The economists want a 50 percent increase in the income tax and a new tax on services. Combined, the tax hikes would bring in $11 billion a year…
Four years ago during the last Republican gubernatorial primary, dairy magnate Jim Oberweis was sharply and widely criticized for running false newspaper headlines in his TV ads. Now, it’s happening again with a different wealthy gubernatorial hopeful.
Republican Andy McKenna’s latest TV ad stays with his original theme of former Gov. Rod Blagojevich’s hair.
The spot begins the same as his first ad, with a visual of a Blagojevich-like wig on top of the Statehouse and a Blagojevich look-alike walking into the shot. McKenna’s first TV ad placed the wig on several previous governors, including George Ryan and Dan Walker, as well as on a baby. The hair is supposed to be a metaphor for the state’s history of corruption.
The McKenna ad’s announcer then claims the state faces an $11 billion deficit while “Governor Quinn hides the truth.” The accompanying visual is the phrase: “Quinn hides the truth” and a reference to a Nov. 18 Chicago Tribune article.
Trouble is, the Tribune published no such article with that headline. The article itself is about a contentious public debate between Gov. Pat Quinn and his Democratic primary rival Dan Hynes, but nowhere in the article does Hynes accuse Quinn of “hiding” anything.
The McKenna campaign claims the reference is to the governor’s statement that day that his administration has had many “missions accomplished” during his first year in office. The Tribune reporters questioned the political smarts of parroting one of former President George W. Bush’s more infamous quotes, but the McKenna people say Quinn’s line “hides the truth” about what’s really happening in Illinois.
Obviously, that’s more than a little bit of a stretch.
It’s not like Quinn has hidden the grim realities about the state’s crippling budget deficit or the need for a tax hike. Considering that most Illinois politicians want to sweep this budget and tax problem under the rug until after the election, Quinn’s been downright honest about the whole thing.
If anything, it’s people such as McKenna who are “hiding the truth.” McKenna and the rest of the Republican candidates know full well that there’s no way to balance the state budget with cuts alone. The deficit is almost half of the budget, for crying out loud.
Here’s the “truth:” Most of the budget is education and health care. So, unless you want to cut most of the $8 billion in state kindergarten to grade 12 spending (which would just necessitate insanely high local property taxes) and kick tens and tens of thousands of children and poor people off of Medicaid, dump the mentally ill into the streets and then quit doing the other things that the state does, like patrol the highways, you can forget about balancing the budget.
Yet to hear McKenna and the other GOP candidates talk, all that’s really required is a nip here and a tuck there. Ridiculous.
Anyway, back to McKenna’s TV ad. You’d think he’d be more cautious about making up headlines, but he’s using an out-of-state media consultant who probably doesn’t know about the 2006 Oberweis fake headline blowup.
A Washington Post columnist claimed last week that McKenna’s “hair” ads are the best he’s seen this year, but the ads have yet to move McKenna past his rivals - probably because while they’re visually striking, it’s tough for most viewers to remember that the ads are for candidate McKenna. The spots have attracted plenty of media attention, however, and probably have been the subject of quite a few water cooler discussions.
McKenna is likely to stick with this “hair” visual throughout the primary, so people eventually may associate his name with the hair spot, although that may not work all that well, either.
McKenna, for one, has a nice head of hair himself. And associating such a strong negative image so closely with a candidate could be dangerous. McKenna could become the “hair guy,” and because “the hair” is portrayed as such a strong negative, that’s a risky proposition with low-information voters.
It’s also unclear how this negative ad will fare as we move into the holiday advertising season. Usually candidates try to avoid negativity starting about Thanksgiving because viewers easily can be turned off by a negative tone during the holiday season.
False and counterproductive. But, other than that, it’s a good ad.
- VanillaMan - Monday, Nov 30, 09 @ 9:06 am:
Yeah - ten years ago would have been a better time to raise taxes, but ten years ago no one would have imagined state expenses increasing so astronomically. Had they raised taxes then, why would anyone really believe we wouldn’t be in this spot now?
