Tax and Spend in Illinois
In Washington, as I argued in anticipatory posts here and here, William M. Daley’s appointment as White House Chief of Staff is a sign that President Obama is about to follow the path he laid out when he appointed a presidential commission to advise him on the budget and the deficit – which is to say, that this would-be Messiah will soon pose and preen, in the fashion pioneered by Slick Willie from Arkansas, as Mr. Balance-the-Budget.
In Illinois, however, the state whence the President and his new Chief of Staff hale, things would appear to be different. CBS in Chicago reports:
Top Illinois Democrats have agreed to push a plan that would temporarily boost income taxes by 75 percent and double cigarette taxes, Senate President John Cullerton said Thursday.
Illinois’ personal income tax rate, now 3 percent, would climb to 5.25 percent for four years under the plan Cullerton outlined. After that, it would drop to 3.75 percent.
That means someone who now owes $1,000 in state income taxes would owe $1,750 at the new rate, then $1,250 after four years. . . .
Democrats say they have no choice but to raise taxes as one part of a solution to Illinois’ massive budget crisis. The state deficit could reach $15 billion in the coming year. The government is borrowing money to cover some obligations, letting bills go unpaid for months and cutting corners everywhere from state prisons to state parks.
There is not a word in this report about there being a prospect for genuine spending cuts. Instead, Illinois’ Democrats, who control the governorship and both legislative houses, plan merely to institute a moratorium on new programs and to limit spending growth to 1% a year. They are obviously betting that in three years there will be an economic boom sufficient to make Illinois solvent, and Governor Pat Quinn – who pledged during his recent gubernatorial campaign that he would not raise taxes more than 1% -- is prepared to break his promise on the presumption that in four years, when he comes up for re-election, all will be well.
This is, I suspect, a straw in the wind. It would take enormous political courage – one might even say, statesmanship – for the Democratic Party to turn on the public-sector unions. My prediction is that, out in California, Governor Moonbeam will follow the example of Pat Quinn and that Andrew Cuomo in New York – despite all of his tough talk during the campaign about the need to restrict taxes and dramatically cut spending – will do the same.
If I am right in my suspicions, this is very bad news for the people of Illinois, California, and New York and very good news for the virtually moribund Republican Party in each of those states. An economic boom on a scale sufficient to make these states solvent is not on the horizon, and dramatic tax increases in states where the overall tax burden is already quite high will serve only to reduce consumption, to inhibit further investment, and to encourage the prosperous and entrepreneurial to relocate elsewhere.
The question of the hour is this: Will President Obama follow the example of Pat Quinn?
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May '10
Re: Tax and Spend in Illinois
I'm trying to figure out where I'm going to come up with an extra $1500/yr, plus paying the increased local property taxes that are coming along (the property tax "relief" being proposed is chump change compared to the property tax increases I'm looking at).
Anyone want to buy a well-located house in a nice Chicago suburb?
Nov '10
Re: Tax and Spend in Illinois
When Democrats raise taxes, the extra revenue is always squandered — usually through the creation of new spending programs. The money is never used to reduce debt, and old spending programs are never cut.
Watch how fast those "temporary" tax hikes become permanent. Politicians are astoundingly blind even to their own mendacity.
Edited on Jan 7, 2011 at 7:58amAug '10
Re: Tax and Spend in Illinois
Ordinarily I give no thought to either Illinois or cigarettes, but the last time I was in the state, I mean the moment I entered the state, I was warned off smuggling. What a miserable place this must be, I thought.
Jul '10
Re: Tax and Spend in Illinois
"If I am right in my suspicions, this is very bad news for the people of Illinois, California, and New York and... " TEXAS. They all flee Here to Texas and vote the same type of politician. It never occurs to them that it is liberal politicians who are most responsible for their state's situation.
Jul '10
Re: Tax and Spend in Illinois
And not only that, but when the citizens of Illinois demand that the legislators keep their promise and return the rates to the pre-hike level, we will be accused of demanding a "tax cut".
The leadership in this state is despicable.