After Illinois lawmakers recently voted to raise the state’s personal income tax rate by 67 percent and the business income tax rate by 46 percent, some states that border Illinois began celebrating.
Why? Well, it’s simple. Those surrounding states understand a basic law of economics: that the more you tax something, the less you get of it. Therefore, they are preparing for a likely influx of businesses that will relocate their headquarters and jobs outside Illinois to avoid rising taxes.
Indiana Gov. Mitch Daniels, whose state’s tax rate is far lower than that of Illinois, likened Illinois to a “dysfunctional family down the block,” The Associated Press reported.
A Republican state senator in Illinois called the massive tax hikes “the nuclear bomb of jobs bills.”
And even Chicago Democrat Mayor Richard Daley warned residents of his state to get ready to say goodbye to lots of jobs. It will happen quietly, with little fanfare, he noted, because “Businesses don’t have press conferences like this and announce they’re moving 50 people out, 60 people out, 70 people.”
But jobs will leave as taxes rise.
That may be good news for neighboring states whose reasonable tax structures will attract businesses and workers, but it is awful news for the people of Illinois. They have our sympathy.