"You gotta come back, when are you coming back?" New York Gov. Andrew Cuomo asked at a press conference recently.
Cuomo was pleading with New York's wealthier residents to come back from other cities and states so that they would pay their taxes in New York instead of somewhere else.
"They're not coming back right now. And you know what else they're thinking? If I stay there, I pay a lower income tax because they don't pay the New York City surcharge," Cuomo stated.
New York's Democratic governor has figured out that "soaking the rich" is a losing proposition for all taxpayers.
Sadly, Illinois' Democratic governor promotes the fantasy that putting ever higher taxes on "some of the most mobile people on the globe" - another Cuomo quote - will ever satisfy the insatiable appetite for spending in Springfield. That fantasy has led to a general election ballot question, misnamed the Fair Tax, to allow an ethically challenged legislature to raise taxes as it sees fit.
Just as in Illinois, New Yorkers face a COVID-19 crisis mixed with an uncompetitive tax burden. Wealth and tax revenue are departing New York as a result. It should be obvious to policymakers that Illinois faces the same threat right now given the COVID-19 recession, high tax burden and the lack of trust Illinoisans have in their governments.
The problem will only grow with the higher taxes guaranteed by the approval of the progressive tax amendment.
Illinois already has the second-highest property taxes in the nation and Chicagoans pay the highest sales tax of any city in America. Yet the Fair Tax proposal does not commit one cent to diminishing the rest of the taxpayers' burden. The ballot question could have guaranteed property and sales tax reductions. It doesn't. It could have included a commitment to debt relief. It doesn't. It could have dedicated funding to education and public safety. It doesn't. It just gives legislators more of your tax dollars with no strings attached.
Despite the empty promises of big-spending proponents, no taxpayer will be safe from "fairness." When the Legislature comes clean and admits there isn't enough money from those willing to stick around to pay, more and more taxpayers will be on the menu. Consider Connecticut, the last state to go down the path of the "millionaire's tax." That state started out with an effective flat income tax rate, similar to Illinois' current income tax structure. Within seven years, the state had six more tax brackets imposing higher taxes on anyone making more than $50,000.
A recent Illinois Chamber of Commerce study shows that the current tax increase plan would create a $1.8 billion hit to Illinois' economy. That's on top of the COVID-19 recession that has already created more than 1.4 million first-time unemployment claims.
While the tax increases keep coming, so will the economic pain.
In what many refer to as the Illinois Exodus, our state already has lost more than 150,000 residents in the last five years while surrounding states have grown their populations. Those departing individuals and families have taken their income and taxes with them. Just as important, they have taken their commitment to building neighborhoods and communities with them.
Proponents of the Fair Tax want voters to believe it's the easy fix to our state's problems. It isn't. Illinois' pension debt, backlog of unpaid bills, and calls for even more spending will soak up any revenue from this tax increase in a matter of days. The real solution is for Illinois to return to fiscally sound pro-business policies that made our state's economy an envy of the nation.
Gov. Cuomo has rejected calls for yet another "millionaire's tax" in his state due to the harm it would cause to New York. Let's hope Gov. Pritzker figures it out as well.