Illinois: How will we fix our budget problems? Let’s tax millionaires!

posted at 4:41 pm on March 21, 2014 by Bruce McQuain

This worked so well for France that Belgium had a real estate boom with the new tax on millionaires was announced.  And New Jersey learned that millionaires have a tendency to leave when confronted with higher taxes.  But Illinois?  Well, per Michael Madigan, Speaker of the Illinois House of Representatives, Illinois is different:

“Well, if they’re in Illinois today, they’re probably so much in love with Illinois that they’re not going to leave,” he said, according to the Tribune–a backhanded acknowledgement of how poorly the state is already doing.

Madigan may also be encouraged by California’s example, where millionaires have largely stayed put, even though Gov. Brown’s tax increase on those earning more than $250,000 has helped the state achieve the second-highest tax rate in the nation. However, Illinois does not enjoy California’s comfortable climate.

I think the comparison of Illinois to New Jersey is more apt than a comparison to California. Millionaires don’t have to travel far to find a lower tax state near Illinois as compared to California. And there’s certainly nothing particularly appealing about Illinois that would cause them to want to stay.

But this seems to be the Democratic answer to everything. Cut spending? Heck no. More efficient and smaller government. Yeah, no! Instead they are interested in balancing their profligacy and costly governanace on those who they believe have been the winners in “life’s lottery”.

The decision will be made by referrendum.  And as is noted in the cited article, the reason for this is as much political as fiscal:

The real goal of the proposed referendum may not be fiscal, but political. The winner of the Republican primary this week was billionaire Bruce Rauner, a political newcomer who enjoys close ties to Democrats such as Chicago mayor Rahm Emanuel, yet has vowed to take on the public sector unions and the Madigan machine.

The referendum is just one way in which Democrats will remind voters of Rauner’s immense wealth, in a repeat of President Barack Obama’s re-election strategy against Mitt Romney.

Indeed.  The party of jelousy and spite will use an emotional appeal to voters to pass the tax.  Again we’ll be treated to a campaign talking about greed and fairness.  Just review the attack pattern used by the Obama campaign and expect a repeat in Illinois.  Also remember it isn’t hard to convince others to pass a tax which has someone other than themselves paying it.

Of course, the bottom line is that without significant changes in the way the state government of Illinois governs (less spending and smaller, less intrusive government) this is a band-aid instead of a fix.  California will learn that at some point in the not to distant future.

~McQ


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

That will be difficult since they’ve driven all the rich people out.

crankyoldlady on March 21, 2014 at 4:43 PM

The winner of the Republican primary this week was billionaire Bruce Rauner, a political newcomer who enjoys close ties to Democrats such as Chicago mayor Rahm Emanuel,

Yep, he sounds like a blue state GOPer alright.

melle1228 on March 21, 2014 at 4:44 PM

Illinois sucks…I speak from experience, I live here…

PatriotRider on March 21, 2014 at 4:45 PM

Where have all the millionaires gone, big tax spending
Where have all the millionaires gone, long time ago?
Where have all the millionaires gone?
Liberals have picked them everyone.
Oh, when will they ever learn?
Oh, when will they ever learn?

BobMbx on March 21, 2014 at 4:47 PM

it hasn’t worked anywhere it’s been tried yet so what’s the risk?

DanMan on March 21, 2014 at 4:48 PM

Anyone with close ties to Rahm Emanuel is no conservative, that much is for certain. That’s the problem with the Republican party these days. They have very few conservatives and a butt load of ‘progressives’. Might just as well run the election with 2 democRATs and be done with it.

bimmcorp on March 21, 2014 at 4:49 PM

And New Jersey learned that millionaires have a tendency to leave when confronted with higher taxes.

And don’t forget Maryland. Tried to tax the millionairs and they up and left.

