Illinois is the test case for Democrat economic and tax policies

The new Democrat governor in Illinois, billionaire heir to the Hyatt Hotels fortune J.B. Pritzker, gave a speech about how grave the budget situation is.  He correctly said the problem has compounded itself for decades, but somehow, he mostly blamed Republican Governor Rauner, who was in office for four years, for the problems and didn't comment at all on the Democrat-controlled Legislature.

The governor pointed out that Illinois's 2020 budget was $3 billion in the hole with a backlog of $15 billion in unpaid bills.  Somehow, his solution was to tax more, with a series of new taxes totaling $1.1 billion.  He also wants to tax more in the future by changing our state constitution to allow for a progressive income tax, which he says will be on the "rich," to get away from what he describes as our current regressive income tax structure; spend more on new and existing programs; spread out payments more on the massively underfunded pensions; and borrow $2 billion to throw into the pension plan.


J.B. Pritzker (YouTube screen grab).

How does anyone pretend borrowing money to pay current bills and spreading out the massively underfunded pension plans is an "honest" or balanced budget?  I wonder what could go wrong!  Or why we are in such a huge mess with people with these viewpoints running cities, states, and the federal government throughout the United States.

As far as I can tell, all the Democrats running for president say the U.S. tax code isn't progressive enough, and the rich don't pay their fair share, even though the rich pay a much higher share of taxes than their share of income.  Our new governor shows his economic ignorance by saying our flat tax is regressive.  Our current flat 4.95% tax is slightly progressive, not regressive, because of exemptions, state earned income tax credit, and other credits that are worth more percentage-wise to people at the bottom end of the scale.  For example, a person making $1 million pays a little more than 10 times what someone making $100,000 pays and significantly more than 100 times what someone making $10,000 pays.  That is progressive, not regressive. 

Illinois and other high-tax states are already chasing away people to other lower-tax, better-business-climate states.  The higher those taxes and other costs go, the more people and businesses have the incentive to move.  Why would businesses and individuals want to move to high-tax states when there are so many other choices?

If Democrats win in 2020 and get their way to raise corporate taxes back up substantially, to implement taxes as high as 70% on individuals, to institute a wealth tax, or to push estate taxes to over 70%, people and businesses will have the incentive to stay in or move to other more welcoming countries.  It is not a hard concept to understand that high taxes and other costs push businesses and individuals to better alternatives.

Maybe our new governor, journalists, and other Democrats should read what Governor Cuomo of New York said about the punitive nature of trying to tax the rich too much and how they show their disapproval by leaving.  

"I don't believe raising taxes on the rich," Cuomo said.  "That would be the worst thing to do.  You would just expand the shortfall.  God forbid if the rich leave."

He's absolutely correct, though he'll no doubt get royally roasted by the far-left of the New York Democratic Party.  The state already has a steeply progressive tax code.  The top 1% of earners pay 46% of all the income taxes.  That's punitive.

In support of his comments, Cuomo cited "anecdotal" evidence that showed high-income earners are leaving the high-tax Empire State for other low-tax states.

But the evidence isn't merely anecdotal.  It's a fact.

Why can't most Democrats understand the problem?

Here is a non-inclusive list of regressive taxes, most of which Democrats openly support, including some new ones that our new governor proposes.  Democrats always pretend they care about the poor and middle class, but they gladly tax and fee them to death.  All those taxes almost always take a much higher share of the income of people and families in the lower- and middle-income levels, which makes those taxes extremely regressive.

  • Marijuana taxes on recreational marijuana (new proposal in Illinois)
  • Marijuana taxes on medical marijuana
  • Sports betting taxes (new proposal in Illinois)
  • Gambling taxes
  • Plastic bag tax (new proposal in Illinois)
  • E-cigarette tax (new proposal in Illinois)
  • Existing cigarette taxes (proposal to raise this tax in Illinois)
  • Liquor taxes
  • Property taxes 
  • Sales taxes
  • Gas taxes, federal and state (many proposals to raise these taxes in Illinois and federally)
  • Telephone taxes
  • Utility taxes 
  • License plate fees and other fees the state and federal government charges

There are also suggestions for carbon taxes and value added taxes.

