South Dakota ahead of curve
Published: Thursday, March 7th, 2013
Just when you thought you had heard it all, something really looney comes along to spark your interest. Such was the case last week when we picked up on a news article in the daily Connecticut Mirror newspaper published in Hartford. Democratic Gov. Dannel P. Malloy has proposed a “no tax increase” budget which has led to his fellow party members proposing their own tax increases.
Reporters Keith M. Phaneuf and Michael Gambina tell us “Democratic lawmakers are proposing increases in income, estate, corporation, sales and cigarette taxes.” Somehow they left out an increase in the state gasoline tax or a tax on the air that their constituents breathe.
Senate Majority Leader Martin M. Looney, D-New Haven, proposes raising the state’s income tax top marginal rate from 6.7 to 6.9 percent. These top rates would be levied on individuals earning more than $250,000 and couples earning more than $500,000.
But Gov. Malloy is adamant that Connecticut’s top income tax rate stay below that of New York which is 8.8 percent and New Jersey which is 9.0 percent. He argues that “Connecticut must not punish success if it’s to keep high income households in the Nutmeg State.” He is avoiding tax increases by “extending existing rates or credit limits otherwise set to expire--and therefore doesn’t count as a tax hike.”
However, one of his party’s own, Rep. Betsy Ritter, Waterford, has proposed a “hoarder’s tax” which would put a levy on liquid assets from companies with “a lot of money in the bank” and dedicate the proceeds to job creation programs. In other words, Ritter is seeking to punish fiscally responsible companies that have cash in the bank by levying a tax on that cash. Is there no end to the taxing schemes of these elected officials who would tax funds that have already been taxed?
Rep. Sean Williams of Watertown, ranking Republican representative on the finance committee, said he didn’t think Democrats would find the spending cuts needed to support tax hikes and says he is afraid it will be hard enough to eliminate the other revenue gimmicks in the budget. “There never is enough money for these folks to spend,” Williams said. Sounds like Connecticut is a microcosm of Washington, D.C., doesn’t it?
Can you imagine a state senator or representative from South Dakota proposing to tax corporate funds held in a banking institution for safe keeping? They would be run out of town. And, how would you like to pay a 6.9 or 8.8 or 9.0 percent state income tax on top of your federal income tax? No sane elected state official is crazy enough to even propose a state income tax in South Dakota.
Sometimes we lose track of the obvious fiscal issues that we don’t have to deal with in the Sunshine State. States like Nebraska and Louisiana have governors who are now proposing to do away with their state income taxes in an attempt to promote a more business-friendly environment and give their citizens a tax break.
This is one case where states like Wyoming, Florida and South Dakota are ahead of the curve by having no corporate or individual state income taxes. For that, we should all be truly grateful.
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