Is Illinois Smarter Than Arizona?by Art Jacobson on Jan. 18, 2011, under Politics, State Politics, Tax Policy
In an editorial published two days ago the NY Times reported and commented on the fact that Illinois has realized that simply cutting expenses won’t solve its disastrous budget shortfalls.
The Illinois legislature has taken a step that should have been as plain as the nose on your face. It raised taxes.
The action was immediately ridiculed by several governors around the nation who are still pretending that they can cut their way out of the enormous shortfalls they face, without raising taxes. Wisconsin and Indiana predicted a windfall of angry corporations and residents would head their way from Illinois. Even Gov. Chris Christie, the New Jersey Republican, vowed to fly to Illinois to invite businesses there to defect to his state.
The Times editorial argues that these consequences are not likely to happen, as Illinois’ taxes were low before, and even after modest raises of both personal and corporate income tax rates are low compared to other big states.
The Times editorial comments:
What businesses crave most is a stable environment in which to make profits, and Illinois was anything but stable. Businesses tend not to like it when health and education systems break down. …….Almost every state is in deep fiscal trouble this year, but only a few others have admitted that cutting spending will not be enough.
Whether our Republican dominated state legislature is smart enough to see the wisdom of the Illinois solution remains to be seen.
We’ll report, you’ll decide.