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NYT Cheers Illinois Raising Taxes 66%

From, where else, but the editorial pages of the New York Times:

Illinois Wakes Up

January 16, 2011

For years, Illinois, like so many states, pretended that it had not fallen off a budgetary cliff. It was spending too much and taking in too little revenue, but every year it would kick its problems into the next.

"For years" — even decades — property values and incomes have skyrocketed. And Illinois, like every other state, has been raking in tax money hand over fist.

Unable to pay its bills, it finally accepted reality last week and raised taxes on incomes and businesses — a first step toward getting its house in order.

Funny how raising taxes – rather than cutting spending – is seen as "facing reality." In reality, cutting taxes has always led to an increase in tax revenue. Whereas raising taxes has never worked, at least not for long. People adapt.

Also, as we have previously noted, this tax hike was rammed through by a lame duck session in the dead of night at the very last minute possible. It was clearly a proud moment for the state.

The action was immediately ridiculed by several governors around the nation who are still pretending that they can cut their way out of the enormous shortfalls they face, without raising taxes.

Wisconsin and Indiana predicted a windfall of angry corporations and residents would head their way from Illinois. Even Gov. Chris Christie, the New Jersey Republican, vowed to fly to Illinois to invite businesses there to defect to his state.

Gosh these other states and governors are fools. Whoever heard of anyone moving out of a state because of high taxes? The New York Times knows better than anyone that would never happen.

That makes great political theater. But businesses and voters in Illinois, and around the country, should take a closer look at the facts and figures, including their own.

After 22 years of not raising income taxes, Illinois saw its budget shortfall grow to $15 billion.

Again, Illinois was probably breaking all records just a few years ago for the amount of tax revenue that was pouring in during the boom times. But, as governments always do, they jacked up their spending to make (or surpass) what they were taking in, even then.

It had the lowest state credit rating in the nation, and it wasn’t paying its bills to hospitals and schools.

No, of course not. Hospitals and schools are always the first to feel the pinch.

But you can bet Illinois was paying the salaries and pensions and benefits for its untold number of public sector union workers. Salaries and pensions and benefits that were wildly bloated during the ‘good times.’

The Illinois tax rate was low before and remains low for big states. The income tax will rise from a flat 3 percent to a flat 5 percent. That will cause pain at the lower and middle levels of the economic scale, but the state’s millionaires will probably stay put….

Illinois’s corporate tax is going up to 9.5 percent from 7.3 percent, but that by itself is unlikely to send businesses packing. What businesses crave most is a stable environment in which to make profits, and Illinois was anything but stable. Businesses tend not to like it when health and education systems break down.

Hilarious. We are supposed to believe that businesses decide where to locate based on health and education systems. We are also supposed to believe that Illinois’ systems have not already long since broken down.

By taking this step, which will raise about $6.5 billion, the Illinois Legislature has begun to show residents and corporate leaders that it is serious about fixing the budget.

Again, only raising taxes shows seriousness of thought. Not cutting spending. Cutting spending is un-serious "political theater."

It still has a lot more to do. It must brave union opposition and bring down the cost of excessive health and retirement benefits for state employees, and examine all state salaries to make sure they are in line with the private sector.

Snort. Who says The Times has no sense of humor?

It must adhere to a new system to rebuild the budget each year, based on available revenues

What a novel idea. But first let’s raise taxes 66%. (A detail which The Times somehow fails to note, by the way.)

Well, thanks to what is left of our federal system, we will see which states prosper and which states fail.

This article was posted by Steve on Monday, January 17th, 2011. Comments are currently closed.

5 Responses to “NYT Cheers Illinois Raising Taxes 66%”

  1. GetBackJack says:

    I presume this means Ochs and Sulzberger own substantial interests in Indiana.

  2. Astravogel says:

    I heard that Arkansas’ Constitution of 1874 (when they finally
    got rid of the carpetbagger government put in by the occupation
    forces) forbids spending more than they take in. USA Today
    listed them as one of the four states not in financial trouble.

    Perhaps other states and nations should take note.

  3. mr_bill says:

    “…governors around the nation who are still pretending that they can cut their way out of the enormous shortfalls they face, without raising taxes. ”

    The statist-propagandists like the NYT are nearly frozen with fear that decades of sublime expansion of government might be turned back by the states’ present inability to pay for same. If governments would do only the things they were created to do, they would not have these deficits, taxes would be lower, and people would have the freedom to make more of their own decisions (and the responsibility to accept the consequences for those decisions). The statists detest all that freedom and responsibility, it would undermine their unending quest for power and control.

    I find it disingenuous that whenever the subject of budget cuts is approached, the statist shrieks “fire, police, and schools are being cut” in an obvious effort to scare the public, yet they never draw an ounce of attention to the ridiculous programs and expenditures that are causing the problem and ought to be cut. It is a tacit acknowledgment that they understand the legitimate role of government and are afraid to admit the extremes to which they have bloated and perverted the government.

  4. heykev says:

    As noted previously on this site, Gov Quinn ran on a platform of raising taxes (only in Illinois) but with a cap of 4%. He broke that promise with amazing speed. But it was really a matter of how much of an increase Michael Madigan wanted to impose.

    The only real question was how big the Tax increase by the Democrats would be. Once elected, Illinois politicians feel under no obligation to keep any promises made (except to cronies who are promised jobs, etc.) Here in Illinois, the real power belongs to Michael Madigan, who as Speaker of the Illinois House, has holds the real power. You can read more about him below.


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