California, New Jersey and Illinois all increased state spending beyond population growth and beyond the rate of inflation. By bucketfulls! I believe that if taxes were raised a decade ago, like California and New Jersey, Illinois would be in a similar spot financially that it is now.
If we give this government a dollar, it will spend one hundred dollars. The incovenient economic truth presented to us decades ago by Dr. Milton Friedman is more valid than ever - “I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government.”
A tax increase without witnessing governmental or political reform is politically unacceptable. This has been another ugly truth that liberals running Illinois do not wish to acknowledge. Instead they do the “pity parade”, “the shame game”, the “they’re richer than we are” jealousy plays, while all the while hoping that voters will re-elect them and keep the spend-happy status quo in power.
NO more.
- Ghost - Monday, Nov 30, 09 @ 9:10 am:
Of course by the time Ill gets around to raising taxes that 50% may not be enough to fill a 16-22 billion dollar hole.
The situation is not improved by delay, and the shortfall incurres penalties.
What is unfrotunate to me is the GOP pandering about taxes. The GOP keeps repeating the inaccurate mantra that higher taxes means fewer business’s.
Here is a wake up call for the GOP, IL has many many small buisnesses that are closing their doors. Why? becuase the State is not paying them for various good and services. The communties where those buissnesses operate are closing other stores, since the local small Businesses paid by the State are not longer using their services, and no longer have employees spending money in the community etc etc.
That 12 billion hole represents billions of money the tate injects/spends into the economy. We are not losing business by raising taxes to support the State payibng its bills to these may enterprises, we are losing business by draining our economically tight community of billions in spending.
From dcotors offices, to office supplies, to services which investigate and protect children and all across the State.
We are decimating our small business community by arguing to stanrgle our state economy and remove 12 dollars in paper clip bills from the State budget.
Those billions grease the ecoomy of the engine of Il, and its time to get that economy going.
- Segatari - Monday, Nov 30, 09 @ 9:12 am:
Raising the income tax to 4.5 won’t wipe out the deficit. It would only cover one third of it. And that’s assuming people don’t change their behavior because of the increase.
- Rich Miller - Monday, Nov 30, 09 @ 9:12 am:
—all increased state spending beyond population growth and beyond the rate of inflation.—
Check this out, from CTBA…
=== According to the most recent data available from the Bureau of Economic Analysis (May 27, 2009), in 2007, General Fund spending in the State of Illinois accounted for just 3.4 percent of the Illinois state GDP. That ranked Illinois 45th in the nation in spending, despite having the fifth largest population.
According to the same BEA data, ten years earlier in 1997, Illinois General Fund spending accounted for 3.35 percent of the Illinois GDP. ===
- Anonymous - Monday, Nov 30, 09 @ 9:15 am:
==I believe that if taxes were raised a decade ago, like California and New Jersey, Illinois would be in a similar spot financially that it is now.==
Cite your source, VMan. Rabble-rousing may be a fun pastime for you, but it’s no substitute for a true policy debate. Supply a viable alternative to raising taxes, or move on. Please.
- Small Town Liberal - Monday, Nov 30, 09 @ 9:15 am:
VMan - Last time I checked none of the GOP candidates were running on a tax increase with “governmental or political reform” platform, they’re running on a no tax increase platform. Rich is pointing out the “ugly truth” that the right wingers in Illinois don’t wish to acknowledge that we can’t fix the deficit with spending cuts alone.
- Sewanee - Monday, Nov 30, 09 @ 9:17 am:
“The GOP keeps repeating the inaccurate mantra that higher taxes means fewer business’s.”
Come on, while it may be inaccurate to say that all tax increases will result in business closures, it certainly holds true that a profit-driven business will locate in a more favorable environment. A tax increase here, a fee increase there and suddenly Indiana and Wisconsin offer an incentive package that makes relocation look like a no-brainer.
Maybe we can increase taxes and fees and keep our current business community, but don’t we want to grow? Don’t we want to reclaim some of the businesses whose closure or relocation has forced unemployment higher?
So maybe this tax increase won’t automatically result in loss of business–but it certainly won’t help Illinois in the competitive national market.
