personal income tax will not allow the state to support education, infrastructure, etc. The already onerous property tax would have to rise to new heights.

Think of that when you vote this November.

Virginia Shultz-Charette lives in Winsted.


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