In this article, Daniel J. Mitchell outlines my home state’s fiscal mess (and impending meltdown) nicely. Yet the supposed party of fiscal conservatism continues to lose election after election. Why? Because they don’t know how to fight the information war.
Here is Mitchell writing at the Foundation for Economic Education:
Simply stated, politicians and government employee unions have created an unholy alliance to extract as much money as possible from the state’s beleaguered private sector.
That’s not a surprise. Indeed, it’s easily explained by the “stationary bandit” theory of government.
But while the bandit of government may be stationary, the victims are not. At least not in a nation with 50 different states.
Politicians enacted Illinois’ 2011 income-tax hike during a late-night legislative session in January 2011 and raised the state’s personal income-tax rate to 5 percent from 3 percent. This 67 percent income-tax hike lasted for four years, during which time Illinois experienced record wealth flight.
…The short-term increase in tax revenue gained from higher tax rates is offset by the long-term loss of substantial portions of Illinois’ tax base. The average income of taxpayers leaving Illinois rose to $77,000 per year in 2014, according to new income migration data released by the IRS. Meanwhile, the average income of people entering Illinois was only $57,000.
…During the four years of the full income-tax hike, prior to its partial sunset in 2015, Illinois lost $14 billion in annual adjusted gross income, or AGI, to other states, on net.
Illinois has always had an unfavorable ratio when comparing the incomes of immigrants and emigrants. But you can see from this chart that there was a radically unfavorable shift after the tax hike.
Read more: FEE.org
Image credit: www.fee.org.