Raising taxes in Illinois isn’t the solution to the state’s dire financial mess. And raising taxes on the retirement pensions of senior citizens, proposed by the Civic Federation, is typical of the why Illinois is in trouble. The Illinois Sinkhole needs a systemic change, and that means creating more jobs, giving consumers better salaries to spend more and, yes, lowering taxes
By Ray Hanania
Laurence Msall, the president of the Civic Federation, thinks that Illinois needs to tax senior retirement income in order to generate more revenues. Msall says a senior retirement tax could generate $2 billion in added state revenues.
That’s actually backwards thinking. Here’s why.
Raising taxes to off-set the state’s financial problem is like throwing gasoline on a fire.
Does anyone think if we bring in $2 billion the problems will go away? No. We know most of that “added revenue” will be wasted.
Very quickly, the “new revenues” for this or any tax proposal will vanish into the state of Illinois’ financial sinkhole.
The problem with Illinois is poor management, and Bruce Rauner, a businessman knows that but doesn’t have the skills to correct it.
Illinois is a business. And businesses need customers. Illinois needs customers, too. When more Illinois residents have jobs, they have more money. And when people have more money, they spend more. And that generates sales and business taxes. When businesses do well and employees have better paying jobs, the states they live in do better, too.
That doesn’t address the irresponsible actions of our state governors who have allowed pensions to increase to ridiculous levels. We have traded off our future, promising outrageous pension benefits and wages to union workers so the politicians could count on those union workers to vote for them as voting blocks.
So what do you do?
You have to restore public confidence in government. You have to create new jobs. You have to make it easier for businesses to hire more people.
Because when people are happy, they spend money.
Yes, happiness is tied directly to spending money. The happier you are, the more you spend. The stronger consumer confidence, the more consumers spend. The more consumers spend, the healthier our businesses. And the healthier our businesses, the more money they pay in taxes. That’s how you increase taxes.
You don’t target the weakest wage earners in our society and propose making them pay more from what little they have. You don’t go after retirees or baby boomers.
How do I know all this? Well, I am an astute observer of the recklessness of human behavior.
Dangle $1.5 billion in front of their eyes and they start hallucinating and having impossible dreams. They spend more recklessly and carelessly to buy lottery tickets at the expense of their other needs, like food, clothing, health and even education.
Make the public happy. Take the promise of riches that is the fundamental scam of the lottery system, and convert it into the promise of good services.
Make businesses do a better job. Force them to stop cutting back in the number of employees they hire to provide their services. So many businesses are shorthanded. So many businesses are not paying their employees enough. Businesses sell junk instead of quality.
How many businesses back up their products? Very few. Most try to scam you by offering you a “warranty” at a price that is about 30 percent of the cost of the product you purchase. Telling me I need to buy a warranty for something I just bought tells me they don’t think their products are good.
Consumers need more confidence and more money. Give Illinois residents a tax break. Make Illinois provide better services. Make businesses provide better services. Make businesses hire more people and pay them better.
Watch the revenue come in as happy taxpayers go out and give government back that money through increased spending.
Think about it people!
(Ray Hanania is an award winning former Chicago City Hall reporter and columnist. Email him at email@example.com.)
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