Two new reports — one federal, one state — offer a glimpse at the governmental application of Newton’s First Law of Motion. That’s the one that says, in essence, objects at rest tend to stay at rest unless given an external jolt.
On one hand we have Congress, a group stuck in neutral for years as we all race toward the so-called ‘fiscal cliff.’ That’s the magic moment in January when massive budgets cuts kick in. These are the doomsday cuts Congress agreed to when the partisan bickering got too nasty to really have a budget conversation.
The external jolt was supplied by the nonpartisan Congressional Budget Office, which released its updated budget and economic projections for 2012 through 2022.
Yes, CBO says, the meat-cleaver approach will improve the deficit picture, but the toxic mix of tax increases and spending cuts would push the unemployment rate back above 9 percent and send the country spinning into another recession.
The none-too-subtle message from CBO: Do something to avoid the fiscal cliff.
And this is from the nonpartisan folks. Wait until we’re treated to the howls from both left and right if the nation goes into a self-inflicted cliff dive.
To be fair, Congress swears it’ll get right on the issue when it reconvenes after Election Day. That’s not ideal but it could work… unless the impasse remains.
It’s unlikely CBO’s report is enough of a jolt to move Congress to action, but we salute CBO for giving it a try.
Closer to home, folks at the State Capitol are busy studying the tax policy. But, unlike Congress, they have no apparent plans to do anything soon to deal with a set of problems that most agree are serious.
The Business Tax Task Force has been meeting for months and so far has produced a series of questions, which it rolled out last week. While it’s good to agree on the questions, the payoff comes in finding answers.
The task force is moving toward crafting a blueprint for building recommendations that later will lead to answers. But implementing the actual answers — in the form of policy and law changes — may take up to six years, just in time for the end of Malloy’s second term, presuming he wins re-election. How convenient.
Among the issues on the table are the state’s gift-and-estate-tax policy, which co-chair Kevin Sullivan calls a “stick in the eye” of the well-to-do and places the state at a competitive disadvantage. And he should know; he’s the commissioner of the state Department of Revenue Services. That seems a serious policy issue.
So does the question of leveling the playing field for Connecticut companies that seem to be at a tax disadvantage in competing with out-of-state companies that do business here.
State Comptroller Kevin Lembo, who is also a task force member, sees some other serious issues and seemed to jump the gun last week when he put out his own recommendations, as Greg Bordonaro details in this edition. Lembo has the good but apparently none-too-welcome suggestion that the state should be transparent in its handling of tax credits and other business incentives.
He suggests drastic actions like annual reports and a searchable online database. He even wants municipalities to reveal the tax breaks they grant. “Knowing who pays which taxes and how much they pay,’’ he said, “is essential to making informed business tax policy decisions.’’
The man has a great point but the sound of task force members backing him was underwhelming. The current system is working just fine for some and they want it to continue.
The result, of course, is that this task force’s eventual report will join so many others on a dusty shelf in the state archives.
Newton would be so proud. And no apples were injured in this demonstration.