Chris Powell: To end corporate welfare, cut taxes for all business

“The tax collector's office’’ (1640), by Pieter Brueghel the Younger

MANCHESTER, Conn.

At Connecticut Gov. Ned Lamont's order, state government is reducing its direct subsidies to businesses coming into the state or expanding here -- cash grants, discounted or forgivable loans and tax credits. These subsidies have reeked of political patronage and corporate welfare, have sometimes cost more than they gained, have incurred financial risk to the government, and have been unfair to businesses already in the state, which get nothing for staying.

The Lamont administration's new idea is to subsidize incoming businesses by rebating to them some of the state income taxes paid by their employees. This would incur little financial risk and expense to the state.

But this system still wouldn't be fair, for unless the line of business of the new company was unique in the state, state government still would be subsidizing the new company against its in-state competitors.

Last week, the Yankee Institute offered a better and perfectly fair idea: Eliminate grants, loans and tax credits to new businesses and simply repeal Connecticut's corporation business tax.

The Yankee Institute suggests that the tax's annual revenue to state government, averaging $834 million per year, isn't so much, only about 5 percent of the state's general-receipts.

This analysis underestimates the problem, since state government never can bring itself to reduce spending at all. But to make Connecticut much more attractive to business, it would not be necessary to repeal the whole corporation business tax. Repealing even half of it would send a remarkable signal around the country.

Of course, state government is always enacting tax cuts for the future and then repealing them when the future arrives. So to be believed, a corporation business tax cut would have to offer a contract to every business in the state and every arriving business guaranteeing that its tax would not be raised for, say, 20 years. But a big differential between Connecticut's business taxes and those of other states really might pay for itself far better than spot subsidies.

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OVERKILL ON YEARBOOK: Pranking high school yearbooks is a tradition almost as old as the yearbooks themselves. What would any high school yearbook be without a defaced photograph or gross caption?

But police in Glastonbury, Conn., are treating the recent yearbook pranking there as a felony, having charged the suspect, an 18-year-old student, with two counts of third-degree computer crime, each count punishable by as much as five years in prison.

That makes the offense sound like terrorism.

Meanwhile, young people with 10 or more arrests, many of them on serious charges like assault, robbery and car theft, are being released by Connecticut's juvenile court system without any punishment at all and now apparently are moving on to kill people, confident that the state lacks the self-respect to punish them for anything.

The irony here probably will turn out to be superficial, for the Glastonbury student almost surely will get similarly lenient treatment from the criminal-justice system, whose dirty little secret is that it seldom seriously punishes anyone for anything short of murder, seldom at all for a first offense.

If the offenses attributed to the student occurred before he turned 18, he may qualify for "youthful offender status," whereby a criminal case is concealed and offenders can be let off, maybe with a little social work, and no public record of their misconduct is maintained.

If the offenses occurred after he turned 18 and he is a first offender, the student can apply to the court for "accelerated rehabilitation," a probation that suspends and eventually cancels prosecution and erases the charges.

So despite his serious charges, the student won't be going to prison. But since the publicity will make the case harder to whitewash, the court might grant the student "accelerated rehabilitation" on condition of a public apology, especially since the yearbook publishing company, with spectacular generosity, has agreed to repair the yearbooks without charge.

Turnabout being fair play, the best justice here might come if the newspapers published and television stations broadcast the student's mug shot with various defacements and a gross caption to see how he likes it.

That might send him well on his way toward a career in computer hacking, politics or journalism.

Chris Powell is a columnist for the Journal Inquirer, in Manchester.