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Message
Connecticut joins kansas, louisiana, and illinois in the fiscal dumpster fire club
Posted on 5/10/17 at 11:58 pm
Posted on 5/10/17 at 11:58 pm
quote:
The state of Connecticut has been hit hard by the double whammy of a deteriorating local economy, coupled with a plunge in hedge fund profits - as well as hedge fund managers permanently relocating to Florida - leading to a collapse in tax revenues. According to the the latest Connecticut budget released last week, the state is reeling from the consequences of sliding tax revenue from the super-rich, i.e. the state's hedge fund managers. The latest figures showed that tax revenue from the state’s top 100 highest-paying taxpayers declined 45% from 2015 to 2016. The drop adds up to a $200 million revenue loss for Connecticut.
In a dramatic, if of questionable credibility, soundbite Department of Revenue Services Commissioner Kevin Sullivan says these wealthy people are “dramatically less wealthy than they were before.” He was referring to annual income, not actual asset holdings, because judging by the all time high in the S&P, the local financial elite have never had a higher net worth.
Just don't expect tears from the general public. Sullivan also noted how several international hedge funds have recently failed, resulting in “significant retrenchment” from investors. That drop in tolerance for risk brings smaller margins and ultimately less personal income for the state to tax, he added. It's fascinating how the Fed's central planning, superficially meant to restore "confidence" in a rigged, manipulated market is having such proound and adverse 2nd and 3rd order effects on state budgets.
Sullivan also acknowledged part of revenue decline can also be attributed to “a handful” of wealthy individuals who moved to more tax-friendly states — an issue frequently raised by legislative Republicans, who argue Connecticut’s tax policies encourage the state’s super-rich to move out.
Of course, for tax purposes it's the actual income that matters, and as a result the steep decline has exacerbated Connecticut’s budget woes. The projected deficit for the new fiscal year beginning July 1 has now jumped from about $1.7 billion to $2.3 billion, while the deficit predicted for the second year of the state’s two-year budget is now about $2.7 billion.
quote:
Meanwhile, in a stark confirmation just how dire the state's economic and fiscal situation has rapidly become, the Hartford Courant reports that city leaders in the state's capital have taken a step toward bankruptcy, soliciting proposals from law firms that specialize in Chapter 9. It adds that the city is reviewing several firms and could hire an attorney as early as this week, sources with knowledge of the plans said.
LINK
Yikes.
CT is essentially a liberal version of kansas. Governor malloy came into office and got through hefty income tax increases, and it has been a terrible adventure over the last few years there. He now sports a similar sub 30% approval rating to sam brownback.
This post was edited on 5/10/17 at 11:59 pm
Posted on 5/11/17 at 12:34 am to HailHailtoMichigan!
quote:
Governor malloy came into office and got through hefty income tax increases, and it has been a terrible adventure over the last few years there. He now sports a similar sub 30% approval rating to sam brownback.
Bump just for that
Posted on 5/11/17 at 3:33 am to HailHailtoMichigan!
Where are the lib's in this thread to tell us how great Ct is working? It is their own little Venezuelan utopia right here in the Usa?
Posted on 5/11/17 at 5:54 am to HailHailtoMichigan!
damn those are big deficits. i don't expect their entire budget is very big overall either
Posted on 5/11/17 at 6:09 am to HailHailtoMichigan!
This is what happens when you build a government around the idea you'll just fleece rich people out of their money to pay for everything.
They either just pack up and leave or they eventually stop being rich.
Eventually you'll run out of other people's money, when your tax system is punative and designed around punishment.
They either just pack up and leave or they eventually stop being rich.
Eventually you'll run out of other people's money, when your tax system is punative and designed around punishment.
Posted on 5/11/17 at 6:56 am to HailHailtoMichigan!
There are liberals posting this AM. They must not have noticed this thread, explaining why none are in here white knighting for the utopia they have created in CT.
Posted on 5/11/17 at 7:03 am to HailHailtoMichigan!
Zero hedge is a fake news site.
Posted on 5/11/17 at 7:22 am to IAmReality
quote:
This is what happens when you build a government around the idea you'll just fleece rich people out of their money to pay for everything. They either just pack up and leave or they eventually stop being rich. Eventually you'll run out of other people's money, when your tax system is punative and designed around punishment.
All of this.....
Posted on 5/11/17 at 7:54 am to crewdepoo
quote:
Zero hedge is a fake news site.
it does typically suck arse
i did notice in this instance for all its hysterical claims about how CT is chasing out high-income folks, they didn't actually mention their tax rates (any of them at all) either before or after this apparently-disastrous policy change. that would have been helpful, because i'm sure residents of other states would like to have some idea of what kind of rates it takes to chase out high earners
but i knew as soon as i saw that it was a ZH article that this would be expecting too much
Posted on 5/11/17 at 7:57 am to HailHailtoMichigan!
This isn't Kansas
Yet for all the vitriol you have for CT, you want to take the failed Kansas policies and enact them nationwide.
Sad!
Yet for all the vitriol you have for CT, you want to take the failed Kansas policies and enact them nationwide.
Sad!
Posted on 5/11/17 at 7:59 am to HailHailtoMichigan!
Louisiana is a plank owner in the Fiscal Dumpster Fire Club.
Posted on 5/11/17 at 8:05 am to HailHailtoMichigan!
quote:
Connecticut joins kansas, louisiana, and illinois in the fiscal dumpster fire club
So, basically what you're saying is that Red states and Blue states have no idea how to manage their money?
Seems pretty bi-partisan if you ask me.
Posted on 5/11/17 at 8:10 am to skrayper
Also almost all state governments are out of control on spending. And their retirement packages for state employees are ridiculous. Being able to retire after 20-30 years regardless of age is crazy.
Posted on 5/11/17 at 8:21 am to BamaAtl
They don't have to use Kansas policies. They could just go with Texas, Florida, Georgia, Arizona and other states that have done very well under Republican governance.
Posted on 5/11/17 at 8:23 am to skrayper
quote:
Seems pretty bi-partisan if you ask me.
Every party has incompetents and ideological extremes. You just hear about the Republicans more because the media hates Republicans.
Posted on 5/11/17 at 8:25 am to HailHailtoMichigan!
Hedge funds really have been hammered, though. I know no one is crying for them, but the 2/20 model has basically disintegrated overnight, and it has killed Connecticut's tax base. Connecticut obviously did themselves no favors with their tax policies, but this would have happened even if they hadn't touched taxes.
This is similar to how Kansas was hammered by something more or less outside of their control (collapsing wheat prices), not their budgetary decisions (which, while not helping, weren't the ultimate cause).
This is similar to how Kansas was hammered by something more or less outside of their control (collapsing wheat prices), not their budgetary decisions (which, while not helping, weren't the ultimate cause).
This post was edited on 5/11/17 at 8:29 am
Posted on 5/11/17 at 8:28 am to HailHailtoMichigan!
Connecticut has some of the highest property taxes in the country as well. Glad to see the residents are getting their money's worth. They could always tax the donations that Yale gets. The governor was pitching that idea awhile back.
Posted on 5/11/17 at 8:28 am to ndtiger
quote:
Also almost all state governments are out of control on spending. And their retirement packages for state employees are ridiculous. Being able to retire after 20-30 years regardless of age is crazy.
Listened to S. Varney on Fox reporting on the "sick days" payouts to Government employees when they retire. 6 figures in a lot of instances.
Makes you wonder just how long they can keep the music playing.
Posted on 5/11/17 at 8:31 am to BamaAtl
I bet the size of Connecticut's Medicaid budget would make Warren Buffett blush.
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