Clarice Feldman does a good job trying to explain what lefties don’t want to understand — when and why golden geese take wing. In her article, she has a long section on China, then California, and then turns to Illinois:
Illinois is, if anything, in worse shape than California:
Illinois’ high tax burden raises the benefits to be gained from moving relative to staying, resulting in an exodus of families toward states with lower tax rates and more economic opportunity. A consequence of these outflows of labor and capital is that state tax revenues suffer as the tax base shrinks. This negative effect on tax collections exacerbates Illinois’ fiscal crisis.
The problem in Illinois is that policymakers continue to introduce policies without taking into account the behavioral responses of individuals and businesses.
In increasingly interconnected markets, the effects of policies in one state can have implications for the rest of the world. Globalization, reductions in institutional barriers to international investment and trade agreements have contributed to increased levels of worker and capital mobility across the U.S. and countries with large differences in tax climate. In the last 20 years, 57 corporations left the U.S. for more tax-friendly jurisdictions, according to Bloomberg, taking with them jobs and billions of dollars.
According to the IRS migration data, Illinois’ income loss to foreign countries due to the movement of workers was $88 million from 2014-2015. However, Illinois lost a much larger share — $3.4 billion — to other states.
Tax policies like those of Illinois always have secondary effects on employment often overlooked by governments, analysts, and media:
The State of Illinois is losing jobs and suffering investment outflows because it has the highest tax rates in the country, while its debt levels are dangerously high, a consequence of decades of fiscally irresponsible left-wing policies favoring wealth redistribution over wealth generation. In recent months, Illinois saw a net capital outflow of almost $5 trln, while mass layoffs and businesses leaving the state put the regional economy at risk…
Read more: American Thinker
Image credit: Illinois News Network.