Instituting a 30-percent surcharge on the state corporate profits tax — as proposed by state Democrats — will harm Connecticut’s ability to attract and keep businesses in the state.
The three-year surcharge would be levied on any company that is not losing money. Taxes for the state’s wealthiest residents would also rise retroactively under the plan unveiled Thursday by Democratic legislators.
Now more than ever, state lawmakers should be strengthening tax policies that help the business community provide stable and well-paying jobs. It is too short-sighted to target the state’s job suppliers when closing budget gaps, especially in a recession.
The evidence suggests that when the state adopts tax policies that encourage job growth and business expansion, the results are beneficial.
A University of Connecticut study from four years ago found that a combination of tax credits, exemptions and rate cuts created 10,440 new private, nonfarm jobs in 2002. The report noted that because state government spending was lower due to reduced revenue, public-sector employment declined by 5,965 jobs. The result was a net gain of 4,475 jobs.
The legislature should adopt tax policies that give the state a competitive edge in job retention and creation — not policies that make it harder for businesses to stay here.
