The Last Thing Illinois Needs Is a Tax Hike
There's no question the economic devastation caused by the coronavirus pandemic will have far-reaching consequences for businesses, governments, and families across America. In fiscally mismanaged blue states like Illinois, the ramifications will be especially severe.
For decades, Illinois has been governed by spendthrift politicians who thought that prosperity could be achieved through government action. As a result, Illinoisans have been subject to zealous regulation, a myriad of high taxes, and government spending that continually outpaces revenues. This has led to mass outmigration of taxpayers, sluggish economic growth, and a public pension system that teeters on the edge of insolvency.
Illinois was thus particularly ill-prepared for the current moment. In mid-March, the state’s so-called rainy-day fund was a paltry $1.19 million, and state officials now predict the cost of the pandemic will exceed $8 billion – about 20% of the state budget. Cue a steep increase in pension liabilities, borrowing, and budget deficits. And, of course, taxes.
Meanwhile, Illinois Gov. J.B. Pritzker, brother to former Obama Cabinet member Penny Pritzker, has used the coronavirus outbreak to position himself on the national stage. He uses Twitter to criticize the president and has been making the rounds on cable news shows.
But while Pritzker seeks to establish his legacy, what the governor will be remembered for most is seeking to raise taxes during a public health and economic crisis and presiding over Illinois’ ultimate demise.
Despite Pritzker’s branding as a sensible businessman who would finally solve the state’s fiscal problems, he has embraced a progressive agenda and doubled down on Illinois’ failed tax-and-spend strategy. As the governor appears on talk shows and in press conferences expressing his concern for the businesses hurt by the pandemic, he’s simultaneously seeking to raise their taxes.
Pritzker and his political allies have put on the ballot an amendment to the state constitution that would replace Illinois’ flat income tax rate with graduated rates that would hit businesses and job creators particularly hard. The rate increases would make Illinois home to the second-highest corporate income tax rate in the country, and the fourth-highest rate on pass-through income.
The governor has been called on to remove the tax increase from the ballot. But even as the state of Illinois offers small businesses grants to help them weather the economic shutdown, Pritzker refuses to take his tax increase proposal off the table. He shrugged off the suggestion by saying, “This is not a time for politics.”
Across the country, Americans are doing their part to “flatten the curve.” Mere weeks ago, “non-essential” businesses were the fabric of daily life. In the intervening weeks, businesses, and especially small business owners, have jeopardized their futures in order to help save lives.
It appears the only ones who aren’t willing to change are those who run the state of Illinois.
Illinois was a cautionary tale before the onset of COVID-19; now, by refusing to back down from raising taxes on businesses, Gov. Pritzker lays bare the heartless and destructive logic of progressive politics.