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Don Pesci: In Conn., hospitals are big new stationary tax targets

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The State is the great fiction through which everyone endeavors to live at the expense of everyone else

— Frederic Bastiat

Procrustes – literally, “the stretcher who hammers metal” — was in Greek mythology a rogue smithy and bandit from Attica who cut off the legs of people to fit them to his iron bed. Political narratives as they relate to facts can be procrustean beds. If the facts don’t fit the narrative, you simply cut off their limbs to make them fit. Facts may be stubborn things, but politicians sometimes are more stubborn.

A few months ago, Connecticut Gov. Dannel Malloy’s budget guru, Ben Barnes, was asked by a reporter why the Malloy administration was so keen to slap a tax on hospitals. Barnes should have replied, “because the hegemonic Democratic Party in Connecticut finds it politically inconvenient to make permanent cuts in spending. Instead, he replied in the accent of infamous bank robber Willie Sutton, “Because that’s where the money is.” Asked why he robbed banks, Sutton’s reply was shockingly apposite, according to a reporter who may have foisted the quote on Sutton – “because that’s where the money is.”

For the Malloy administration – and, indeed, for most progressive Democrats in Connecticut – there is but one solution to declining revenues — you increase taxes. And when in response to tax increases revenues decrease, you increase taxes further, a process that results in further diminished revenues, which leads to deepening and repetitive state deficits, which leads to more tax increases, which leads to — guess what? Lame-duck Governor Malloy is the author of two massive tax increases, both the largest and the second largest in state history, and yet deficits continue to raise their horned heads as taxpayers and businesses leave the state.

Connecticut hospitals will not be leaving the state. They are stationary tax targets, ducks set up in a row in Connecticut’s tax carnival, easy prey. And that was – note the past tense – where the money was before progressive legislators forced Connecticut hospitals to lay down for a bloody stretch on Malloy’s tax bed.

Now – better late than never — Hartford Courant business reporter Dan Harr tells us:

“Connecticut’s 28 acute-care hospitals collectively saw their gain from operations fall by 17 percent in the fiscal year that ended Sept. 30, to a level that’s not sustainable for the system as a whole over the long haul.

“One big reason for the decline: For the first time, a state tax on health care providers that started in 2012 exceeded the total amount of operating surplus the hospitals had after they paid the tax.”

Here is the inconvenient truth Connecticut’s progressive procrustean lawmakers have trimmed to their narrative, lopping off limbs to suit their purpose: The more you tax, the more you spend; the more you spend, the more you are forced to tax. Inconvenient corollary: There is but one escape from this destructive process — you must sizably reduce spending permanently.

In Connecticut, the failure of government to act for the benefit of the whole state, has led over a period of years to permanent debts and deficits.  All these truths are conveniently tailored by progressives to fit an iron, inflexible, narrative. And never mind that reality intervenes to reduce to dust the presuppositions of the narrative, the most destructive of which is this: If modest taxation is good, immodest, shameless, limitless taxation is better.

Better for whom – qui bono? Who benefits from excessive taxation and entangling regulation, beyond self-serving politicians who wear on their ever expanding chests ribbons and metals that proclaim them as saviors of the state when, in fact, they are saving nothing and making a botch of everything?

The Lowell Weicker 1991 income tax rescued big-spending legislators from the obligation to make prudent, permanent, long-term cuts in spending; ditto Governor Malloy’s two massive tax increases. Tax increases swell government, but a tax placed on, say, restaurants, in the form of mandated increases in the minimum wage, ultimately ends in fewer restaurants, and fewer jobs for people who are not electrical engineers or puffed up, glory seeking politicians.

Another inconvenient truth: Whatever you tax tends to disappear. And, almost always, vanishing large businesses such as General Electric carry wealth with them into other states, inevitably reducing state revenues, which prompt progressive legislators to impose further tax increases – the “abracadabra” that makes the real wealth of the state disappear.

For the real wealth of a state is not measured by the size of its treasury, but rather by the disposable income of people unencumbered by crippling and expensive regulations. Liberty is wealth and — wealthy people will tell you — wealth is liberty. When the state is wealthy and the people poor, it is the state unchecked by the people that is at liberty.

Let those who have eyes see, let those who have ears hear. People in Connecticut are groaning in pain. It will not be long before they vote out of office those who have eyes but do not see, those who have ears but do not hear, and these false politicians, God willing, will not be saved by their false and comforting narratives.

Don Pesci is a Vernon, Conn.-based political columnist.

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