Raising Taxes Will Not Lead to Success

More Talk on Taxes

The Legislature may not be in session but the talk about the state budget and taxes continues. The non-partisan Illinois Policy Institute released a report on how state government can get its fiscal house in order so to allow the 2011 state income tax increase begin its scheduled rollback beginning January 1, 2015.
Meanwhile, there are a number of my Democrat colleagues who are talking more taxes, different taxes, or slowing down the rollback of taxes because they admit they can’t get the state budget under control. Debt and deficit continues to rise. Of course, what they don’t tell you is how overspending has continued to out-pace the tax revenue coming into the state despite their 67% state income tax hike of 3 years ago. They promised to start rolling it back at the end of this year but it looks like they will fail to keep that promise.

Reality Check Rejected

State government didn’t have to be in this situation where it is poised to renege on a promise made to each taxpayer. Instead of a tax increase that Republicans knew wouldn’t solve the state’s financial problems; we offered the “Reality Check” budget plan, an alternative to the tax and spend way of thinking.

It was a budget guide that had a menu of possible spending cuts and reorganized priorities. It was a starting point for budget negotiations showing surpluses instead of deficits were possible with a discipline in spending. Unfortunately, “Reality Check” was ignored. Even Governor Quinn said at the time, “I’m not listening to them (GOP).” You can see the Reality Check plan for yourself at www.IllinoisRealityCheck.com or click on the Reality Check picture.

Raising Taxes Will Not Lead to Success -You Have To Fix The Problem.

The only way to begin addressing Illinois’ unprecedented debt problem is to take a real hard look at the facts and then take the appropriate action to fix it, as difficult as that may be. The longer we wait, the harder it will be to accomplish. The truth is government cannot continue to live like this; we have to live within our means.

It seems obvious that raising taxes again after failing to keep your promise about the last tax increase is not a recipe for success. You might say it’s a really dumb idea like concrete parachutes or a helicopter ejection seat. But seriously, how can those who have presided over the state’s current budget and financial crisis; who then failed to keep their promise to solve it after taking a week’s salary each year for the past 3 years, now insist that we give them more of our hard-earned wages?

As I have previously reported here, not only is there talk about making the so-called “temporary” tax increase permanent, there’s talk about a slower rollback or completely changing Illinois income tax from the Flat tax to a Progressive tax. Flat is fair because everyone pays the same percentage of their income. The Progressive punishment tax punishes success by increasing the rate on people who earn more money. Punishing higher wage earners doesn’t help lower wage earners.

A faulty financial track record leaves great doubt that our state’s financial problems will be solved with more money coming out of our paychecks.

How We Compare To Our Neighbors

It probably comes as no surprise to you that our state economy continues to struggle. But not all states are suffering the same. There was a critical analysis of Illinois’ economic policies in the Wall Street Journal this week. The publication compared Illinois’ economy with that of four other Great Lakes states the federal government uses when surveying economic performance. The analysis includes what has happened in Illinois, Michigan, Wisconsin, Indiana and Ohio over the past three years. Illinois unemployment is at 8.7%, second highest in the nation and it’s only fallen by 0.7 percentage points since Gov. Quinn began his last term in January 2011, when the Governor and his legislative allies passed that 67% state income tax. Meanwhile, government policies in the other states led to tax cuts and labor reforms, which accounted for dramatic decreases in unemployment: In Michigan, from 11% to 7.7%; from 7.7% to 6.1% in Wisconsin; in Indiana, from 9% to 6.1%; and from 9.1% to 6.5% in Ohio. The article also reported that Illinois had the slowest rate of personal income growth among those same states.

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