Commentary—

If You’re Rich, Don’t Die Yet

By William A. Collins

Wealthy folks,

Still hold their breath;

To keep their assets,

After death.

Now here’s some news. Many wealthy Connecticut citizens don’t like taxes, at least not taxes on them. Sales taxes are OK, or the gas tax, but definitely not the estate tax. Fortunately, since that levy only kicks in for assets over $2 million, a bunch of us may escape paying it altogether. In Greenwich though, just the cut-stone wall separating the house from the road is worth $2 million.

Consequently, a Republican state rep from that town is vigorously exercised about the “unfairness” of it all. On the face of it, you wouldn’t think there would be much complaint. After all, when it’s time to pay, you’re dead. Obviously, it’s the spouses and kids who have to give up a tad of their unearned inheritance who are complaining.

One’s heart bleeds with sympathy, of course, especially after the federal government has just massively lowered its taxes on these same folk. They are already getting to keep more of their income than at any time since before World War II. Keep in mind that the federal estate tax is disappearing, top-bracket income tax rates have dropped, and the capital gains rate has been severely cut.

It should hardly come as a surprise then, that the Democratic General Assembly saw an opportunity here to recapture some of that windfall which upper-class folks no longer have to pay to Washington. Their first plan was to jack up the state income tax on high earnings. In Connecticut our rate is still pretty flat. But the Republican governor wouldn’t go along. The rich, after all, are her buddies.

So in the end a compromise was hammered out. It called for an increase in the estate tax. In Greenwich, this action has drawn dire predictions. We are warned that the affluent will move to Florida or other states that are less relentless in gouging the successful. If this fallacious argument sounds vaguely familiar, it was bandied about everywhere in the run-up to passage of the state income tax.

But not to worry. Despite our steady sapping of the wealthy, they mindlessly continue to move in here lickety-split. The Hartford Courant recently ran an aerial photo of a large new development in Avon. All the huge houses under construction there have prices of near $1 million.

And Stamford is about to welcome the American headquarters of the Royal Bank of Scotland. Those moguls are not about to commute from Florida. Even when they no longer have to go to the office every day, they’ll stay here. This is where their colleagues live, who will continue to “ooh” and “aah” at their marvelous mansions and gorgeous grounds. Since New York and New Jersey actually tax them more, Connecticut still looks pretty good.

In fact, the state might be healthier if some of the rich actually did move away. They’ve driven real estate values so high that average folk have a hard time affording a place to live. For the poor it’s notably worse, as they gradually are forced into inner cities and stifling tenements. The state has become more and more segregated as a result.

Even the governor’s new plan to help the middle class and the poor with heating costs reflects this GOP fixation on tax cuts. Qualifiers would, as usual, get a credit against their income tax instead of cash. But the poor don’t pay the income tax. That means all the benefit would go to those higher up the ladder.

Now tell me, if you’ve accumulated some wealth, could you bear to leave a state with a philosophy like that?

(Columnist William A. Collins is a former state representative and a former mayor of Norwalk.)