Additional Taxes Will Lead To Small Business Packing Up and Shipping Out Of Connecticut

Additional Taxes Will Lead To Small Business Packing Up and Shipping Out Of Connecticut

Additional Taxes Will Lead To Small Business Packing Up
and Shipping Out Of Connecticut

By Andrew Markowski, Esq.

 

As the deadlines for the state legislature’s Appropriations
and Finance Committees approach, those in the private sector, especially small
businesses, are wondering why our lawmakers are not held to the same fiscal
standard that they are. While small business must balance their books to ensure
they haven’t overspent and their revenue projections are accurate, lawmakers
seem to spend freely and without thought to the long term consequences. Even
with the existence of a constitutional cap on expenditures, it was recently
debated whether or not the authority existed to override the ceiling placed on
lawmakers spending. Small business was certainly relieved to hear that Governor
Malloy would not entertain the idea of providing the legislature with a blank
check but it begs the question, why aren’t our policy makers facing the same
pressure small business does, where spending more than they take in simply is
not an option.

 

According to the tax foundation, Connecticut’s combined
state and local tax burden is the third highest in the country. That alone
should make it unfathomable to anyone listening to the rhetoric coming out of
Hartford that there would be any new taxes this budget season. Furthermore, in
order to improve our economic climate, lawmakers must recognize that they have
a problem with spending, not a problem with revenue. Connecticut small business
cannot afford to pay more taxes, period. It is time for Hartford to make the
difficult decisions that the private sector has been making for years. Higher income
taxes or expanding the sales tax to services, among other revenue
raising measures, will be detrimental to the state’s economy and will
send the wrong message to prospective entrepreneurs.

 

This legislative session we have seen bill after bill sending
the wrong message to local employers looking to expand or those outside of
Connecticut considering a relocation. Instead of embracing small businesses,
lawmakers have made them targets by attempting to pass legislation that would
have allowed government interference in even the most basic of day to day
decisions that owners make. They are attempting to dramatically expand paid
leave laws, mandate scheduling 21 days in advance and are trying to force
certain private businesses, including franchised small businesses, to pay more
instead of addressing the self-inflicted spending problem politicians have
created. All of these bills tell those looking to grow or start a business that
they are facing an uphill battle and a hostile regulatory environment in Connecticut.
As if the ongoing “permanent fiscal crisis” in our state wasn’t
creating enough uncertainty, add tax increases to that mix of legislation and
you will see the small business community, and the jobs they create, looking
for the closest exit.

 

Connecticut perennially ranks among the bottom 10 states in
the business tax climate index and if lawmakers at all levels of government do
not change the course of the economy this session, next year’s business climate
ranking will simply be a matter of competing for last place. It is imperative
to create a healthy, vibrant economy in our state so that we can begin to
tackle some of our larger budget issues. By turning our economy around, we will
begin to attract new, innovative, businesses which will in turn create jobs for
the people of Connecticut.