A Very Simple Reality
As the state legislature grapples with crafting a state budget in the face of yet more large deficits, it’s clear to me that we need to think of budgeting in a different way in Connecticut.
Anyone who follows the ups and downs of Connecticut’s economy knows that we tend to have budget surpluses when our economy is growing, and we tend to have deficits when it’s not. It’s a very simple reality.
Consequently, tax increases won’t solve our fiscal problems, because as studies and decades of experience have shown, tax increases are a drag on economic output.
What we need, then, are state budgets based on fiscal policy that encourages entrepreneurs and companies with capital to invest in Connecticut and succeed here—in other words, make a profit.
In some circles, profit gets a bad rap, but that’s wrongheaded. Profits breed business investment and jobs, both of which lead to more economic activity and more tax revenue to support state government.
A healthy revenue stream gives the state the resources to take care of people with needs and fund education, hospitals, transportation infrastructure improvements, public safety, and other initiatives to further the greater good.
So we need to make Connecticut a more attractive place—a destination state—for companies and people with capital, and also for people with talent.
We can’t attract capital without a talented workforce, but we also can’t attract the talent without jobs.
We need both, but the environment in Connecticut has not been conducive enough to business investment. And the tax increases in the latest budget proposal would only make matters worse by limiting investment incentives.
When you see polls taken around elections, what are consistently the top issues for voters? The economy and jobs. That’s what people care about most.
We all want security in our own jobs, the opportunity to be able to move into and up through the middle class, and good job opportunities for our children.
The way to get there is by fostering economic growth, because not only does a growing economy produce the tax revenue to solve the state’s budget problems, it provides the opportunity for people to lead rewarding, successful lives.
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