Taxes should not be raised for those who create jobs and spend their money in Connecticut. Most working people in Connecticut spend their money in the Nutmeg State buying fishing rods, furniture, toilet paper, food, cars, fast food, diapers, bullets and what have you. When the average person has money he or she spends it, which creates demand and more jobs.
For 99 percent of people in Connecticut, tax rates are high enough. However, the approximately 10,900 people in Connecticut who make north of $1 million a year pay a 7 percent marginal rate in state taxes, while their counterparts in California pay a 12.5 percent marginal rate in state taxes. If the wealthiest in our state paid just 2 percent more in taxes (9 percent) for every dollar over one million a year, our budget problems could be greatly lessened.
There are a number of reasons why this is a good idea. First, the wealthiest in our state will not leave because of higher taxes – that is a myth. It is the middle- and lower-income people who will leave. Second, the wealthiest will still be really wealthy; giving another 2 percent to the state coffers off of any income over $1 million will not cause any hardship to these people.
Third, the money in the hands of the rich never “trickles down.” That is another myth. Money works better when it circulates, and average people do that when they spend it. Fourth, the real “takers” are not poor people, but the rich who are in a position to “take” more than others. “Taking” apparently is the American way. We are all fascinated and perhaps envious of those who can get away with it, but those who “take” way more need to give back more.
There is a solution to Connecticut’s budget deficit. California was in worse shape than Connecticut, but in 2012 raised its top marginal tax rate for the very rich and now California has a budget surplus, and the economy is booming.
We need to raise the top marginal state income tax rate by two percentage points. The rich can pay.
David Topitzer lives in Tolland. This op-ed previously appeared on CTViewpoints.org.