Saturday, June 6, 2015

Free Choice and Taxing Americans

Americans are free to choose where to live and work and spend our own money (the 'my own money' MOM way). That freedom to choose how to spend our own money doesn't extend to taxation and K-12 education, of course, but that's another story for another day.

Politicians are 'in business' to spend the people's money by taxing as few as possible as much as possible and then borrowing the rest, thereby postponing tax increases for after they have left office.

But it's all getting out of hand and coming to a head as politicians have overspent and overpromised excessively through the years. They are trying to levy taxes on anyone who has money but not many votes. And that brings us to corporations.

Of course, corporations don't really pay taxes --- people do. In some cases, it's the shareholder and in others, it's the consumer in the form of higher prices. But make no mistake. People pay taxes and not inanimate entities such as business enterprises.

Connecticut Tax Boomerang relates the developing story of taxation in 'revenue challenged' states these days. Politicians and residents of Illinois, New York, Massachusetts, California and lots of other states should take notice:

"The last time we visited the formerly great state of Connecticut, Democrats were preparing to raise taxes again after promising not to when they ran for re-election in 2014. This week they did the deed, and the politicians seem shocked that the business community is in revolt.

The blue-state paragon’s two-year budget of $40.3 billion includes a $1.5 billion net increase in taxes and fees. The top marginal individual tax rate rises to 6.99% from 6.7%. But the biggest blow is making permanent a 20% surtax on a company’s annual tax liability—a tax on a tax—and for the first time taxing Connecticut companies on their world-wide income, rather than what they earn in the state.

General Electric, long a Connecticut fixture, protested that the state is “retroactively raising taxes again,” which “makes businesses, including our own, and citizens seriously consider whether it makes any sense to continue to be located in this state.” Aetna, the giant health insurer and pillar of Hartford, said the bill would “undermine the competitiveness” of companies and “lead to an exodus of jobs and business from the state.’’

The biggest shock came Thursday when GE CEO Jeffrey Immelt told the company’s Connecticut employees that he has “assembled an exploratory team to look into the company’s options to relocate corporate HQ to another state with a more pro-business environment.”

Mr. Immelt . . . said Connecticut had raised taxes on GE five times since 2011. “I believe we should pay our fair share and that all of us should give back to our communities,” he wrote. But he added that “we can compare Connecticut with other states where small and large businesses have a better environment to thrive and compete.”

Democrat Dannel Malloy, the nation’s worst Governor since Pat Quinn lost in Illinois, quickly replied that he’s open to tweaking the latest tax punishment. And perhaps he is—for big companies like GE or Aetna. These are high-profile outfits that can do him a lot of political harm if they flee.

But what about the small and medium-sized companies that can’t get headlines from a press release? These unheralded employers are the lifeblood of any state’s economy, and they haven’t been investing or hiring as Connecticut’s economy has stagnated under the tax and regulatory assault from Mr. Malloy and his public-union allies.

Connecticut is now on the Illinois treadmill of higher taxes, which leads to slower growth and less revenue, which prompts another tax increase, and so on. Congratulations to Mr. Immelt and Aetna for speaking out. The best way they could help the people of Connecticut now would be to leave the state, which might finally shake the public enough to stop electing politicians who think they can fleece the private economy without consequence."

Summing Up

Freedom is a terrible thing to waste. And as American citizens we are free to choose the cities and states where we live, work and pay taxes --- even the politicians we elect to 'represent' us.

Nevertheless, our elected politicians of all stripes have been playing silly and expensive games and 'taxing' the goodwill of the American people for far too long now. Their actions and inactions have made the American economy weaker as well.

We the People, wherever we live and work, need to speak up and act like it's our country --- because it is.

And living within our means and taxing 'ourselves' as little as possible are both necessary and worthy objectives for all Americans, including our elected 'representatives.'

That's my take.

Thanks. Bob.

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