More evidence that excessive state government taxing and spending kills jobs

The Democratic Party’s nominee — Illinois Governor Pat Quinn — wants to raise your taxes. A lot of state employees also want your taxes raised. A bunch of them gathered in Springfield last week to chant – I didn’t see any of the video but I’m assuming it was like a real life Saturday Night Live skit. The Chicago-based news satire website The Onion made fun of them.

The tax experts tell us that the income tax is among the worst taxes a state government can raise if they hope to keep jobs from moving to a state with a better rate. The following information was compiled by the Center for Policy Analysis:

More Evidence that State Taxes Influence Mobility, Job Creation

The Christian Science Monitor reported on the correlation between taxes and mobility.  It found that seven of eight states with the biggest population outflows have high state taxes. States without income taxes tend to do better…

If you live in a high-tax state and are thinking about that moving-van idea, remember to think about not just current tax rates but potential future ones as well. States in “fiscal peril” from unmet budget obligations may have to raise taxes, says the Monitor.

In today’s Sun-Times reporter Dave McKinney writes about the Civic Federation’s Laurence Msall’s take on Quinn’s budget proposal:

“It’s just not fiscally sustainable, and it doesn’t make the situation better.”

McKinney does report some good news:

“A key component of Quinn’s plan — increasing the individual income tax from 3 percent to 4 percent to fund education — has been mired in Springfield, where lawmakers don’t want to wear the collar for an election-year tax increase when many Illinois families are struggling with the recession.”

State government needs revenue. Many Illinoisans need a job. And the recession has hit both family and business bottom lines. The solution to all of those problems is obvious — we need more economic activity — more businesses and jobs created. More tax revenues will be produced as a result.

It’s not complicated. You don’t increase economic activity by increasing taxes. Fortunately, think tanks like the Chicago based Heartland Institute and organizations like the Illinois Alliance for Growth are great places to find out what’s worked in other states. God willing, our political leaders will someday pay more attention to these resources.

While Michael Barone’s column today was on the topic of a national Value Added Tax, his comment is apt — and applies perfectly to the debate over state and local taxes too:

Hold the VAT — Taxpayers May Prefer Spending Cuts

The assumption in some quarters is that a tax increase is inevitable and that the public won’t allow any significant decrease in public spending. But there’s reason to question that assumption.

What’s happening in states like Virginia and New Jersey — and what happened not so long ago in Canada, Sweden and Finland — suggests that voters may support spending cuts more than most American politicians and pundits have assumed.

Here’s one way to sum it up — if a person is chanting “raise taxes,” their aim is often getting some of those tax revenues into their own pocket. Fortunately, more of our Republican elected officials are realizing that taxpayers prefer spending cuts.

The other candidate for governor, Bill Brady, weighs in here:

Civic Federation report should be final nail for Quinn tax increase

©2010 John Francis Biver