Illinois’ Biggest Target?!? – Taxpayers
In my last report, I detailed one of four pending proposals in Illinois that would inflict a progressive “punishment” tax on every single Illinois taxpayer. In this column, I want to highlight the irresponsibility of unconstrained “tax and spend policies.” You and I are paying a huge price. And, we might soon be paying more.
The theory behind the progressive income tax, also known as a graduated income tax, is to increase the income tax rate on an individual or family as their income increases. As I wrote in my last column, it’s discriminatory to impose different rates on people based on whether they earn more or less than their neighbor. Such a policy, if applied to the grocery store, would base food prices on paychecks.
“If It Moves, Tax It”
Some politicians will argue that Illinois’ debt and the size of state government is justification for digging deeper into our pockets. However, after a massive income tax hike in 2011 – only part of which was “temporary” – and the largest, permanent increase in the state income tax passed in 2017, Illinois remains massively in debt. The loss of personal and business income from the 2011 state income tax hike alone is estimated at more than $30 billion, according to a September 2017 report by the state’s Commission on Government Forecasting and Accountability.
This is money right out of the pockets of families and employers; money siphoned right out of the state’s economy. What do we have to show for this level of income confiscation?
• State debt that’s still out of control.
• Less money for families who are trying to save for a family vacation or their children’s college education, and
• Less money for Illinois businesses who want to invest in expansion and new employees.
According to the personal financial website, WalletHub, Illinoisans pay the highest “Effective Total State & Local Tax Rates on Median U.S. Household Income.” Illinois is ranked 51st, the worst among the 50 states plus the District of Columbia in the website’s most recent report. We are also ranked 50th for our sky-high property tax burden. Additionally, the WalletHub analysis estimates Illinois taxpayers’ total state and local tax burden on median income at $8,299 annually. “Median income” is the figure that divides income into two equal groups, which means that half of Illinoisans have an income above the median, and half of Illinoisans have an income below the median.
In a previous column, I noted a recent report by U.S. News & World Report, ranking Illinois at the bottom of the 50 states of Fiscal Stability. Clearly, high taxes are not the solution. The report further evaluates Fiscal Stability, giving Illinois bottom-of-the-barrel grades for Government Credit Rating, Public Pension Fund Liability and Budget Balancing.
The bottom line is Illinois repeatedly fails to act responsibly with the tax dollars it receives. Despite the obvious, state government proposes to take more of our income.
If you’re facing a pile of bills you can’t hope to pay or outstanding loans where you have fallen behind in payments, what do you do? You would assess the situation, identify the problem and then move forward with a solution. Is it too much to ask government that it live within its means just like families and small businesses must?
Springfield knows Illinois is in the midst of an unprecedented fiscal crisis. Unfortunately for us, the way this crisis has been handled is to “kick the can down the road.” Let others (future generations) deal with it, but keep spending. Then confiscate more income from Illinoisans through higher taxes.
Illinois is not one new tax or tax increase away from prosperity. Our most recent past is proof that giving state government more of our hard-earned money isn’t an answer to the state’s debt problem. Illinois doesn’t have a tax revenue problem. Illinois has a spending problem.
More to Come
There’s more to report on Illinois taxes and fiscal irresponsibility and how these things combined promote an exodus of family and friends, leading to a loss of population in Illinois, and threatening our representation in Congress. Don’t miss my next column.
President Ronald Reagan hosted a Small Business Conference at the White House on August 15, 1986; and while he was referring to the federal government, his wise words about government and taxes could easily apply to Illinois government:
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” – President Ronald Reagan (1911 – 2004); 40th President of the United States; Illinois native son.