Progressive Insanity Across the State Line
by Mark Franke
“The beatings will continue until morale improves.”
We’ve all seen a sign like this posted in workplaces, usually places where the boss is not likely to venture. It is part dark humor and part commentary on the disconnect between the elites and the hoi polloi.
But this column is not about management theory but about practical politics, about the political elites versus the political hoi polloi.
The governor of our neighboring state of Illinois has decided that his state’s morale (read: tax revenues) needs improving so he is resolved to increase the beatings (read: tax increase). His analysis, if not his ideology, instructs him that Illinois’ major problem is that the state income tax rate is flat, that is the same rate at every level of income. Definitely a big no-no for the progressive catechism.
So just get with it, he thinks, and use what is euphemistically called a “progressive” tax schedule where higher marginal rates are applied as one’s income goes up. The federal tax system is thus enlightened as is that of most states, Indiana’s mercifully not being one of those.
But here’s the rub. Illinois is already the highest taxing state in the Union. The website WalletHub estimates that the effective tax rate on the median Illinois household is nearly 15 percent compared with a national average of 10.76 percent. (Indiana, by the way, is a full percentage point over the average and ranked as the 16th worst state for taxes. Are you listening down at the statehouse?)
Maybe the Illinois political masters think their taxpayers are taking such a beating that a little more zip to the strokes won’t be noticed. (One is reminded of a scene from the movie “Animal House” where the pledge is being paddled and responds, “Thank you, sir. May I have another?”)
The politically inconvenient fact is that the state’s taxpayers are feeling the pain and voting with their feet. Since the end of the recession, the Midwest has been slowly but steadily gaining population. Not Illinois, though, as it is decreasing in population is a mirror image of the Midwest’s increase. According to Atlas Van Lines’ annual report of outbound versus inbound moves, Illinois was the nation’s leader (or last place finisher) for 2017 with nearly two residents decamping for every one enticed to come in.
Could high taxes have anything to do with it? Why don’t we ask the mother of media darling Rep. Alexandria Ocasio-Cortez, whose daughter has all sorts of soak the rich schemes she intends to push through Congress. It seems mom fled New York City to Florida because of — are you ready for this — high taxes. She reduced her property tax bill from $10,000 to $600, she claims.
That can’t be good news for that other bastion of progressive doctrine, New York. This unfortunate news story came on the heels of Amazon’s volte-face on locating a corporate headquarters on Long Island. And what frightened Jeff Bezos and his highly paid minions away? May I suggest taxes?
Even after the state and city of New York offered Amazon three billion, yes billion, in tax breaks, the executive suite got cold feet. “[A] number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project,” said the official corporate press release. Strip away the corporate speak and you see the finger pointing at Rep. Ocasio-Cortez and her ilk’s demanding a future that just didn’t fit with Amazon’s business plan. Or the personal financial plans of the highly paid Amazon workforce.
The next immigration crisis will not be at our southern border but the blue state-red state divide. Maybe the progressives will find a wall they want to build, perhaps between Illinois and Indiana?
One thing we can be sure of is that the neo-socialists who now think they have an electoral mandate will continue to cast covetous eyes on other people’s money to obtain the wherewithal to create their dream of progressive utopia. Don’t expect historical reality or economic theory to get in their way. No matter the proven results of confiscatory tax rates’ depressing economic productivity, let’s try it again. And again.
Maybe Albert Einstein was thinking of them when he defined insanity as “doing the same thing over and over again but expecting different results.”
Mark Franke, an adjunct scholar of the Indiana Policy Review, is formerly an associate vice chancellor at Indiana University-Purdue University Fort Wayne.