I don’t recall that Illinois has ever received the volume of attention from the editors of the Wall Street Journal that it has recently. I just wish it were for something more benign than Gov. Pritzker’s feckless tax and spend plan. In reaction to the governor’s plan to amend the state’s constitution to permit a graduated income tax for Illinoisans the editors declaim:
The Tax Foundation says the Governor’s proposal would catapult Illinois into the ranks of states with the worst tax burdens. Corporate income would be taxed at 10.45%, the third highest rate in the U.S., while pass-through business income would face a top rate of 9.45%, fourth highest. If the Governor manages to enact all that he’s proposed, Illinois would drop from 36th on the State Business Tax Climate index to third worst after New Jersey and California. Congratulations.
All of this comes at an especially difficult time for Illinois when it is losing people, after its neighbors have reduced tax rates, when its pension system is at least $135 billion underfunded, and when its wealthiest taxpayers are already paying more because of the $10,000 federal limit on the state-and-local tax deduction.
With his proposal, Mr. Pritzker is doing the bidding of the state’s public unions, which have long run the state through the office of House Speaker Michael Madigan. Having run Republican Bruce Rauner out of town after one term without reforming any part of government, these rulers for life now want to eliminate the last fiscal restraint in the state.
I’ve said it before and I’ll say it again. Illinois doesn’t have a benign climate or beautiful scenery. It doesn’t have mountains or an ocean. No one comes here or, indeed, stays here because it’s a great place to live. It’s too hot in the summer and too cold in the winter. Chicago isn’t the Big Apple or the Big Orange. Warrenville isn’t Silicon Valley. They come here to work and they stay here because it’s become their home. Illinois needs an attractive business climate and that includes low taxes.
I’m realistic enough to recognize that Illinois needs to address the problems that years of incompetent, dishonest, and corrupt government have bequeathed to us. We can’t do that simply by increasing taxes. I propose that we amend the state’s constitution in two ways: the legislature should have the power to impose a graduated income tax and to adjust the pensions paid to public employees at will. After that the immediate actions should be to impose a slightly graduated income tax and to limit the pensions that the state can pay to any public employee to three standard deviations above the median income for the state. The present median household income in Illinois is around $60,000.