Blue States Stealing Kid’s Money

Well, not money actually belonging to children but money allocated to educate our youth so it’s the same thing, right?

First, the back story.

Democrats in Connecticut have created a massive debt problem with decades of poor fiscal decisions and now in desperate straits. According to Truth in Accounting, Connecticut is one of 39 “sinkhole states” that do not have enough assets to cover its debt. In fact, it ranks at the bottom of the list barely beating out New Jersey as the state in the worst fiscal condition. TIA calculates that Connecticut has only $10.1 billion of assets available to pay bills totaling $72.2 billion.

Fast forward to present day. What can a poor progressive do?

The obvious solution is to look for previously protected mountains of money and institute a tax for the common good.

American Interest documents just such a solution:

Connecticut Democrats are going after Yale, for the same reason Henry VIII went after the monks and Willie Sutton went after the banks. The Wall Street Journal reports:

The state of Connecticut wants its richest university to share more of its wealth.

Facing budget shortfalls and a deep pension hole, Connecticut lawmakers this week proposed taxing the investment profits of Yale University’s $25.6 billion endowment, the nation’s second-largest after Harvard University’s. Yale is located in New Haven, Conn.

… Connecticut is home to more than 40 colleges. But the potential tax singles out Yale because it would affect only endowments with $10 billion or more in assets.

$10 billion is certainly a good starting point. How many universities could that possibly affect?

Infographic: The Wealthiest Private Universities In The United States | Statista

You will find more statistics at Statista

Once one state finds a new, hopefully legal source of income, how long before other desperate states follow suit? Every one of the universities listed in the graphic above are in a sinkhole state (although Indiana barely qualifies with only a debt of $700 per taxpayer).

And once the taxation of sitting money becomes legal, how long until it is applied to other private sources? Churches will probably be safe (hopefully), but your 401K? Don’t bet on it. After all, it is for the common good.

Posted March 29th, 2016 Filed in Economics and the Economy, Taxes and the IRS