The ‘unavoidable’ that needs to be avoided

By Jordan Harp

It may seem unavoidable. Faced with the worst economy in years and an $11 billion budget shortfall, drastic action needs to be taken. Apparently Gov. Quinn doesn’t know the difference between a drastic action and stupid action.

It may seem unavoidable. Faced with the worst economy in years and an $11 billion budget shortfall, drastic action needs to be taken. Apparently Gov. Quinn doesn’t know the difference between a drastic action and stupid action.

That is really the only reason I can think of behind the governor’s budget proposal, which aims to increase the personal income tax from 3 percent to 4.5 percent, and raise the business tax from 4.8 percent to 7.2 percent.

In a time when consumer spending is at its lowest in years, and businesses are facing their toughest climate in recent memory, the governor proposes to raise their tax burden. He has called it “the least bad option,” but forcing everyone to give more to the government when people are spending less and businesses are cutting back on their workforce and investments is not just bad, it’s insane.

The one thing that Illinois had going for it was its low personal income tax, but under the governor’s proposal, that would disappear. Of course he says that only the affluent will pay higher taxes, namely, families earning more than $60,000 annually, namely, the middle class. But according to a report by the Illinois Policy Institute, an individual making more than $14,000, a couple making more than $28,000, a family of three making $42,000, and a household of four making $56,000 would all see their taxes increase.

In addition, Gov. Quinn proposes raising the tax on cigarettes by $1. Any guess on who tends to smoke more? That’s right, the poor. And if they stop smoking because of the higher prices, there goes the tax revenue.

The harm done to businesses might be even more damaging. Quinn’s budget would raise the corporate income tax from 4.8 percent to 7.2 percent. In addition to that, Illinois also has a 2.5 percent “replacement tax” on corporate income. The replacement tax would be kept under Quinn’s plan, effectively making the corporate tax rate 9.7 percent.

This would make Illinois one of the most unfriendly business environments in the country, if it isn’t already. According to the Tax Foundation’s corporate income tax index, which ranks states based on their tax rates, Quinn’s budget would lower Illinois from 28th to 40th. This is in addition to everything else Illinois does wrong economically. It ranks 39th, 43rd and 41st, on sales, unemployment insurance and property taxes, respectively. Illinois also isn’t a right-to-work state, making it heavily unionized and repelling businesses.

This has cost Illinois greatly. The unemployment rate is above the national average. The American Legislative Exchange Council has rated Illinois 48th in economic performance in 2009, and ranks it 44th in economic outlook for 2009. Lawmakers should be looking to increase business investment and personal spending, yet drastic tax hikes will have the exact opposite effect.

Executives at Caterpillar have stated that the proposed hike could hurt them, as they have already been forced to lay of thousands of workers, and say that Illinois must do the same.

The problem, as always, lies with those in Springfield. Quinn likes to blame the last guy to hold his office for the debt the state faces, yet he ignores the complicity of many in the Legislature of passing his debt-ridden budgets.

Yet still, Quinn’s budget includes some rather profligate spending, such as a $26 billion public works program and $1.3 billion for an expansion of O’Hare.

Additionally, Medicaid expenditures will increase, as well as spending on state employee salaries, and more money will be thrown into the bottomless sink that is the public education system.

It seems that when Quinn calls for “shared sacrifice,” he means the Illinois taxpayer, not the bureaucrat. Quinn’s budget is a reckless action in desperate times. During tough times you cut back, even if it hurts, not take more from taxpayers.

The last governor embarrassed us; the current one wants to fleece us. Given a choice between the two, I’ll take the former any day.

Jordan is a junior in MCB and isn’t looking forward to these final seven weeks