The Chicago Tribune takes an editorial stand against an Illinois income tax bill:
Democratic lawmakers who approved that 67-percent income tax rate increase on their night of infamy, 1/11/11, stuck themselves with three awful problems. For which they’re plotting a solution that would suck additional billions of dollars into Springfield — and would aggravate the anti-business tax climate that has helped Illinois achieve America’s second-highest unemployment rate.
Their plan — as with the 2011 vote, every sponsor is a Democrat — would replace Illinois’ flat-rate income tax with a progressive schedule. As with federal taxes, higher-income families would pay at higher rates. The sales pitch is “fairness.”
To which you should look Democratic legislators in the eye and ask: So this isn’t about lifting even more money out of taxpayers’ pockets? You guarantee this would be revenue-neutral for Springfield?
But if you want an answer, wear good running shoes so you can chase your fleeing legislators. Because imposing a progressive tax rate scheme on this economically teetering state is all about lifting more money from Illinois employers — especially small business operators and farmers — and from other taxpayers too.
Think of this as the ruling party’s Tax-Hike Plan B. It’s a new shiny ball, intended to steal your focus from Tax-Hike Plan A. That’s the huge 2011 increase that was sold as temporary — scheduled to start rolling back after 2014 — but which has buried Democrats under their humiliating heap of broken promises.
I am shocked — shocked! — to see that tax increases don’t solve government finance problems. (See Doyle, James, and Wisconsin Legislature, 2009–10.)
• Democratic leaders made many promises during their 1/11/11 floor debate: Raising individual and corporate tax rates by 67 and 46 percent, respectively, would ease pension problems, close future budget deficits — and cover billions in overdue bills. “We are going to have our bills paid,” Senate President John Cullerton pledged. “It’s going to absolutely boost our economy and create jobs when we pay those people what they’re owed.” Oops. Instead, lawmakers have grabbed the new billions, raised spending every year, and the state still has $6.1 billion in unpaid bills — a total projected to reach $7.5 billion next month, and to approach $9 billion in November or December.
• Honest backers of that tax increase no longer pretend it hasn’t helped make Illinois’ jobless rate the nation’s second-highest. The nonpartisan Tax Foundation rates Illinois’ business tax climate as only 29th best in the U.S. Illinois’ total state and local tax burden ranks ninth highest and, owing to a delay in some census statistics, that miserable ranking doesn’t yet reflect the tax increase of 1/11/11.
• Some Democrats have plotted all along to make their temporary tax hike permanent. Others fear casting that vote and won’t be able to hide: Whether to extend the hike will be a huge issue in the campaign for governor.
At least their idea is now out there for debate. If their earlier ideas hadn’t left Illinois so devastated — $200 billion in debts and unfunded pension liabilities — we might be open to this one. But we are where we are: Our jobless rate is stubbornly high as our lawmakers stubbornly spend their way to re-election.
This as employers hire in other states, some of which are cutting taxes: A new budget from Ohio’s Republican legislature and governor, signed into law last Sunday, reduces personal income taxes by a total of 10 percent over three years.
Illinois’ insolvency, meaning the state still can’t pay bills as they come due, has prompted public officials and agencies to adopt some economies, even as their total spending rises. But citizens need to see much more of that before they even consider giving lawmakers a license to raise rates and drive away more jobs. …
We’re happy to engage in this debate, early and often. One request, though, to supporters of a progressive income tax: Be honest. Admit to voters that for all your talk of “fairness,” you came up with this plan because you want private-sector workers and companies paying much more into your public sector.
Recall that during this state’s 2010 gubernatorial campaign, the Democratic response to Republican candidate Scott Walker’s correct statements about the disastrous state of state finances was that (1) the multiple nine- and 10-digit deficits didn’t exist, and (2) taxes should be raised. The Tribune’s last sentence could have been written three years ago for Wisconsin.
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