Where Did Everybody Go?

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%.

Bio
Latest Posts

E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.

E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.