Tag Archives: Connecticut budget

The Executive/Financial Class, The Political/Union Class, Generation Greed and the Serfs: Wherever You Look It’s Getting Worse

I think people who read this blog would agree that I follow U.S. public finance issues pretty closely, including those related to taxation.  But I recently found out something I had never heard of before, that was never publicly debated in any news source I follow, that no “progressive” politician has objected to as far as I know, and frankly I’m shocked.

https://www.marketwatch.com/story/heres-the-formula-for-paying-no-federal-income-taxes-on-100000-a-year-2019-11-22

In a country with a median household income of less than $62,000, you can get more than $100,000 a year while not working and pay no federal tax at all, because $80,000 in investment income (dividends and capital gains) is tax exempt!  Even as work income for the less well off is taxed twice, by the payroll tax, and the income tax.   It turns out that for married couples, while other income might be taxable if it is higher, that $80,000 in investment income is fully exempt from taxes even if total income is as high as $184,250 — with other deals up to $200,000.

How could this possibly be thought of as fair?   After all, a working couple with half that income from work would pay $7,500 in payroll taxes (or $15,000 if they were “gig” workers) and federal income taxes – at a higher rate – on top of that.  Why hasn’t a single pundit or politician raised a loud objection?

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Will Connecticut’s Ned Lamont Be the First To Tell The Truth about Generation Greed?

Coming into office eight years ago, Connecticut Governor Dannel Malloy faced a fiscal disaster, following decades of shortsighted but popular policies that robbed the future.  He raised some taxes and cut some services, but mostly kicked the can with borrowing and deferred pension contributions shifted further into the future, and pursued an agenda based on traditional Democratic tribal issues such as guns, gays, immigration and marijuana.   (Republican Generation Greed politicians use the same misdirection).  Since the majority of Connecticut residents don’t follow state and local government closely, however, Malloy received all the blame for all that had gone before.  As a result he was barely re-elected to a second term, and is leaving office as one of the most despised politicians in the country.

Coming into office today, Connecticut Governor-elect Ned Lamont also faces a fiscal disaster, this time at the peak of an economic cycle rather than in a deep recession.  A fiscal disaster that is certain to get even worse when the next recession hits and the stock market corrects to something like fair value. At some point he will either have to raise taxes, cut services, and perhaps tell his public employee union supporters that they have to give up more to get back in solidarity with their fellow state residents.  And be blamed for all of the above.  Or hope that state residents have gotten used to how bad things are under Malloy, kick the can a little further, and try to sneak into a second term before the additional bills come due.  And then leave office as despised as Malloy and former New Jersey Governor Christie.

But there is a third option.  Interested Ned?

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