Why haven't all these taxes solved the revenue problem throughout government?  Could it be that the problem is that politicians of both parties spend too much and that there will never be enough to cover the greed of politicians and bureaucrats?

Why haven't the tens of trillions spent on anti-poverty programs and Great Society programs reduced poverty much or narrowed the wealth gap?  Do Democrats understand that most of the wealthy today moved up the economic ladder because of capitalism, not because of government dependency?

Do politicians understand or care that the more they take from the private sector for themselves, the less that can be used to flow through the economy to stimulate growth and allow opportunities for people and businesses to thrive?

Our new governor also bragged about slamming through the job-destroying $15 minimum wage law.  Small and medium-sized towns, where living costs are lower, struggle to keep people from moving by maintaining jobs, and now Democrats throughout the country have decided that fewer jobs would be better and more dependence on government would be great.  They greatly harm the ability of the young, the poor, minorities, the less educated, and older people who want to add to their income to get jobs or to start moving up the economic ladder.  Most of us got our start at minimum-wage jobs or lower.  I worked several jobs for around $1 an hour when I was young, and not once did I believe that those jobs were going to be able to maintain a family.  My parents taught me to work, and low-wage or cost jobs gave me the opportunity.  Minimum-wage laws have never been able to feed a family of three or four, so why do Democrats act like they should?

When you take a $15-per-hour job, add in payroll taxes, mandated health insurance, mandated paid leave, and other things from the Democrat wish list, you probably get to somewhere around $25 per hour or $50,000 a year for starting jobs.  It is a shame that Democrats have so little knowledge of economics or the history of socialism (or don't care) that they are willing to destroy the greatest economy that ever existed with the support of almost all journalists.

The new Democrat governor in Illinois, billionaire heir to the Hyatt Hotels fortune J.B. Pritzker, gave a speech about how grave the budget situation is.  He correctly said the problem has compounded itself for decades, but somehow, he mostly blamed Republican Governor Rauner, who was in office for four years, for the problems and didn't comment at all on the Democrat-controlled Legislature.

The governor pointed out that Illinois's 2020 budget was $3 billion in the hole with a backlog of $15 billion in unpaid bills.  Somehow, his solution was to tax more, with a series of new taxes totaling $1.1 billion.  He also wants to tax more in the future by changing our state constitution to allow for a progressive income tax, which he says will be on the "rich," to get away from what he describes as our current regressive income tax structure; spend more on new and existing programs; spread out payments more on the massively underfunded pensions; and borrow $2 billion to throw into the pension plan.


J.B. Pritzker (YouTube screen grab).

How does anyone pretend borrowing money to pay current bills and spreading out the massively underfunded pension plans is an "honest" or balanced budget?  I wonder what could go wrong!  Or why we are in such a huge mess with people with these viewpoints running cities, states, and the federal government throughout the United States.

As far as I can tell, all the Democrats running for president say the U.S. tax code isn't progressive enough, and the rich don't pay their fair share, even though the rich pay a much higher share of taxes than their share of income.  Our new governor shows his economic ignorance by saying our flat tax is regressive.  Our current flat 4.95% tax is slightly progressive, not regressive, because of exemptions, state earned income tax credit, and other credits that are worth more percentage-wise to people at the bottom end of the scale.  For example, a person making $1 million pays a little more than 10 times what someone making $100,000 pays and significantly more than 100 times what someone making $10,000 pays.  That is progressive, not regressive. 

Illinois and other high-tax states are already chasing away people to other lower-tax, better-business-climate states.  The higher those taxes and other costs go, the more people and businesses have the incentive to move.  Why would businesses and individuals want to move to high-tax states when there are so many other choices?

