Republicans looking to combat President Obama's Castro-like State of the Union speech have an easy case laid out for them. It's called the state of Illinois, which dramatically increased taxes on individuals (especially the "rich") and businesses last year.
And not only did Illinois fail to close its budget gap, but Obama's ultra-left wing, union-controlled home state also got a ratings downgrade. Which means -- for you drones out there -- that its future borrowing costs will go still higher.
It's called circling the drain: more borrowing begets lower ratings, which increases borrowing costs, and so on...
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.
Turn out that raising taxes, especially on the "rich", does three basic things:
• It destroys productivity, because the "rich" are the ones who invest, take risks, start businesses, and -- in general -- create productivity in the economy;
• It encourages the government to continue reckless spending;
• And never raises as much money as projected.
In other words, allowing government to raise taxes without first restraining spending is irresponsible at best.
And such a plan, should Obama somehow convince people to support it, is guaranteed to fail just like every other one of his fiascoes*.
* Including, but not limited to: "Stimulus" programs, HAMP, HARP, Cash-for-Clunkers, Obamacare, "Financial Reform", permanent 9% unemployment and 20% underemployment, the unlawful takeovers of GM and Chrysler, "Quantitative Easing", a new war, and $5.2 trillion in new Obama debt.