Malloy's Budget. Soak the Poor

We are constantly surprised Democrats are perceived as the party of the working class (whatever that means) and sympathetic to the poor, when their policies work against those groups. For instance, minimum wage laws hurt the less educated, less experienced, mostly black underclass. Yet the Democrats continue to point to this program as a success. Ask yourself, Who is supposed to be helped by minimum wage laws? Answer: Those at the low end of the skills and experience spectrum. And ask yourself: since the minimum wage law has been enacted, has unemployment gone up or down for the low end of the skills and experience spectrum. Answer: Up, Way Up. The reason is obvious. If you raise the price of something, demand falls. The unanswered question is, Since minimum wage laws hurts those it purportedly helps, why do we keep these laws on the books? But we digress.

Governor Malloy's budget is a study in hurting the less well-off. Let's start with the hidden taxes. Increased sales tax, higher taxes on beer, wine, liquor, cigarettes and our favorites, electricity, gasoline and heating oil. Since all of these items are a greater percentage of the disposable income of the poor and middle class, it takes a bigger bite of their resources. But the budget also calls for more taxes on luxury goods like yachts, clothing and jewelry. The latter two are easy to avoid, and in our opinion, will be avoided aggressively. The yacht tax will merely result in Senator Kerry behavior, buying and berthing a yacht elsewhere, like, Rhode Island. This will hurt the workers in the boating and yachting industries. For a good example of the impact a luxury tax has, look at the Clinton era taxes and the job destruction that ensued. The rich will still buy and berth a yacht; just not in Connecticut.

Income taxes go up as well. Go find the Connecticut FY 2012 – FY 2012 Biennium Governor’s Budget Summary. On page 32 of the Introduction there is a table showing, the impact of the "income tax changes on selected levels of adjusted gross income for single and joint filers." We've reproduced the first three columns, and added a percent increase in the tax bite. We've started at an AGI of $50,000. Below that level the 2010 income tax was zero and in the proposed 2011 budget, income earned below $50,000 "may" be eligible for the earned income tax credit.

For Joint Filers			Proposed
		2010	2011	Percent
	CT AGI	Income Tax	Income Tax	Increase
	$           50,000	$             350	$             850	143%
	$           60,000	$          1,300	$          1,800	38%
	$           70,000	$          2,200	$          2,700	23%
	$           80,000	$          2,740	$          3,240	18%
	$           90,000	$          3,190	$          3,690	16%
	$         100,000	$          4,008	$          4,508	12%
	$         125,000	$          5,500	$          6,095	11%
	$         150,000	$          6,850	$          7,550	10%
	$         200,000	$          9,600	$        10,500	9%
	$         250,000	$        12,100	$        13,375	11%
	$         500,000	$        24,600	$        28,000	14%
	$      1,000,000	$        49,600	$        59,500	20%
	$      2,000,000	$      114,600	$      126,500	10%

Remember, these aren't our numbers, they are straight from the Governor's proposal. Taxes are set to go up about 10% for those with income over $125,000. For the less well off taxes are set to increase much more.

So the next time you think the Democrats are the friends of the middle class, ask yourself why their polices are so regressive.