- Action Jackson - Monday, Nov 30, 09 @ 9:19 am:
Where does the “Institute of Government and Public Affairs” at the University of Illinois get its funding?
Just sayin’
- Anon - Monday, Nov 30, 09 @ 9:24 am:
==—all increased state spending beyond population growth and beyond the rate of inflation.—
Check this out, from CTBA…==
If Illinois’ economy grew faster than population growth plus inflation, there is nothing inconsistent between the CTBA report and Vanillaman’s statement.
- OneMan - Monday, Nov 30, 09 @ 9:30 am:
Much like to took Nixon to go to China, it will likely take a Republican Governor to make this happen.
Still I hope some Dems wear the jacket for helping us get to this point.
- cassandra - Monday, Nov 30, 09 @ 9:36 am:
I think raising taxes on services is a great idea but it never seems to get any traction in the legislature. The combination of angry providers and angry consumers seems to kill off this option every time it comes up. Providers contribute to legislators, I suppose. It always comes back to those campaign chests.
So, who should pay? According to our Pat, the middle class. Despite the widening chasm between the wealthy and everybody else, including the middle class, in this country, our Pat wants to leave the rich alone.
I don’t think there will be a crisis this year
because I think the WH will do another rescue package for states and localities, what with the
election coming up and all. I’d hate to have that happen on top of an income tax increase. A fuller than expected trough only benefits legislators and state bureaucrats. Happy pay raises and more relatives on the state payroll and overpriced contracts.
It might be easier for our Pat to hit up the middle class for his additional billions, but I think we should make him work for his government paycheck. Put together a package of progressive income tax increases and services taxes and we’ll take a look. Sell it to the General Assembly. Stop trying to take the easy way out. Goodness, this man is lazy.
- shore - Monday, Nov 30, 09 @ 9:41 am:
The most frustrating thing is the lack of agenda from any republican candidate-probably why 2/3 of republicans told this mornings washington post poll we hate our leaders. Next time I see Mr. McKenna at hackneys I will remind him that when you are governor you actually have to do things. I expect him to be destroyed in debates.
wls posted the hynes-quinn debate and listening to hynes explanation on teachers benefits made me want to do something unpleasant. the guy is a total zero on fiscal responsibility and seems to think that in these tough times government should write blank checks to unions.
- Plutocrat03 - Monday, Nov 30, 09 @ 10:13 am:
If consideration is given to tax services, that will be highly regressive. Medical services represent a large portion of the costs of daily life for regular citizens. A tax increase there will also lead to a spike in health insurance costs for all.
It is also a mistake to ignore the potential revenue from taxing governmental pensions. Currently Illinois does not tax state and local government deferred compensation plans;a government retirement or government disability plans, Put a floor on it and tax the rest.
- The Doc - Monday, Nov 30, 09 @ 10:25 am:
==If consideration is given to tax services, that will be highly regressive.==
I disagree with this statement generally, although I suppose it depends on what services would be included as eligible. Certainly, exemptions would be carved in for certain services, or not considered taxable altogether, and I would think health care services would be at or near the top of such a list.
- DuPage Dan - Monday, Nov 30, 09 @ 10:44 am:
VM is right - if Illinois does not change the way business is done the problem will continue. I believe a tax increase is inevitable but should be done along with strenuous reforms in the way the state does business. No unfunded mandates. There will always be graft and corruption in any gov’t activity but this must be limited by an open gov’t that posts spending online within days of spending along with election reform that requires all donations to be publicly posted within days of the donation.
No new spending until the house is in order. It will be a tough time but it is necessary to regain the public trust. I would not be in favor of a tax increase unless there is a clear path to the resolution of the back log of bills and the structural problems that continue to ruin the financial stability of the state.
Then, and only then, can the state begin the think about new spending. I believe that any spending increase must come with clear, transparent, proof of funding stream. There are other ideas out there - I am not an expert in this area by any means.
Voters should not accept BAU!
- wordslinger - Monday, Nov 30, 09 @ 11:20 am:
McKenna’s justification for the “Quinn Hides the Truth” citation is ludicrous. If you can say anything at all, why not go all in and say something really unjustifiable?
