by Sam Patterson

Created on: July 28, 2009   Last Updated: July 29, 2009

In April, Connecticut Democrats proposed a state budget which included a $3.3 billion dollar tax increase on couples making more than $500,000, in an attempt to close the state's budget deficit. In June, they lowered this to $2.8 billion, because of resistance from the Republican Governor. Despite making some concessions to the Governor, the Democrats have had no success in getting their tax increase passed.

One thing the Democrats appear to have not have seriously considered is cutting spending. Increasing taxes during a recession is always unwise, because it takes wealth from the private sector and gives it to government. The government does not produce wealth or add to the economy, it simply takes a portion of whatever is produced.

In a recession such as our current one, where there is a smaller pie because of high unemployment and reduced lending, the worst approach to economic success is increasing the government's slice. Instead, they should reduce taxes or cut spending, leaving more money in the private sector for job creation and capital investment.

Additionally, the wealthy should not be specifically targeted for tax increases. As much as many people dislike hearing it, the wealthy are already those contributing most to our economy. Many of the rich being targeted own small to medium size businesses, employing many other Connecticut citizens. They are rich because their businesses are successful, and with that success their employees benefit, as well as those consumers who use their products or services.

Yet the reward for providing employment and valued products or services is in fact a penalty. Being a successful business owner is penalized, and the more heavily penalized, the more likely that these rich leaders will leave the state for a more tax friendly environment, taking with them their business and increasing unemployment. This can be seen in much of the North-Eastern United States today, with many businesses leaving to go South or West, seeking a state which will not penalize success so heavily.

Finally, taxing a certain segment of the population significantly more than the rest is simply unfair. I commonly hear people say that taxing the rich is justified, 'because they can afford it'. I question who is able to make such a judgment. Perhaps the government should simply determine what everyone can comfortably live on (I propose $150,000 annually for a single individual), and then take any amount which they earn on top of that.

This would satisfy the 'they can afford it' argument easily. My argument against my own proposal is that the government has no right to do so, just as they have no right to disproportionately tax one segment of the population more than another. If the tables were turned, and we were arguing that the poor should be taxed more heavily for some reason (they often don't end up paying the government income tax anyways), who would agree with the proposal? I doubt any would.

Learn more about this author, Sam Patterson.
Click here to send this author comments or questions.