Fair tax. Coming and going.

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The crisis of African American flight from Chicago and Illinois is not new news.

The 2010 Census showed the city of Chicago lost 200,000 people over the last decade. The city now has about as many people as it did in 1910. There are 181,000 fewer African Americans in the city, a whopping drop of 17 percent, and 72,000 fewer in the region as a whole.

But Bruce Rauner supporters and apologists recently got all fluttery about millionaires hiring moving vans.

It was a very selective concern.

Every time I write about the need for Illinois to end its low tax, low spending policies I get a flood of comments crying the blues about people fleeing Illinois because of high taxes.

The truth is that the loss of 200,000 African Americans in the 90s was because of the loss of good jobs paying union wages.

I always tell the story about how when I came to Chicago in 1973, every city neighborhood had a neighborhood school, a place of worship, a bar and a factory.

Now the factories are gone, the neighborhood schools are being closed or are often half-filled but with a charter school across the street and the places of worship are still around as are the bars.

David Roeder in the Sun-Times:

Illinois’ overall tax rate is competitive. Consider the big-ticket items: individual and sales taxes. Except for the nine states that have no income tax, Illinois’ 3.75 percent flat rate is among the lowest. Even the old rate of 5 percent that stabilized state finances was relatively low. Unlike Illinois, most states have a progressive income tax that charges more for higher earners on a percentage basis.

Indiana, at a flat 3.3 percent, can claim a lower statewide rate, but watch out: Each county in Indiana collects an additional income tax that can amount to another percentage point or two. Illinois has no county income tax.

As for the sales tax, Illinois has so many exemptions that Rauner himself plus respected agencies such as the Civic Federation have suggested broadening it to include services from haircuts to legal fees.

The Illinois Economic Policy Institute examined total state tax loads on individuals and found that in Illinois, the rate in 2013 was slightly lower than in Indiana or Wisconsin.

About the departure of millionaires?

Rauner conjures images of moving vans bound for neighboring states to create false urgency behind his non-budgetary agenda.

KDM Consulting examined tax data to conclude that any net loss of people from Illinois to Indiana and Wisconsin was explained by Illinois’ larger population. Its report also said that out-migration declined over the last 20 years.

In 2013, a nonprofit alliance called the Illinois Innovation Network examined Dun & Bradstreet data from 2012 and concluded the state had no large-scale loss of companies and workers to its neighbors. Some left, but they were replaced by an inflow from those states, an important point given the much larger economy in Illinois.

Those who drink the Rauner Kool-Aid will continue to write me and tell me how only Rauner’s anti-union turnaround will keep those in Illinois from heading to Wisconsin.

Yet it is precisely the  economic race-to-the-bottom that has sent Chicago and Illinois’ working people looking elsewhere for jobs and services. And not in Scott Walker’s Wisconsin.

When taxes are called competitive, that means they are low. In Illinois the richest and the poorest all pay the same income tax rate. Even before the current budget battle, Illinois couldn’t and didn’t pay its bills.

5 thoughts on “Fair tax. Coming and going.

    • Low income taxes on the rich relative to earnings. High for those who make little. That’s why it’s called “regressive.”

  1. Fred, I urge you to read Thomas Frank’s, 2016 novel, “Listen, Liberal: Whatever Happened to the Party of the People?” It is great. When it comes to education, I think both parties have colluded to takeover education. But it never occurred to me that it has also happened in every other facet of society as well. The Dems move to claim the “center” was anti-union. They expected to get union votes as they had no where else to go. Of course, that didn’t happen as union members just stayed home. Anyway read Frank’s new novel. It isn’t long. Pat Herrmann

    Sent from my iPad

    >

  2. Why would all of rauner’s fav. companies leave IL when the state pays them to stay? How many more companies are going to hustle the state for huge amounts of cash under this governor? Allowing companies to keep the state income taxes their workers pay is obscene. Meanwhile, the state cries broke and cannot support those who need it. Doe not make sense.

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