Editorial: Like giving a drug to an addict

By on January 13, 2011

No one can deny that the state of Illinois is in the midst of a financial crisis, and no one can legitimately claim that a solution exists that is simple or easy to implement.

There is no purely painless way to overcome the years of mismanagement at the state level.

In addition to the state’s specific problems, the struggling national economy has added fuel to a long-burning fire, and now we find ourselves with high unemployment, a state budget gap in the billions, and state payments that were due months ago that still remain unpaid.

One would hope that the average thoughtful person would look at the crisis and immediately begin to think of ways to reduce spending and limit the state’s liabilities in the least impactful way possible. One would hope that the debate would focus on how deep the cuts can go without causing unnecessary damage or hardship to the public.

Instead, the state legislature worked until the middle of the night Tuesday night/Wednesday morning to pass a 66 percent individual income tax hike and a 46 percent corporate income tax hike; making sure their votes got in before the next batch of legislators were sworn in mid-day Wednesday.

Also included in this wonderful, late-night slap in the face is a spending increase cap—yes, that’s a spending increase cap—of 2 percent per year from now until 2015.

In addition, the tax hike is retroactive to Jan. 1, so everyone has been paying this tax without realizing it for a couple of weeks already.

In other words, the state has spent itself into a massive, unsustainable, borderline insurmountable budget deficit, and the answer that came out of Springfield was a massive tax increase and associated spending increases.

If the problem is spending, how exactly does more spending solve the problem?

Like an addict approaching their rock bottom, the state’s leadership is simply in denial of the cause of their problems. They believe the problem is a lack of state revenue, not of state over-spending.

But even if that view is valid, seeking more revenue by increasing the personal income tax rate from 3 to 5 percent and the corporate income tax rate from 4.8 to 7 percent is not the way to go.

If you want to increase state tax revenue in an environment of near-10 percent employment (beyond 10 percent in some locales), you might try and create a tax and regulatory structure that would lead to more businesses hiring more workers, and would lead to more workers having money to spend on goods and services, as opposed to taxes.

With the increase in workers and economic activity, the total tax revenue would begin to climb, state revenues would increase; and combined with a significant reduction in state spending, the state could begin to rebuild a fiscally responsibile foundation.

Rather, the pigs feeding at the trough realized the amount of their slop is dwindling, and instead of cutting back on how much they consume, they simply increased the size of the trough.

How long until their tax revenue gains begin to fall again, as higher unemployment occurs because businesses either close up shop entirely or head for other states and those with jobs have less to spend.
What are our addicts in Springfield going to do then?

A tax increase of some size would have likely had a legitimate place in a rationale solution, but only when combined with real, and significant, spending cuts. If the public saw that our representatives in Springfield were serious about changing the ways of the state government, they would certainly be more willing to deal with some of the pain necessary to turn our collective ship around.

But now, with a past-midnight vote on the eve of a new legislature taking office, with a plan that will massively increase both an individual’s and a company’s tax burden while at the same time guaranteeing more state spending, not less, our state politicians have proven that money and power are the ends and cowardice is the means.

It may be time to consider voting everyone in Springfield out of office, whether they voted for this tax increase or not.

If they voted for it, they either do not know or do not care about how real-world economics work. If they do not know, they are unqualified for office; and if they do not care, then they are part of the core problem Illinois has faced for years.

If they voted against it, then they failed to stop a trainwreck from occurring and need to be replaced, because the opposition proved as effective as not existing in both stopping this particular vote, as well as the years of bloated spending that created this mess.

It is not enough for the opposition to stand on the sidelines and complain after the fact; they need to develop the solutions, build public support for it, and then use that momentum to defeat any attempt to continue the spending-spree this bill allows.

Political party no longer matters in Illinois; there are only those who are part of the Springfield “machine” and either actively promote its existance or allow it to perpetuate by their failure to act appropriately.

We need new individuals, from both parties, who will represent both sides of the philosophical spectrum while doing the people’s business, rather than the partisans who are more interested in their own money, power and political prospects.

Take the drug away from the addicts; vote them all out.