- VanillaMan - Monday, Nov 30, 09 @ 11:58 am:
VMan - Last time I checked none of the GOP candidates were running on a tax increase with “governmental or political reform” platform, they’re running on a no tax increase platform. Rich is pointing out the “ugly truth” that the right wingers in Illinois don’t wish to acknowledge that we can’t fix the deficit with spending cuts alone.
I frankly don’t care what the GOP is saying. I only care which candidate is going to clean up the mess we’re in before throwing more of our money into this black hole in the ocean.
I’ve never waivered. Not another dime until we see some political or governmental action that tells us that Springfield and Chicago has changed their ways. Any money going to the status quo is going to be wasted.
Shut your wallets until they take action. I don’t care which party says what.
- LisleMike - Monday, Nov 30, 09 @ 12:15 pm:
Unlike the Federal Governemnt, the State of Illinois does not print money. That means it is a finite resource. Yes, the Republicans are constantly on the anti-tax theme. With a finite resource (money)taxes take away from needed resources for business. (Inventory, Labor, R&D and overhead)Since there is no plan to stop spending in Sfld, the Republicans wanted to cut it off at the source, (spending) but the legislature in confusing wisdom, decided to keep spending. This is the shame in our governmental processes.(Don’t beleive it, they are willing to force similar ideology through unfunded mandates to other taxing bodies through out the state!)
Sorry Ghost, if it bothers you that Republicans keep harping on taxes and loss of business, it is because it makes sense!
- steve schnorf - Monday, Nov 30, 09 @ 12:23 pm:
Two things:
One, the state budget can not possibly be balanced without a significant revenue increase in addition to spending cuts
Two, I’ll put my hair up against anyone’s’.
- Rich Miller - Monday, Nov 30, 09 @ 12:25 pm:
Steve, you have enough hair for ten men your age. Maybe 20. lol
- Loop Lady - Monday, Nov 30, 09 @ 12:41 pm:
I love how irritatingly consistent Cassandra is that IL’s budget problems are all Pat Quinn’s fault after being Governor for less than a year…It is also good to know how much PQ despises the middle class. I guess he’s part of the conspiracy to wipe out the middle class along with former President Bush and Veep Cheney…get real woman, IL doesn’t have a much of a manufacturing base anymore and taxes on services is a tough sell…raising taxes in an equitable manner may be the only way out of this financial quagmire…
- Anonymous - Monday, Nov 30, 09 @ 12:54 pm:
VM,
A lot of us knew we had budget problems ten years ago, but no one could forsee the events of 9/11/2001 after which we had a sharp contraction of state revenues. In 2005 and 2006 many states had some boon years, but Illinois was still reeling from the earlier downturn and we didn’t see much job growth during those years. Then the great recession of 2008 and 2009 sent revenues into free-fall. Bottom line…many saw the structural budget problems, but virtually no one saw the events that exacerbated the structural issues.
Interestingly enough, Rod Blagojevich and his crew were the ones who proposed the $8 plus billion gross receipts tax, which compares in scale to the University of Illinois proposal.
- concerned citizen - Monday, Nov 30, 09 @ 12:56 pm:
It’s time to tax the rich (those who can most afford to pay) and close corp tax loopholes (big businesses paying no IL taxes).
IL has a 3% flat tax, regressive, and is about 40 years obsolete. Most states have progressive taxes, with higher rates for higher brackets (9-11% in other states).
This is where “all the money is.”
- concerned citizen - Monday, Nov 30, 09 @ 1:00 pm:
By the way, it’s so bad that IL is literally $4 Billion + behind on paying its bills. Medical providers and others (IL Universities) waiting since JULY 2009 for ANY state funds owed them.
- John Bambenek - Monday, Nov 30, 09 @ 1:14 pm:
No one is going to support a tax increased based on at least a decade of irresponsible spending. Isn’t going to happen. If by political reform you mean a tax increase that is tied to every single politician being banned from holding office, participating in a political party, working on a political campaign or donating political cash for life, then it’s all a joke.
