One of the fringe benefits of Washington’s stimulus program has been inflated stock portfolios.  This has delivered a great boon for certain state governments.  In Connecticut, for example, a state that taxes capital gains as regular income, this year’s budget surplus is projected to be $470 million.

That’s quite an achievement.  Especially when you consider the state’s rainy-day fund will hit an all-time high of $4.5 billion.  Federal coronavirus stimulus is also bringing $6 billion into the state.

Yet for the greedy fellows in the Connecticut state legislature the budget surplus is not nearly enough.  They want to soak the rich for the noble purpose of helping people.  Lawmakers are proposing a “surcharge” on high earners; single filers making more than $500,000 will be subject to a combined capital gains rate of 8.99 percent.

But that’s not all.  The state legislature also wants to create something it calls a “consumption tax.”  People earning more than $500,000 would pay 0.7 percent of their adjusted gross income.  That rate would rise to 1.4 percent for those earning $2 million, then 1.5 percent over $13 million. Continue reading →