Last week the legislature’s Finance, Revenue, and Bonding Committee passed a tax package that would raise taxes on capital gains by 2% in 2021, something Gov. Ned Lamont is dead set against. Democrats in the legislature want the wealthy to carry more of the load, while Lamont wants to give the rich “a reason to stay.”
The annoying thing is that they’re both right.
Widening inequality between the very rich and the rest of us is one of the defining features of America in the 21st century, and Connecticut is the poster child for just how bad it can get.
Connecticut has always been at or near the top of the list of richest states for my entire life, which always seemed kind of odd when looking at the poverty and economic stagnation in the regions where I’ve lived. That particular ranking is based on average household income, which for Connecticut is skewed by a relatively small number of wealthy people living mainly in Fairfield County.
The reason Connecticut is so “rich” is largely because of our proximity to New York City. We benefited from the closely linked evils of white flight and corporate flight from the cities during the latter half of the 20th century, which is how a titan like General Electric ended up moving its headquarters from midtown Manhattan to a drab suburban office park in Fairfield.
For a while, that worked out great for the state’s coffers and image, but the good times didn’t last. Now, as corporations and the wealthy move back into the big, booming cities, Connecticut Democrats want those millionaires and billionaires who remain to pay a bit more in tax on capital gains to the state that was their shelter and playground for so long.
Yeah, they’re not having it.
Steinbeck wrote that the rich are “different from you and me,” and man, was he ever right. One of the ways that they are different is that they can weasel out of paying their fair share in taxes better than anyone else.
They do this in a couple of ways. The first is through politics, which is an arena in which they’ve been depressingly successful. They’re responsible for angry-old-man ideas about how taxation is theft and lowering taxes on the rich will somehow benefit the poor (it won’t), and they also have bought enough politicians over the years to create a tax code with more holes than a cheese grater.
Example number one is the loophole allowing private jet owners to deduct the full cost of their plane during the first year of ownership, which was signed into law by yet another self-absorbed rich guy in 2017.
The other way the rich get around taxes is by moving their money and themselves out of harm’s way. Because we rely so heavily on them already, when the rich leave or move their assets somewhere friendlier to billionaires, our government loses tons of money.
Sadly, wealth doesn’t trickle down to the working class, but misery does. When the rich leave, their taxes go unpaid, and programs to benefit the poor, the sick, the disabled, and the unemployed vanish.
If every state in the country had the same tax regulations for the 1%, or if the federal government taxed at such a rate that they could afford to help prop up the states, they wouldn’t be able to screw us just by leaving. But they can. And they do.
Taxing the rich is morally right, and no one who drives a few miles down US-44 from Avon to Upper Albany and Clay-Arsenal in Hartford should be able to deny it. The differences between the richest and the poorest are so glaring and stark that we should all be crying out for the scales to be evened.
But if we dare touch the dragon’s horde, we’ll get burned.
So what do we do? Until such time as this entire nation can consistently tax the rich at higher rates and change the tax codes so they can’t weasel out of it, we need to find other solutions. That’s what tolls are, I’m afraid.
I wish it was different. I wish the world were more just. But we’re not there yet.
Still, when you pay a few bucks to travel down I-91 in a couple of years, think of the rich guys who deducted the entire cost of their private jets and moved their cash offshore, and vote accordingly.
Susan Bigelow is an award-winning columnist and the founder of CTLocalPolitics. She lives in Enfield with her wife and their cats.
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