There’s a simple reason why Illinois Democratic candidates for governor don’t get specific about the progressive income tax they all want: The numbers immediately expose why it’s not the magic bullet their reality-challenged progressive supporters imagine. Just as we saw with the recent income tax hike, we’d just be putting more money into a bottomless pit.
Some light emerged on this topic last week. Bob Dailber is a downstate Democrat running for governor you never heard of. He, alone, got specific, proposing a tax cut for everybody earning less than $150,000 per year and progressively higher rates on higher earners.
Resulting revenue? $1 billion, claims Dailber. Whoopee. That’s just a ripple. Even with the recent tax increase of $5 billion that Democrats claimed balanced the budget and saved the state, next year’s budget is already on course to be unbalanced by at least $3 billion.
We detailed why last month. Spending grows year after year far faster than revenue thanks to our pension system, the new education bill that requires another $350 million each year, health care costs and more. And that’s using phony government budget accounting that vastly understate true losses.
Jim Dey has a nice article today on Dailber’s proposal, pointing out that revenue actually would be lost under it, contrary to Dailber’s claim.
But Dey is wrong to say that Ralph Martire from the union-funded Center for Tax and Budget Accountability has a more “realistic plan” that would raise $2 billion. Again, $2 billion just doesn’t solve anything unless spending is addressed, even if you believe Martire’s numbers, and you shouldn’t.
Martire and all Democrats scoff at the idea of “dynamically scoring” tax rate increases when predicting how much revenue they’ll raise. That’s fancy talk for the concept that, in the long run, people and employers leave because of higher taxes. They’re asking Illinoisans to reject what they see and hear with their own eyes and ears.
Then there’s the matter of when any revenue from a progressive income tax would materialize. The necessary constitutional amendment wouldn’t even get on the ballot until at least 2020. Revenue wouldn’t show up until 2022. We’ll be watching the dirt getting thrown on Illinois’ grave by then.
Jim Dey used the right phrase. It’s all a “bait and switch.” To really get the revenue Dems want, they’d have to use the constitutional amendment for a progressive tax to levy a massive increase across the board. True, and that would accelerate the death spiral, leaving spending growth unchecked. Illinois’s total state and local tax burden is already worst, or nearly worst, in the country.
If you think a progressive tax would be fairer, fine. But if you think it will do much to solve our fiscal crisis you’ve been suckered.
-Mark Glennon is founder and Executive Editor of Wirepoints. Opinions expressed are his own.
Update: This entry on Twitter was made along with this article:
I am a financial adviser in Wheaton, Illinois. 80% of the clients with whom I have met over the last 3 years regarding retirement, are leaving