Spending is tied inextricably to tax increases: As taxes increase, spending increases. And this is why tax increases are not an effective solution to debt, which is caused by spending and can be reduced in the long term only by spending cuts.
A tax increase – better still, borrowing, which shifts debt payments forward to children yet unborn -- may be an efficient means of meeting an immediate debt, but the unintended consequences of tax increases are, to put it mildly, destructive to the economy for a host of reasons.
“People in Connecticut are finished. They’re done.” Ms. Dean meant – it is no longer possible to raise taxes to meet a deficit. After boosting taxes to satisfy appropriations that had tripled within the space of four governors, the revenue well has now gone dry. There is no more juice in the lemon. If you raise taxes on people, their own budgets will be pushed into the red. If you raise taxes on companies, they will move to secure the profitability of their operations. It’s over – done – fini. You can’t make lemonade from a lemon peel.
Connecticut Commentary: Red Notes from a Blue State: Connecticut's Tax And Spend See-Saw