Friday, January 20, 2012

Illinois suffers yet another downgrade thanks to mysterious unicorn deaths and Democrat stupidity, but mostly Democrat stupidity

You say that raising taxes makes fiscal problems worse? Gee, that's only happened -- oh -- about 57,000 consecutive times in American history, but we wouldn't expect Democrats to learn anything from facts, logic and reason, would we?

I don’t blame Democrats for wanting to seduce Republicans into a tax-increase trap. Indeed, I completely understand why some Democrats said their top political goal was getting the GOP to surrender the no-tax-hike position.

I’m mystified, though, why some Republicans are willing to walk into such a trap. If you were playing chess against someone, and that person kept pleading with you to make a certain move, wouldn’t you be a tad bit suspicious that your opponent really wasn’t trying to help you win?

...European nations, for instance, have been raising taxes for decades, almost always saying the higher taxes were necessary to balance budgets and control red ink. Yet that obviously hasn’t worked. Europe’s now in the middle of a fiscal crisis... So why do some people think we should mimic the French and the Greeks?

But we don’t need to look overseas for examples. Look at what’s happened in Illinois, where politicians recently imposed a giant tax hike:

Run up spending and debt, raise taxes in the naming of balancing the budget, but then watch as deficits rise and your credit-rating falls anyway. That’s been the sad pattern in Europe, and now it’s hitting that mecca of tax-and-spend government known as Illinois.

…Moody’s downgraded Illinois state debt to A2 from A1, the lowest among the 50 states. That’s worse even than California.

…This wasn’t supposed to happen. Only a year ago, Governor Pat Quinn and his fellow Democrats raised individual income taxes by 67% and the corporate tax rate by 46%. They did it to raise $7 billion in revenue, as the Governor put it, to “get Illinois back on fiscal sound footing” and improve the state’s credit rating. So much for that.

…And—no surprise—in part because the tax increases have caused companies to leave Illinois, the state budget office confesses that as of this month the state still has $6.8 billion in unpaid bills and unaddressed obligations.

In other words, higher taxes led to fiscal deterioration in Illinois, just as tax increases in Europe have been followed by bad outcomes.

Whenever any politician argues in favor of a higher tax burden, just keep these two points in mind:

1. Higher taxes encourage more government spending.

2. Higher taxes don’t raise as much money as politicians claim.

And higher taxes simply indicate tacit acceptance of government irresponsibility.

Which is why the dial must be turned back on all levels of income. Preferably that's accomplished through the Fair Tax or a flat tax.

Pity the poor taxpayers of Illinois. They have been enslaved by the unholy alliance of Democrats and union bosses. And it's probably too late to save them, unless the citizens are willing to organize and rise up to salvage their freedom.

Thank goodness we don't have Democrat hacks from Illinois running the whole damn country.

Update: Tax Hike Doesn't Prevent Moody's From Downgrading Connecticut


Thomas Friedman, NYT said...

Wait a minute. The article states individual taxes were raised 67% and corporate taxes were raised 46% and 7 billion in revenue was raised!! Now, the article says the state only needs another 6.8 billion. Thus, the solution is right there in front of us. Just raise the individual rates another 67% and the corporate rates another 46%.

Anonymous said...

@Friedman - As my previous boss frequently told his workers, "If we all just give 110%... " ;-)

Thanks for reading!

Jack said...

Einstein said that the greatest invention of man was compound interest. jack