WisRich on March 21, 2014 at 4:50 PM

Illinois sucks…I speak from experience, I live here…

PatriotRider on March 21, 2014 at 4:45 PM

You gotta follow me or ALT.. She moved to Texas from Illinois, and I moved to Tennessee.

melle1228 on March 21, 2014 at 4:52 PM

Good thing there isn’t a fiscally sound state right door to Illinois, say, a MIndiana.

rbj on March 21, 2014 at 4:52 PM

Illinois sucks…I speak from experience, I live here…

PatriotRider on March 21, 2014 at 4:45 PM

Seconded. But I didn’t realize how much it sucks until I spent the last 6 yrs in a red state (and I don’t mean downstate IL).

mdenis39 on March 21, 2014 at 4:52 PM

Illinois Dems: Don’t vote for Bruce Rauner because HE HAS MORE MONEY THAN YOU!!!ZOMG!!1!!1ELEVENTY!1!

JimLennon on March 21, 2014 at 4:52 PM

Via the WSJ

Here’s a two-minute drill in soak-the-rich economics:

Maryland couldn’t balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O’Malley, a dedicated class warrior, declared that these richest 0.3% of filers were “willing and able to pay their fair share.” The Baltimore Sun predicted the rich would “grin and bear it.”

One year later, nobody’s grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller’s office concedes is a “substantial decline.” On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year — even at higher rates.

WisRich on March 21, 2014 at 4:53 PM

This just in: Indiana and Wisconsin have inexplicably doubled in numbers of millionaires.

Whitey Ford on March 21, 2014 at 4:53 PM

Not that far to Indiana from Chicago. South shore of Lake Michigan is very nice.

iurockhead on March 21, 2014 at 4:53 PM

Still won’t solve their pension problem.

Murphy9 on March 21, 2014 at 4:54 PM

Funny, I thought that the only millionaires left in Illinois were politicians and union heads.

joekenha on March 21, 2014 at 4:54 PM

Most wealthy people work in Chicago and NW Indiana is a 20 minute train ride away.

DJ Rick on March 21, 2014 at 4:55 PM

just remember politicians think differently than anyone else. when I live in Iowa it was near the border of Illinois, the Illinois side raised their sales tax to 7% one of the arguments against it was the Illinois residents would go to Iowa to buy things, wouldn’t you know it the Iowa side raised their sales tax to 7% also. right now you have states like Illinois, New Jersey, New York city and state and California are taxing Millionaires how long before others get the same idea, the story of the farmer killing the goose that lays the golden egg plays out all the time in politics.

RonK on March 21, 2014 at 5:01 PM

This just in: Indiana and Wisconsin have inexplicably doubled in numbers of millionaires.

Whitey Ford on March 21, 2014 at 4:53 PM

They won’t be moving to Wisconsin. Even with all the great reforms Walker has made and the massive tax increases IL has voted for, WI taxes are still higher than IL.

That just show’s you how bad WI spending was before Walker came into office.

We can only tax solice in the fact that WI is financially sound unlike IL. With the Dem’s in charge for so long, they made sure all those public pension funds were fully funded. Lucky us.

WisRich on March 21, 2014 at 5:05 PM

Yeah, good luck with that.

Meople on March 21, 2014 at 5:05 PM

Instead they are interested in balancing their profligacy and costly governanace on those who they believe have been the winners in “life’s lottery”.

Profligacy? Wow.

You blew my mind with that one Bruce. Keep up the good work!

Oxymoron on March 21, 2014 at 5:06 PM

Sadly I live in Illinois too. In a city that holds the title of the second worst economy in the United States.

iceman1960 on March 21, 2014 at 5:08 PM

Bruce Rauner ran against another GOPer in the primary that was funded to the tune of $1.2 million by the dems. It was an effort to get an Akin type in there so Quinn could keep his seat. This is Rauner’s first ever attempt to run and he had to run against the GOP and the dems. To think he is aligned with dems means you believe Chicago media.

DanMan on March 21, 2014 at 5:08 PM

What else can politicians do, short-term, to try and fix their financial woes (also often brought on by previous short-term actions)? If they did otherwise, they’d have to face unpleasant truths about the limits of how far government can go.

Russ808 on March 21, 2014 at 5:09 PM

I moved from DuPage County, west of Chicago, to Indiana in the 80′s. It was very amusing to me at first that Hoosiers knew nothing of 1.) taxes and 2.) traffic. Other than that, red state, fiscally sound; all is well.

