A year ago, Illinois passed sweeping tax increases aimed at defeating a budget deficit in the billions of dollars.
A state income tax increase of 66% and a corporate tax increase of 46% was supposed to bring in more money. It was apparently a good idea to the liberals in Illinois…at least until it failed.
Back in September, it became obvious that the effort hadn’t worked, Illinois would be saddled with another budget shortfall in the billions ($8 billion to be precise).
Here is the most important line in the story from the above link, which comes from the Chicago Tribune.
The Civic Federation analysis found that while lawmakers cut spending for state agencies this year, the reductions were offset by higher pension costs and the growing cost of paying back years of increased borrowing to keep Illinois afloat.
This should be sounding familiar.
Entitlement spending (truly, that’s what public union spending is, when a group of people can extort the government for more benefits and salary with the government possessing essentially no recourse) and burdensome debt.
The deficit in Illinois did fall, from about $13 billion to $8 billion thanks to the tax increase and major cuts to spending. But interest on the debt, union benefits and the rising costs of Medicaid hamstrung progress.
In other words, Illinois undertook a massive tax increase and made only a dent in the deficit.
Now remember that 1 trillion is 1,000 billions. That means our federal deficit is 1,000 times worse than the state of Illinois had to start 2011.
Despite obscene hikes to taxes, the state was unable to cut into the gap between what it spends and what it takes in.
The interest on federal debt, given that the federal debt is considerably worse, would be an even more onerous burden to overcome if the plan was to simply raise taxes.
This liberal myth that we can wish away our deficit simply by increasing taxes (and just on the rich), is proven in Illinois, as is the failure of such a plan.
Even on a smaller scale, it simply doesn’t work.
Of course, you haven’t heard about this analogy on a national scale because it would force journalists to have any kind of perspective or understanding of fiscal issues.
Furthermore, it’s shocking to me that none of the GOP Presidential candidates have picked up on what is a perfect example of why the President’s plans for our economy are misguided at best and reckless at worst.
It’s fitting that this heinous mismanagement of public dollars comes from the state producing our soon-to-be-former President, a man so clueless when it comes to fiscal policy he probably thought his state had it right when it cleaved money from the tax-payers with a heavy hand and sharp blade.
Businesses fled to Wisconsin, Indiana and other Midwestern states where business climates were more favorable and where there are leaders who understand the importance of a balanced budget, not to mention lower taxes.
There ought to be no bigger issue in this or any election than debt and deficit because it is the driver of everything government does.
Private sector markets rely on stability in government and favorable taxing conditions to survive, a trickle-down we all feel.
Abortion, gay marriage, a candidate’s tax returns, these are all just red herrings in an argument that should only revolve around our leader’s plans to once again have accountability in government.
A plan to get government out of the way of our own prosperity, rather than attempting (and failing) to be the arbiter of it.