We have a balanced budget requirement in our constitution. They’ve ignored it every year since 2000. What did you think was going to happen? You could have done the cuts then. Heck, we could have done the cuts this year. Instead we BUILT IN at LEAST 6-7B in deficit for next years budget by kicking the can.
Make the case to the voters why we should choke down a tax increase and give more money to Springfield when they’ve been so piss-poor at handling it so far? What can you do to assure us we won’t be at the same place 5-10 years from now?
And businesses can relocate between states. Why do business here when you can go to Indiana, Wisconsin, Iowa, etc?
- cassandra - Monday, Nov 30, 09 @ 1:19 pm:
I didn’t say the problem is Quinn’s fault. But how productive is it to keep weeping and wailing about past sins-both Democratic (recently) and Republican (for decades prior). The problem with Quinn is that he only has one solution for fixing it. Raise taxes on middle class families. The same families, I would note for you liberals, that the President is trying to protect.
The middle class can’t afford a tax increase right now. The upper income folks, the ones who profited greatly from the Bush years, can.
And given the way our economy is developing in the 21st century, if we can’t tax services, we’re sunk.
- David Jenkins - Monday, Nov 30, 09 @ 1:30 pm:
Why can’t we just cut back pensions? That’s the easiest solution. The top 100 pensions are posted on the NTUI.org website, and many of them are aggregious.
If private companies can declare bankruptcy and slash any pension over $4,000 to $5,000 a month; then why can’t we do the same in government? No one’s going to go homeless on $4,000 a month, and the taxpayers are taken off the hook for a mess that they didn’t create.
- Rich Miller - Monday, Nov 30, 09 @ 1:33 pm:
Mr. Jenkins, you’re advocating that Illinois declare bankruptcy? It’s actually not possible. There’s a link to that on this site.
Also, you assume taxpayers in Illinois live in a dictatorship. They just voted overwhelmingly to keep the constitution we have in place, which specifically protects gvt pensions.
- Will County Woman - Monday, Nov 30, 09 @ 1:43 pm:
“It’s not like Quinn has hidden the grim realities about the state’s crippling budget deficit or the need for a tax hike. Considering that most Illinois politicians want to sweep this budget and tax problem under the rug until after the election, Quinn’s been downright honest about the whole thing.”—Rich Miller
tom cross addressed this on fox 32. he in effect said that [back in the summer when quinn was pushing for the 50 percent tax increase] quinn was forthright about the grim fiscal picture in illinois. but, since the rasmussen poll released in mid-late august showed that quinn would be DOA on Feb 2nd if he persisted in pushing his 50 percent tax hike, quinn become somewhat mum about the state’s fiscal crisis, current and projected. as per cross, quinn leans heavily on the “things are better now than they were a year ago” line. according to cross, in doing so quinn has become increasingly less than candid with the people of illinois about where we are now, and the problems that lay ahead next year.
cross has an interesting take on things?
- cermak_rd - Monday, Nov 30, 09 @ 1:43 pm:
Yes. Illinois voters just overwhelmingly re-approved our Constitution which both protects government pensions and provides for a flat income tax.
So, a graduated income tax is off the table as is reducing/eliminating pensions.
This report makes clear that even if we went draconian and eliminated all non-mandated spending, we’d still be in a pickle. I suppose we could reduce medicaid eligibility, but is it really feasible in a time when people are looking at the poor and thinking there but for the luck of the draw go I?
How about eliminating corporate income taxes and just taxing personal income? That might draw some business from Indiana and keep others who are thinking of leaving. At this point in time, I’m more interested in keeping/getting jobs than I am fairness or equity.