Cottonpony on March 21, 2014 at 5:12 PM

So, -another state to add to the Rick Perry ‘Move to Texas’ tour!

slickwillie2001 on March 21, 2014 at 5:14 PM

“Well, if they’re in Illinois today, they’re probably so much in love with Illinois that they’re not going to leave,” he said, according to the Tribune–a backhanded acknowledgement of how poorly the state is already doing.

LOL – proof positive that liberalism *is*, in fact, a mental disease. They will *never* – CAN never – learn, and will destroy us all in their efforts to do that which has failed countless times historically, to the ruin of nations and destruction of millions of lives.

Holy f*ck.

Midas on March 21, 2014 at 5:15 PM

The phenomenal stupidity of politicians is boundless. Wealthy people can change the form and timing of the money they get, so that it is no longer classified as “income”. In fact you don’t have to be that wealthy if you do some independent contracting through your own corporation, you can pay a good number of expenses with pretax income then get taxed on only what is left.

Doc Holliday on March 21, 2014 at 5:19 PM

it hasn’t worked anywhere it’s been tried yet so what’s the risk?

DanMan on March 21, 2014 at 4:48 PM

But THEY will do it right, this time….

dentarthurdent on March 21, 2014 at 5:21 PM

Idiots,morons, I wonder if they’ve done the math. Will it make any difference or is it just more soak the rich crap.

jmtham156 on March 21, 2014 at 5:25 PM

“Well, if they’re in Illinois today, they’re probably so much in love with Illinois that they’re not going to leave

At least Michigan is on a peninsula- it takes effort to leave. Illinois has an awful lot of millionaires living close to another state.

Happy Nomad on March 21, 2014 at 5:25 PM

In fact, I would say that lot of the millionaires are still in these states–they have just changed the nature of their income to reduce the taxable portion. In other words, you don’t have to physically move to lower the tax burden, just rearrange how and when you get the money.

Doc Holliday on March 21, 2014 at 5:26 PM

It was very amusing to me at first that Hoosiers knew nothing of 1.) taxes and 2.) traffic. Other than that, red state, fiscally sound; all is well.

Cottonpony on March 21, 2014 at 5:12 PM

Wow, you make it sound like you would be viewed as a god should you flick your Bic lighter in front of those Hoosiers. ;0

Seriously, look at which states are doing well- not one of them is blue.

Happy Nomad on March 21, 2014 at 5:30 PM

Meh. If I were a millionaire I wouldn’t be living in any city. I’d be out there in the wild somewhere enjoying nature and rivers and lakes.

HiJack on March 21, 2014 at 5:34 PM

3m
Minnesota lawmakers approve income tax breaks, business tax repeals; Gov. Mark Dayton to sign soon – @AP
end of alert

Murphy9 on March 21, 2014 at 5:36 PM

Meh. If I were a millionaire I wouldn’t be living in any city. I’d be out there in the wild somewhere enjoying nature and rivers and lakes.

HiJack on March 21, 2014 at 5:34 PM

Like the unibomber? He didn’t need millions for that lifestyle.

Happy Nomad on March 21, 2014 at 5:46 PM

I’m a resident of Illinois. Between the state and the city of Chicago doomsday is rapidly approaching. I have no faith that enough political will to avoid the crash can ever be summoned. My son graduates from high school this year, and my wife is an elementary school teacher with four more years to go. Once that happens, I guarantee you we’re out of this state. I don’t want to be around when the big “kabloooie” happens.

Fafhrd on March 21, 2014 at 5:48 PM

While not quite among the ‘filthy millionaires’ now or then, I moved from the Chicago subs to AZ awhile after Dear Leader was first anointed–sorry, elected.
My property taxes declined well over $15,000. State hit: well, not much less, but that was before the 67% ‘correction’ by Pat Quinn. Commute: from 45 minutes down to 14. And no more tollway hits at 0.40—wait, 0.80, —oops, now $1.60 a crack. Both ways.

