Illinois Governor Pat Quinn and House Speaker Michael Madigan want to tax the rich even more. But the successful or those that create jobs are leaving the state. The WSJ reports:
All of which makes it an ideal moment to consider how the Quinn-Madigan policies are working. One way to judge is to compare Illinois with four other Great Lakes states that the federal Bureau of Economic Analysis (BEA) lumps together for its annual survey of economic performance by the 50 states.
Start with Illinois’s 8.7% jobless rate, which is the country’s second highest after Rhode Island’s 9% and has fallen by a mere 0.7 percentage points since Mr. Quinn began his second term in January 2011. That’s when Illinois increased its flat income tax to 5% from 3% and the corporate rate to 9.5% from 7.3%.
The nearby chart shows the jobless-rate trend in five Great Lakes states since 2010. Note the sharp decline in Michigan, where Republican Governor Rick Snyder and a GOP legislature cut corporate taxes. In the last three years, the rate has fallen to 7.7% from 11% in the Wolverine State, to 6.5% from 9.1% in Ohio, to 6.1% from 9% in Indiana, and to 6.1% from 7.7% in Wisconsin. Only Illinois has raised taxes, while Ohio cut taxes, Michigan and Indiana have passed right-to-work laws and Wisconsin famously reformed collective bargaining.
Illinois has also recorded the slowest personal income growth in the Great Lakes. Between 2012 and 2013, personal income rose by 2.1% in Illinois versus 2.7% in Wisconsin, 2.5% in Michigan, and 2.3% in Ohio and Indiana.
But get this—about a third of Illinois’s personal-income growth last year was driven by “transfer receipts” (i.e., food stamps, workers’ compensation, disability, welfare, Medicaid, Social Security, Medicare, earned income tax credits, unemployment benefits). According to BEA, these payments increased 5.2% in Illinois in 2013, the third most in the U.S., while wages and salaries ticked up only 1%.
E.J. Smith - Your Survival Guy
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