- Will County Woman - Monday, Nov 30, 09 @ 2:00 pm:
@ Loop Lady - Monday, Nov 30, 09 @ 12:41 pm:
yes, but loop lady will you concede that Quinn should have and needs to cut operational expenses wherever feasible? shouldn’t the rubber meet the road by him cutting/scaling back a significant portion of his administration? even if only in the interim because he is serving in the interm, it would have sent a strong signal to voters about his leadership. he really did miss an opportunity by not doing so. his opponents in the general will surely use all of this against him, and rightfully so.
how much longer are you going to stick with the “he inherited a mess” line? sweetie, for all intents and purposes he’s a year in and he opted to go for the third rail in politics as his first and only line of defense this year. he went about it in the wrong way, i might add.
he likes to tout that he is governor, governing and leading, so he (you) can ill-afford to blame blago for the state’s budget woes fy 10 and fy 11. blago was yesterday’s tomato as governor, as governor quinn likes to say.
how many people have been hired by the quinn administration at the exec. level since the stop gap budget was passed? how about since he gave a grim budget address on march 19th? were all of these new hires and/or their posts vital to day-to-day state operations? could not they have been left vacant in the interim? (think: caroyln adams’ appointment to the s.a. trade liaison post @110k plus generous living stipend. and, despite her withdrawl from the position, the quinn’s administration’s admitted on record intention, as per bob reed, to fill the post nevertheless)
- David Jenkins - Monday, Nov 30, 09 @ 2:11 pm:
Rich,
It appears you’re decidedly “pro-tax”; then you sum up an entire point-of-view in terms of a Con-Con refusal by voters and a one-sided Constitutional argument? There are many tools, some legislative and some administrative, that could reduce government pensions. However, bankruptcy is the mathematical result of insolvency, Constitutional or not. But I never said that bankruptcy had to occur to cut pensions; only implied it.
Getting the legislature to pass a tax increase in an election year is another hurdle I doubt you’ll be able to overcome. So, like it or not, something has to give. And you shouldn’t be so quick to take my idea off the table. It’s systemically unfair that pensions are not only drawn, but increased by at least inflation each year for people who often earn more in retirement than they did while they were working. Then when you consider the earlier retirement age and “double-dipping”; there doesn’t need to be a Con-Con or a bankruptcy. Just a market adjustment; which given the terms in Committee, could be entirely Constitutional.
Cordially,
David
- Rich Miller - Monday, Nov 30, 09 @ 2:16 pm:
Dude, you have a website that calls legislators “socialists” because they voted to phase out the 7 percent cap. I’m really not all that interested in debating you.
Perhaps you should trade your property taxes with my downstate property taxes. Hint: You don’t want to do that.
- Loop Lady - Monday, Nov 30, 09 @ 2:36 pm:
@WCW and Cassandra: Tiresome stuff…if you would like to see efficiencies that Quinn has accomplished since he was Lt. Governor, check out
his website for the Green Government Coordinating Council…Utility, travel expenses, and fuel use has dropped dramatically (by over 50%) at many agencies…it is very obvious that you and Cassie work outside government and don’t have a clue…your ramblings and finger wagging are amusing to you two I guess…
- VanillaMan - Monday, Nov 30, 09 @ 2:39 pm:
A lot of us knew we had budget problems ten years ago, but no one could forsee the events of 9/11/2001 after which we had a sharp contraction of state revenues. In 2005 and 2006 many states had some boon years, but Illinois was still reeling from the earlier downturn and we didn’t see much job growth during those years. Then the great recession of 2008 and 2009 sent revenues into free-fall. Bottom line…many saw the structural budget problems, but virtually no one saw the events that exacerbated the structural issues.
I agree. So, if no one can foresee the future, why does Illinois have a financial situation that banked on glory days that never happened, and will definately not happen now? Who is claiming that our economic future will bail us out of their rotten fiscal policies and structural deficits? At what point does common sense prevail here? The last economic boom that passed us by, isn’t the first economic boom to go bust in Illinois. Does any of the supposed geniuses see some kind of pattern? How long do the people calling the shots regarding our state’s short and long-term fiscal health, get to screw up? How many chances do the people under the Dome get before we see a more conservative approach, you know, conserve something like your cash?
I call what we have gone through as our “Lost Decade”. Illinois can’t afford the status quo passing for government today. We can’t afford the status quo that passes for politics, can we? How many more state leaders are we willing to elect, and then later, imprison?
Worse, why can’t we expect the political institutions to do something different in the face of their massive failures?
