Meanwhile, here in Illinois the Democrats in the state legislature have another big idea on which they can agree—that there is no limit to the amount of revenue that may be extracted from the taxpayers of the state of Illinois as this Sun-Times column from Mark Brown explains:
Sometime before the end of the coming week, the Illinois General Assembly is expected to approve a constitutional amendment allowing for a graduated state income tax, at long last putting the matter before voters in the 2020 general election.
What happens next is something most Illinois voters may have never seen: a chance to directly decide a major public policy issue by referendum, accompanied by the bruising campaign that goes with it.
I’m looking forward to the vote, having believed for some time that Illinois needs to scrap its flat tax, but dreading the campaign that will come first.
All the same mechanisms we are accustomed to seeing deployed in support of major political candidates — tons of television, digital and direct mail advertising — will be trained instead on an idea. The nuances of tax policy will be reduced to 15- and 30-second spots that further exploit our culture wars.
IMO Gov. Pritzker’s “Fair Tax” proposal is less workable in Illinois than it might be elsewhere for the simple reason that while the legislature may be able to raise the marginal tax rates on “the rich” they can’t force the actual rich to stay here. Note that those making $250,000 per year, the proposed threshold for those who will pay more taxes, include married couples consisting of a Chicago firefighter and a Chicago public high school teacher or the median physician. They will find it harder to leave Illinois than the top management of a big company will. Illinois is losing population faster than any other state in the Union and I suspect the “Fair Tax” will not slow that process.
“They will find it harder to leave Illinois than the top management of a big company will.â€
Or your favorite private equity guy. Or big rainmaker salesman. Or big rain man bank loan originator. Or successful RE broker. I could go on.
These are my friends. These are successful people. Even if tied to IL in peak earning years, when the kids are gone………..not so much. I have a friend simply doing a switch. Primary residence now FL; secondary IL. I’ll bet it’s a loss to IL in income tax alone of maybe $50k per year.
Chicago is a wonderful city. But IL politicians have lost all perspective.
The solution to the rich moving out of states with high tax rates is clear and simple: Require them to have a moving permit to leave. The price: Whatever you got, traitors.
I would also bet that a graduated tax is in Illinois near future, regardless what the voters say. Because the law of contracts (i.e. public service pension promises) trumps any pesky requirement that a constitutional amendment need be passed in order to seize that badly needed revenue to make retired government workers whole. Other than the fact that the new revenue stream is unlikely to be directed to those deep in the hole pension plans. Yes, I’m feeling pretty cynical today.
They have plenty of perspective. Dance with the one that brung ya. It’s completely self-serving.
Dave –
It’s a fleeting asset. Now, I admit it may take a long time to, uh, fleet. And it’s immoral.
I have spent my entire professional life attempting to discover or create enduring value. Franchise value. I want to buy those companies at a fair price and impart whatever value improvements I can. That’s the gig.
I’d be a lousy politician.