Well, the WTNH headline out of Connecticut is just about all you need to know: “Income tax revenue collapses; Malloy says taxing the rich doesn’t work,” but here’s a brief explanation:
Connecticut’s state budget woes are compounding with collections from the state income tax collapsing, despite two high-end tax hikes in the past six years. …
It’s happening because the state of Connecticut depends too much on its wealthy residents, and wealthy residents are leaving, and the ones that are staying are making less, or are not taking their profits from the stock market until they see what happens in Washington.
Rhode Islanders should consider that this goes in reverse, too. Lower, broader taxation will foster the import of wealth and productive activity within the state. For a quick lesson, see Thomas Sowell’s latest post-retirement essay.
For progressive governments in the Northeast, the whole purpose of a civic entity (like a state) is to construct the perfect society as they see it. This doesn’t work.
For classical liberals (now called “conservatives”), the purpose of a civic entity is to provide some structure and security for the society as a whole (as distinct from the security of an individual or particular organization). This does work, and should be the focus of our state.
Government should be small enough in scope that a broadly applied tax won’t hurt the less advantaged. In that way, we’ll have prosperity and greater economic mobility, or opportunity for people to climb the ladder.