Budgets, Taxation & Values

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While republicans cling to the dubious notion of protecting tax cuts for wealthy corporations, progressives fail to make a compelling argument on the benefits of fair taxation. Much of this incongruity arises from the fundamental lack of understanding between federal revenues, state budgets and local taxes. For example, Connecticut sends about 33% of every dollar to the treasury and in return receives 23.5% back in federal funding. Which means Connecticut is among 14 of the 18 states who contribute more to the feds than we receive. When reviewing state expenses, nearly 80% falls into four categories; personnel costs for state employees equaling 38% or $6.6 billion dollars. Municipal aid-which funds education and alleviates local property taxes is 17.5% or $3 billion dollars. Medicaid coverage at 13% or $2.3 billion and debt service at 10% or $1.8 billion dollars. The other 21.5% or $4.0 billion funds everything else. Therefore, as evidenced by the data, there simply aren’t enough spending cuts to resolve a projected 10% deficit. However, when evaluating state revenues, a glaring discrepancy in corporate contributions becomes apparent. In 1990 corporate contributions totaled 19% of general fund revenues. Today they provide less than 9%. This type of corporate tax evasion is part of a national scheme that blackmails states for hundreds-of-millions of dollars by threatening to cross the border to neighboring states. The consequence is a steady decline in municipal-aid, social-services, an over-reliance on gaming and volatility in the state budget. Which ultimately requires the middle-class to bear an ever-increasing burden to pick up the tab for healthcare, infrastructure, education, and social programs. The state budget is an expression of what we value. With a better understanding of the relationship between federal revenues, state budgets and local taxation we can allocate our resources to represent those values.

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