The Dismal Science

I have long maintained that one way to promote long term health for our national economy is to mandate the teaching of economics in school to kids as young as 12. If Americans learned from an early age that wages, jobs, taxes and the value of a dollar are all interrelated they'd be less inclined to support politicians and parties that take the easy way out of raising your  taxes without doing the hard work of cutting spending. Case in point: the formerly wealthy state of Connecticut.

The ruling class in Connecticut is trying to confiscate a whopping $1 billion plus from its citizens through yet another hike in the the state's income tax. Better yet, this one would be retroactive to January 1. If you live in Connecticut your rulers want to go back and re-tax your earnings on which you've already paid taxes.

What is even more breathtaking to realize is that until 1992, the year the state income tax went into effect, Connecticut was one of the wealthiest states in the country. Here's what happened when they started wringing the neck of the golden goose:

• Since the income tax went into effect, Connecticut has created zero new jobs. Zero. In 17 years. This according to this morning's Wall Street Journal
• As the tax rate has continued to climb, Connecticut, once a magnet for the rich, the powerful and those who wanted to be both, has had a net outflow of people to other states. If you live in Connecticut, the only thing that could be worse would be living in New York or New Jersey--the two states with the highest per capita tax burdens. 
• Since the income tax was created, government spending has exploded. Pre-tax the state was middle-of-the-road in per capita spending. Now it's in the top (or bottom?) ten.

The reason people keep electing politicians like Connecticut's governor Jody Rell or New Jersey's Jon Corzine is that they fail to see the connection between high taxes, low growth, and diminished personal opportunity. Taxes and growth are proportionately inverse. As taxes go up, economic opportunity goes down. And those on the lowest rung of the ladder hit bottom first.

On the other hand, as tax burden goes down, opportunity for all citizens rises as everyone has more money to spend, creating jobs for others so that they too can prosper. The states where voters fail to learn this lesson are places like New York, New Jersey, California, and Connecticut. On the other hand, states like Texas, which has no income tax, have weathered the recession better, putting them in a position to grow and attract new business and create new jobs as profligate states like Connecticut lose theirs.

If kids were taught this from an early age, spendthrift politicians would be a lot less likely to get their hands on your wallet. But unfortunately the schools are controlled by the teachers unions, whose members are among the biggest beneficiaries of this unrestrained spending. 

Economics may be the dismal science, but nothing's more dismal than being chased out of your home because you can no longer afford to live there. 

Just thought you might like to know.