“The problem with socialism is that you eventually run out of other people\’s money.”: Margaret Thatcher
Illinois is a fiscal mess. It owes almost 6 billion dollars in unpaid debt. People who do business with the state are waiting for months to get payment. And its most well-to-do citizens are already taxed to the hilt.
So what is the Democrat solution to this problem? Tax \’em some more. It hasn\’t solved the problem yet, but now it will. Besides, Illinois is such a great place to live that they\’ll all happily acquiesce and pay it anyway.
If you think what I just wrote is snarky and sarcastic….think again. That is exactly what the Democrat solution is, and exactly how they view its result.
Here, let me show you, via excerpts from Ray Long, Monique Garcia and Maura Zurick\’s article in Friday\’s Chicago Tribune (the bold print is mine):
IllinoisDemocrats went all-in Thursday with their election-year class warfaretheme as Speaker Michael Madigan pitched the idea of asking voters toraise taxes on millionaires, Senate President John Cullerton advanceda minimum-wage increase and Gov. Pat Quinn compared wealthy opponentBruce Rauner to TV villain Mr. Burns.
Themoves continued a Democratic push to highlight income inequity thatstarted Tuesday night before Rauner had even claimed his narrowvictory in the Republican primary for governor. Rauner and Republicanlegislative leaders have countered by accusing Democrats of being taxhappy and trying to drive a wedge between the rich and poor.
Thenewest front in the campaign battle came as Madigan held a rare newsconference to announce he wants lawmakers to put a question on theNov. 4 ballot asking voters whether the state should raise the incometax by 3 percentage points on those who make more than $1 million ayear.
Thepowerful Democratic speaker said the tax hike on millionaires is away to generate more than $1 billion for elementary and high schools.Madigan based his calculations on what he said are roughly 13,675millionaires that lived in Illinois in 2011, brushing aside aquestion about whether such a tax hike might drive them out of thestate.
“Well,if they\’re in Illinois today, they\’re probably so much in lovewith Illinois that they\’re not going to leave,” Madigan said.”We\’ve done this because we feel that the millionaires inIllinois are the ones that are better equipped to support educationthan others.”
Did I exaggerate? At all? Nope.
Now, a little math. If there are 13,675 millionaires in Illinois, and this is supposed to generate “more than $1 billion”, how much do you suppose each of those millionaires is being asked to pay – in excess of the extremely high tax they already pay?
Put your calculators away. I\’ll do it for you. This means, on average, each millionaire will be told to fork over at least $73,126 more, on top of the top-end taxes he/she already pays.
Does this Madigan genius, and his boss, Governor Quinn, think all 13,675 love Illinois that much? Enough not to make another state their primary residence? Enough not to work at sheltering/protecting their money in ways they aren\’t using now?
What do these people think happens when they tax a segment of the population past the saturation point? NOTHING?
A quick example to make my point: In New York City, cigarette taxes are so high that an individual pack costs from $12 to as much as $15 (that is not a typo). They cost a fraction of that amount elsewhere.
Do you think New York City residents who smoke love the city so much that they happily pay that much for their habit? I hope you know better.
Bootleg cigarettes, run into the city by organized crime and sold on the black market (thus producing a huge windfall for the mob) now account for approximately 60% of all cigarettes sold in New York City. That\’s right. A majority of the cigarettes sold in NYC are illegal. And for no other reason than that the taxation has become so high that otherwise law-abiding citizens can\’t resist.
How is it done? Here\’s your answer:
…smugglers usually drive down the eastern seaboard to Virginia,which has the second lowest tax in the country at 30 cents a pack,and pay $15 to $20 a carton. They load up a U-Haul and return to NewYork City where cartons normally sell for $120 each.
Thesmugglers sell them there for $60 to $70 a carton – half price tothe smokers and without the tax collected. If they take apart thecartons and sell the contraband by the pack, the profit is evengreater in a city where a pack goes for about $12.
The result? Smokers pay half the price for their cigarettes. The city probably loses more tax revenue by turning those smokers into black market customers (who therefore pay no taxes at all) than it would have gotten if the taxes remained lower. And Mayor Bloomberg, who pushed through those taxes, got to strut around and pretend that the lower (legal) cigarette sales meant fewer people were smoking, instead of buying there cigarettes under the table. In other words, a pathetic, counterproductive joke.
That, folks is what the proposed tax hike in Illinois is going to do.
The 13,675 residents who Michael Madigan intends to target, like the smokers in New York City, will find ways of not paying that money – including some of them simply changing their primary residence altogether. The result will be far less revenue for the state than Madigan is projecting.
And since people in that financial category who were considering a move to Illinois – and people not currently in that financial category but heading there – will be dissuaded from living in Illinois, the net result of this punitive class-warfare tax might well be no gain at all in revenue, or even a significant loss.
That said, it must also be pointed out that – politically – this can be a pretty good short-term move. Obviously, just about all Illinois residents make less than $1 million a year and therefore can be told that they won\’t be affected by the tax.
All Madigan, Quinn and their fellow Democrats have to do is convince enough gullible voters that the tax will really generate $1 billion dollars rather than maybe netting out as a losing proposition…and that people in lower income brackets won\’t be next (as they were four years ago, when Democrats raised Illinois state taxes by something like two-thirds).
Branch Rickey, the iconic baseball executive, had a saying about getting rid of players with bad attitudes, even if they might have been productive on the field. He called it “Addition by subtraction”. By contrast, Madigan, Quinn, et al., in trying to sell a counterproductive tax hike to Illinois voters, are offering them “Subtraction by addition”.
Will they be able to pull it off? Fool enough voters again?
See me in November.
