George Rebane
Illinois is a one of many states (e.g. California) that highlights the evils of progressivism applied wholesale. It is worth holding up as an example of the latest problems with the trillions of dollars of unfunded public pension liabilities (much covered on RR) that are plastered over the nation’s fiscal landscape. Today the state, a leader in corruption and crime, remains in a deep hole of public pension debt from which it hasn’t been able to dig itself out with past tax increases. So now it’s time to raise them again. (Here are some Illinois rankings published by their own Chicago Tribune.)
At issue is the replacement of the state’s flat income tax with a progressive version like we have in California – the more you make, the higher tax rate you pay. And as in California, this has already caused an outmigration from the ranks of the state’s high earning residents. But that makes no never mind to the public service employee unions like SEIU who are now being joined by some of the most misguided Christian clergy on God’s green earth.
The padres, priests, and pastors point out ‘For everyone to whom much is given, much will be required’ as the justification for the changeover from flat to progressive tax rates. The fact that the Bible is silent on tax rates, and that the flat tax already takes much more from the high earners does not tarry long between the ears of these men (women?) of the cloth. But what strikes me as their biggest sin, when they gather their witless flocks to demonstrate for higher taxes on the current earners, is their ignoring the morality of the whole notion of constantly taxing the future to pay the present for bad debts assumed in the past.
The unattainable pension promises were made purposefully and sub-rosa by sleazebag politicians working with scumbag unionists without any of their taxpaying constituents being told the extent of the benefits being conferred on the public employees and/or the liabilities assumed by the private sector workers and their children, some yet unborn.
When governments urge bankers to make loans to people who have no demonstrated ability, let alone hope, of even servicing their debt, then the country’s lamebrains are told to proscribe the bankers and their depositors, and give these money lenders government mandated haircuts. But such an accusing finger is never pointed at government itself over the decades during which these Ponzi meisters piled up unfunded liabilities that now exceed $200,000,000,000,000 (that’s a two with fourteen zeros in its train).
So how should we look at those public employees with defined benefit or token contribution plans who stand to gain multi-million dollar pension accounts? And what of those who are already sucking on that generous tit in the sky? What do today’s taxpayers and their children owe these people? Because of the enormously large number of dollars that are owing across the land, I’m afraid that pumping up current economy-killing tax rates (see below) and believing that to be a cure for what ails us is nothing but an empty article of faith now abetted by clergy with an extremely dim understanding of scripture. Heather Wilhelm, former senior fellow at the Illinois Policy Institute has a more complete description of this Illinois movement that may be coming to a state near you.
And while we’re touching the topic of states’ economies, I’d like to recommend the just released An Inquiry into the Nature and Causes of the Wealth of States by A. Laffer et al, published by Wiley. This tome, abundantly decorated with data, charts, and graphs, convincingly demonstrates “how taxes, energy, and worker freedom change everything” about where we live and what we do in these United States. In this comprehensive effort “the authors have put together a solid case for lower state income taxes and decreased tax burdens. Wealth doesn’t stay put. Businesses and individuals in upper economic strata go where their interests are protected. The result? As this book demonstrates, almost every measure of economic prosperity at the state level – population, employment, and beyond – is linked to taxation. Low-tax states in every region of the country are outperforming their neighbors.”
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