Pay more? For this? Everyone over the age of 21 knows that boom times do not last. So what exactly is lacking in the minds of our state leadership when they do nothing for the past ten years?
Their inactions, their delusions, and their pandering is telling us that they are out of solutions. They want us to bail them out, or suffer the economic consequences they have been ignoring since 2000. It took an arrest to even get these people to move on Rod Blagojevich.
The status quo has to go. They have run out of excuses for the craptastic situation they have put us into. Ten years of freakin’ fingerpointing. Now they want to blame us because we are asking questions about them raising our taxes?
Our current government has to go so that voters will grant a new administration and a new state leadership the time and grace needed to do what it takes. Our current government is so swathed in corruption, so tainted by voter frustration, they could actually come up with a real honest resolution to our troubles, but still lack the credibility to overcome the voter anger to sell it.
For everyone’s sake, these people need to be voted out of government, regardless of political party.
- Will County Woman - Monday, Nov 30, 09 @ 2:47 pm:
thank you for not answering my actual questions, loop lady. take care.
- Bill - Monday, Nov 30, 09 @ 2:50 pm:
==Why do business here when you can go to Indiana, Wisconsin, Iowa, etc?==
Because you will pay higher taxes in those states.
- Ghost - Monday, Nov 30, 09 @ 2:51 pm:
=== it certainly holds true that a profit-driven business will locate in a more favorable environment. ====
This is true if by faovrable you mean where there is demand and money for a product and services and no supply, a buisness will fill the void. alal supply and demand. Think of Sam Walton. he built large retail stores where none exsited becuasehe wanted to tap into the demand he thought was being unedressed by other companies. he was not building them around tax incentvies, but around places he sough to capture sales.
===A tax increase here, a fee increase there and suddenly Indiana and Wisconsin offer an incentive package that makes relocation look like a no-brainer.===
But we already have states with no income tax. So how is it then we continue to have buisness in Illinois? shouldnt they all be gone? Seems like you would have way to much supply for the demand if you locate only around low tax areas. Also a business does not usually consume its profit to pay taxes, it passes the taxes off to the consumer in the costs of goods it sells.
So yes fundamentally the mantra that business will flee IL for lower tax states is wrong, and goes against the general pricinciples of uspply side economics.
Same with services. if i want to provide a service, say plumbing, I will open a store where people have need ofa plumber, not one where the taxes are slow low there is a plumber per household.
- Rich Miller - Monday, Nov 30, 09 @ 2:51 pm:
lol. True enough.
- David Jenkins - Monday, Nov 30, 09 @ 2:56 pm:
Gambling, for example, is a great way, in my opinion, to subsidize that (no income taxes). And the best part is that it’s all voluntary.
However, there are a group of hypocritics, the same group that exclaims “less government and lower taxes”, that object to gambling on moral principles. Apparently that’s one thing they want the government to step-in and intervene for.
- Loop Lady - Monday, Nov 30, 09 @ 2:58 pm:
WCW: I did answer your question…I guess you just didn’t like my response because it might take some actual fact finding on your part, instead of conjecture…you’re welcome!
- VanillaMan - Monday, Nov 30, 09 @ 3:34 pm:
I will open a store where people have need ofa plumber.
Not quite. You will open a store where people have a need of a plumber - and where you could do so at a profit. You will not perform your services because people have clogged toilets. You will not be doing it because you feel a calling. You have to get enough money from your work to make it worthwhile.
That is where lower taxes make a difference. If Illinois is forcing more regulations and costs to offset what you put into your work - you will not do that work. If Illinois forces you to provide specific wages and benefits, you will need to reconsider hiring others to assist you. If Illinois mandates enough from you - you will close your plumbing business, and find a job at Lowes.
You may not move - but you have to consider the costs, right? The fact that you may not move, does not lessen the impact lower taxes have on small businesses, especially those that are located close to state lines. Southern Cook County communities shop in Indiana. They buy gas there. They buy tobacco there. They purchase services there. I know because that is what I did to save money. I know because that is what we all did. Illinois businesses dried up. I witnessed it.
