GOP Viewpoint: Fueling the exodus
Study after study confirms what I have been warning for some time. Connecticut is losing its highest earning taxpayers. It is losing jobs by the thousands and now has a negative (-0.6) gross domestic product.
This administration’s and its leadership’s solution of continued tax increases won’t fix Connecticut’s budget problems. Instead, they have deepened our deficits as the state loses population, especially among higher earning residents who can afford to move and may have jobs that enable them to work remotely.
Progressives who continue calling for more taxes on higher income individuals reject this warning. They believe the quality of life Connecticut offers will keep residents and businesses here, no matter the cost.
Recent data on tax migration from the IRS exposes the flaws of their tax agenda. It shows that where there are high taxes and higher tax talk, money doesn’t just walk, it runs. Connecticut lost $6.2 billion in adjusted gross income between 2012 and 2015. That is 4% of the state’s total income. In 2015 alone, residents took incomes totaling $60 million to Massachusetts.
We know that residents who are more affluent make up the majority of those moving. Again, in 2015, individuals making more than $200,000 a year accounted for 57% of the income leaving Connecticut. This follows raising the upper income tax bracket to 6.7% in 2011 and to 6.99% in 2013.
At the same time, Connecticut has seen year after year of income tax collections not meeting projections. In fact, the fiscal year ending June 30, 2013, is the last time income tax collections met or exceeded projections. Between 2014 and the fiscal year ending June 30, 2017, income tax collections fell short of projections by nearly $1.4 billion. The trend is set to continue. Already this year, eroding tax collections have created a projected $175-million deficit in the recently passed state budget.
Once again, there are calls to tax the wealthy more as if they are a bottomless well that will never run dry.
The evidence is clear. Attempting to close deficits with continued tax increases digs the hole deeper and drives this income group out of state. Legislators cannot continue on this path, as so many of these same taxpayers are also business owners who take Connecticut jobs with them. With each job loss comes tax loss.
The administration and leadership’s “wait and see” response is why Connecticut cannot get out of its near recession mode. This is what keeps me up at night. With estimates that more than 500 residents leave the state each week, raising taxes on a shrinking population will only fuel the exodus from Connecticut.
At some point, there will be no one left to tax.