If Democrats win in 2020 and get their way to raise corporate taxes back up substantially, to implement taxes as high as 70% on individuals, to institute a wealth tax, or to push estate taxes to over 70%, people and businesses will have the incentive to stay in or move to other more welcoming countries.  It is not a hard concept to understand that high taxes and other costs push businesses and individuals to better alternatives.

Maybe our new governor, journalists, and other Democrats should read what Governor Cuomo of New York said about the punitive nature of trying to tax the rich too much and how they show their disapproval by leaving.  

"I don't believe raising taxes on the rich," Cuomo said.  "That would be the worst thing to do.  You would just expand the shortfall.  God forbid if the rich leave."

He's absolutely correct, though he'll no doubt get royally roasted by the far-left of the New York Democratic Party.  The state already has a steeply progressive tax code.  The top 1% of earners pay 46% of all the income taxes.  That's punitive.

In support of his comments, Cuomo cited "anecdotal" evidence that showed high-income earners are leaving the high-tax Empire State for other low-tax states.

But the evidence isn't merely anecdotal.  It's a fact.

Why can't most Democrats understand the problem?

Here is a non-inclusive list of regressive taxes, most of which Democrats openly support, including some new ones that our new governor proposes.  Democrats always pretend they care about the poor and middle class, but they gladly tax and fee them to death.  All those taxes almost always take a much higher share of the income of people and families in the lower- and middle-income levels, which makes those taxes extremely regressive.

  • Marijuana taxes on recreational marijuana (new proposal in Illinois)
  • Marijuana taxes on medical marijuana
  • Sports betting taxes (new proposal in Illinois)
  • Gambling taxes
  • Plastic bag tax (new proposal in Illinois)
  • E-cigarette tax (new proposal in Illinois)
  • Existing cigarette taxes (proposal to raise this tax in Illinois)
  • Liquor taxes
  • Property taxes 
  • Sales taxes
  • Gas taxes, federal and state (many proposals to raise these taxes in Illinois and federally)
  • Telephone taxes
  • Utility taxes 
  • License plate fees and other fees the state and federal government charges

There are also suggestions for carbon taxes and value added taxes.

Why haven't all these taxes solved the revenue problem throughout government?  Could it be that the problem is that politicians of both parties spend too much and that there will never be enough to cover the greed of politicians and bureaucrats?

Why haven't the tens of trillions spent on anti-poverty programs and Great Society programs reduced poverty much or narrowed the wealth gap?  Do Democrats understand that most of the wealthy today moved up the economic ladder because of capitalism, not because of government dependency?

Do politicians understand or care that the more they take from the private sector for themselves, the less that can be used to flow through the economy to stimulate growth and allow opportunities for people and businesses to thrive?

Our new governor also bragged about slamming through the job-destroying $15 minimum wage law.  Small and medium-sized towns, where living costs are lower, struggle to keep people from moving by maintaining jobs, and now Democrats throughout the country have decided that fewer jobs would be better and more dependence on government would be great.  They greatly harm the ability of the young, the poor, minorities, the less educated, and older people who want to add to their income to get jobs or to start moving up the economic ladder.  Most of us got our start at minimum-wage jobs or lower.  I worked several jobs for around $1 an hour when I was young, and not once did I believe that those jobs were going to be able to maintain a family.  My parents taught me to work, and low-wage or cost jobs gave me the opportunity.  Minimum-wage laws have never been able to feed a family of three or four, so why do Democrats act like they should?

When you take a $15-per-hour job, add in payroll taxes, mandated health insurance, mandated paid leave, and other things from the Democrat wish list, you probably get to somewhere around $25 per hour or $50,000 a year for starting jobs.  It is a shame that Democrats have so little knowledge of economics or the history of socialism (or don't care) that they are willing to destroy the greatest economy that ever existed with the support of almost all journalists.