- cassandra - Monday, Nov 30, 09 @ 3:57 pm:
It’s nice that Quinn is possibly saving a few bucks here and there but, LL, that’ not my point, as you know if you are reading my posts.
- wordslinger - Monday, Nov 30, 09 @ 4:29 pm:
The gas on this subject is unbelievable. When you can’t deal with reality, lurch into the abstract.
I think one reality everyone can agree on is that you don’t stiff your contractors for months on end. That’s bad business for everyone.
So, since the State of Illinois can’t go out of business, can everyone agree that we bite the bullet and take some extraordinary measures to get square with the people we owe? It’s the only decent thing to do.
- Sewanee - Monday, Nov 30, 09 @ 4:37 pm:
Ghost,
Demand is indeed a major part of the picture. But supply can travel–I used Indiana and Wisconsin as examples because they can easily locate just over state lines and still capture the Chicago market without paying Illinois taxes. So without getting into licensing law, your plumber could be based in Kenosha and serve the north shore. Sam Walton would’ve built a Wal Mart on the Indiana border and still served Chicago if the tax situation was more favorable. A truck company can locate in Davenport and still cruise I-80 into Chicago. Are you really making the argument that Illinois is losing/has lost businesses because there are just too many “plumbers”?
- Rich Miller - Monday, Nov 30, 09 @ 4:41 pm:
===your plumber could be based in Kenosha and serve the north shore. ===
And pay a higher income tax (Wisc income tax is 4.60% to 6.75%, depending upon marital status and income). They also have a service tax.
- Will County Woman - Monday, Nov 30, 09 @ 4:48 pm:
word, i agree. but, i like many others, think getting “square”, through extraorinary measures, consists of a multi-pronged comprehensive approach, that is fair and in the interest of all under the circumstances.
ideally, in my view, extraordinary measures should consist of robust budget cuts, substantial government reforms (given that illinois is in the situation that it is in large part due to political/government malfesence) and finally a modest [and temporary] tax increase, as a last resort and only if necessary.
- wordslinger - Monday, Nov 30, 09 @ 5:52 pm:
The ideas that marginal tax differences and artificial boundaries greatly impact anyone’s job, industry or business is silly.
There are great forces at work in the world’s economy that make any local government insignificant.
This whiplash in global finance is not over. What’s fascinating and terrifying at the same time is to watch and read the current Masters of the Universe try to explain what’s going on and how they’re going to make it better.
Their game faces don’t inspire a lot of confidence. Let’s hope Dubai World isn’t the start of the next house of cards.
- Anonymous - Monday, Nov 30, 09 @ 6:26 pm:
Anonymous 9:15 and 12:54 obviously were not me (but I’m sure V-Man knew that).
- steve schnorf - Monday, Nov 30, 09 @ 10:05 pm:
DJ, to do what you are talking about re pensions and have any effect on our current budget problems, one would have to apply the changes to current recipients and employees. To do that you have to get around state and federal impairment of contracts issues and union contracts. BTW, you have to accomplish that with the GA and every Constitutional statewide office held by Ds, major benefactors of union help.
Ain’t gonna happen. To hold out undoable things as solutions is nothing more than mental masturbation. We could also wish on the evening star for more revenue. Same chances of success. Its just silly.
- Lynn S - Tuesday, Dec 1, 09 @ 12:04 am:
VanMan–wasn’t it almost 10 years ago when George Ryan gave a tax holiday from gas taxes because “gas prices are too high, so this is the way to provide some relief to Joe and Joanna Citizen”? (somewhat paraphrased, but you get the general gist…) My boss and I were apoplectic about this idiocy, and I don’t remember gas prices falling far enough to make this worthwhile. State coffers, in the meantime, took a hit.
The unfortunate reality is that if we had raised taxes to the level you suggest, Ryan, Blago, and their enablers in the state legislature would have blown through it just as rapidly as they did with the $$$$ they got, and we would be facing even larger deficits and cuts than what we are now.
(Frankly, I’m shivering, thinking of how Blago did AllKids, and how much worse it would have been with a bigger pot of money for him to put his grubby paws on.)