Illinois Michiganders Around

The Land of Lincoln is trying to copy the fiscal model of the Land that the Economy Forgot.  The only state to lose population, and spend the entire first decade of the new millennium in a recession.  My home state of Michigan.

The plan?  Raise income taxes by 75%.  A Chicago Tribune editorial suggests that this is necessary.  But the editorial exposes the  world of fantasy that is progressive economic and political theory.

Some choice fantasy gems :

Illinois’ income tax rate is the lowest in the Midwest and one of the lowest in the nation.

I remember when a new secretary of state came into office and suggested that Illinois should raise the rates for drivers license renewals because they were lower than the surrounding states.  What did that have to do with anything?  It is not an argument, it is a non-sequitor.

And the low income tax rates are  offset by the high sales and property tax rates.   Illinois ranks 30 (1 being highest, 50 lowest) in total taxes paid.  So, they are a little behind average.  Anyone curious what happens to that number if they pass these tax changes?  It will catapult them ahead of everyone except New Jersey.  How is that a good thing?

He also says :

A modest increase in that tax rate would bring welcome stability to our state’s finances, lower our borrowing costs, give a much-needed boost to our business climate and promote entrepreneurship and economic growth.

I could argue economic theory, Keynsian vs. Autrian models, etc.  Or I can just post this link to a photo collection about Detroit.

Michigan is not doing well.  How is New Jersey doing with it’s highest tax burden in the nation?

How about this whopper :

More important, a revenue increase and stabilized state budget would send a message to businesses and investors that Illinois’ leaders — in government and in the private sector — are behaving like adults and living up to their responsibilities.

Where are the draconian cuts in perks to state legislators?  Even congress is cutting it’s “Money to pamper Congressmen” budget.  Where is that proposal in Illinois?  To be honest this sounds a lot more like, “Tax people into leaving the state because we don’t want to make any hard choices.  Oh, and we are going to use the extra money we take in to take out more huge loans we can’t pay back.”

My 8 year old has a more “adult” attitude to money.

The non-sequitors continue :

Illinois already has one of the lowest numbers of state employees per capita in the nation.

The next highest number belongs to : California.  In other words, profligate spending may have very little to do with the total number of employees per capita, and more to do with how the state allocates its dollars.  What sort of spending programs need to be cut?  Fine, trimming the bureaucracy alone won’t do it.  But it’s a nice start, don’t you think?

If you are raising taxes that much, how about cutting your own staff salaries?  How about the PE teacher in Illinois that makes 147K/year?  What about that?  He was the 100th highest paid educator in 2007.  That means that 99 people make more than him.  Is that where the salary should really be?  Maybe a little lower would help.

How about this terrible idea :

public employee pension funds invest in in-state venture capital activities.

That assumes the public employee pension fund has any money in it in the first place.  How underfunded is that now?  The public sector unions are certainly not getting poorer in Illinois.  But sure, high-risk investments with money we took from our residents will surely get us out of this mess.

This is from the co-chair of the Governor’s Commission on Economic Recovery.  Of course, the voters of Illinois just re-elected their governor, so I suppose in a certain sense, they deserve what they get.

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