I'm told that there were several elections in November 2010 in which voters made clear that they would not put up with or authorize taxes to pay for uncontrolled government spending and would not tolerate cynical moves by politicians to circumvent the will of the people. If this is true, it appears that word has not made its way to Illinois, specifically to our capital of Springfield, where last week, a lame duck state legislature approved a large increase in our state individual and corporate income taxes -- from 3% to 5%, and 4.8% to 7%, respectively -- less than 24 hours before a new, less Democratic legislature took over. At the same time, the legislature failed to make any significant cuts in spending which might have mitigated the tax increase.
This behavior should be a national issue in the 2012 elections, as an example of why we need fundamental change in our political landscape. Its common knowledge that Illinois is in a huge fiscal mess and that something needed to be done to deal with it. However, common sense would dictate that the something include substantial cuts in spending if there were going to be any tax increases. Yet this was not the case, and the full burden falls on taxpayers, as a result of a sleazy gambit by legislative leaders of using lame ducks to push through the increase.
Both in terms of its substance and methodology, this type of politics must be banished on the local and national levels. Making a change like this without allowing genuine accountability to voters suggests our elected officials are contemptuous of their constituents and fuels a great deal of animosity, not to mention undermining confidence in our entire political system. If the leadership feels that taxes must increase, let them take direct responsibility for doing so instead of hiding behind disappearing legislators. The ObamaCare episode where numerous procedural tricks were used to ram through a program which did not have sufficient legislative support should be instructive in terms of gauging the impact on public support.
Of equal significance is the flawed nature of the policy itself. Perhaps some tax increase could be justified in view of the magnitude of the problem, but this drastic increase will only impair the business climate and reduce actual tax collections. When the legislature seems to be deluded into believing that government is sustainable at its present size and that no one connected with government needs to make any sacrifice, but that the taxpayers are simply a bottomless pit to be used to fund ever larger social services and compensation to public employees, citizens having a choice as to where to live, work, invest or maintain businesses will act accordingly. Witness the growing problems in the municipal bond markets as states encounter difficulty selling new issues, which in many cases are intended to facilitate refinancing of exiting issues. There is real risk of these problems spilling over into broader credit markets.
Its time for enlightened politicians at both the state and national levels to openly make an example out of states like Illinois and make clear that practices like this must change immediately or risk another financial meltdown similar to what we saw in 2008. We see in states such as Wisconsin that this sort of discussion is no longer a political third rail, fatal to the prospects of those who speak honestly, and that the state is aggressively courting Illinois businesses.
As voters, let's make sure we reward those who talk sense instead of continuing to shove pressing issues under the rug.