Hey, disaffected Illinois millionaires: Two homes in my area at around $800 and $850k. 4BR, 4-5BA; pool, multiple garages, and palm trees. Property taxes under $5000 a year; heating bills: WHAT heating bills? And they’re in the best solar region in the United States.
With mountains on the horizon 8 miles, and 40 miles to the East and West.
Oh, and it’s in the high 70′s today; it’s been a bit cool, this year. Has the most recent snow melted, yet?

Just saying. No pressure. We’ll leave the city gates open.
Just don’t bring any progressives or other parasitic organisms along with you.

orangemtl on March 21, 2014 at 5:50 PM

Eat the rich

Socratease on March 21, 2014 at 6:13 PM

Millionaires don’t have to travel far to find a lower tax state near Illinois as compared to California.

[searches for Nevada on map - not surprised to learn it hasn't moved]

corona79 on March 21, 2014 at 6:22 PM

Illinois sucks…I speak from experience, I live here…

PatriotRider on March 21, 2014 at 4:45 PM

Ditto and yes it SUCKS.

lpd_1 on March 21, 2014 at 6:34 PM

I moved from Chicago to Idaho six months ago. The only things I miss are my local yoga studio and a certain sushi restaurant.

#notamillionaire

Lance Corvette on March 21, 2014 at 6:42 PM

…dumb dumb…dumb!

KOOLAID2 on March 21, 2014 at 8:15 PM

What’s the over/under on they’ve already spent all the revenue that they’re projecting to get from this tax?

Left Coast Right Mind on March 21, 2014 at 8:48 PM

If I didn’t still have my parents I would probably be gone in a heartbeat. But, I just love where I live – the climate, the land, the people. And I’ve been here all my life, and most of my relatives have been in IL for generations. But this state’s government (ie Chicago) is ruining everything else.

If there isn’t a change in this next election I am going to seriously consider leaving.

Hendo on March 21, 2014 at 11:27 PM

So, -another state to add to the Rick Perry ‘Move to Texas’ tour!

slickwillie2001 on March 21, 2014 at 5:14 PM

Texas wants more rich people. No state income tax at all.

trigon on March 22, 2014 at 12:49 AM

Texas wants more rich people. No state income tax at all.

trigon on March 22, 2014 at 12:49 AM

Yup. We have a great climate, no state income tax, lots of space and a low cost of living. We also have a low regulatory climate for doing business. We would love all of the millionaires who wish to move out of Illinois to come here to Texas. :)

Theophile on March 22, 2014 at 2:03 AM

Not that far to Indiana from Chicago. South shore of Lake Michigan is very nice.

iurockhead on March 21, 2014 at 4:53 PM

Agree there as long as you get past Gary. I helped move a house in Ogden Dunes and that was great. We talked about how East Gary had changed its name to Lake Station after Gary Mayor Hatcher drove half the population out of the city by removing police protection from the business community. Then to keep people from selling their homes, Hatcher put in building codes that were too expensive to upgrade to in order to sell your home so people just abandoned them instead. The population went from 200,000 in Gary to 100,000. (Mayor Hatcher threatened to rename Gary West Lake Station.)

KW64 on March 22, 2014 at 11:16 AM

This will not pass – it is merely a political ploy to point out the the now R nominee is wealthy, very wealthy, and will be on the defensive. Instead of the lousy state economy, pension crises, and cultural decay, the R party, as a result of voting for Rauner to be their standard bearer, will be defending the wealthy.

Sheerq on March 22, 2014 at 11:22 AM

If there isn’t a change in this next election I am going to seriously consider leaving.

Hendo on March 21, 2014 at 11:27 PM

The best thing about Illinois is the farmland. Tough to move that. Central Illinois has deep black loam. 200+ bushel an acre corn crops frequently and well over 60 bushel per acre soybeans. I hope they do not kill the farming community there like they did the central valley in California where they turned it into a desert to get rid of the people who voted for the GOP.

KW64 on March 22, 2014 at 11:26 AM

still waiting for Cat to leave … that will be epic ….

conservative tarheel on March 22, 2014 at 1:33 PM

Just don’t move to Austin. We are full…4th worst traffic congestion in the country.

Hat Trick on March 22, 2014 at 10:05 PM