USA: Will 75% tax hike fix Illinois budget mess?

You gotta love these blue Democrat states - most are crashing and burning as we speak. After years of socialist stupidity, Illinois is now preparing to increase personal income tax by 75%. That's what the Chicago mob Governor requires to pay for the state's wonderful socialist, unionised pension plans; government worker salaries and other welfare debt. I wonder what the mob state is going to do when reasonably intelligent people (non-moochers) decide enough is enough and pack up the family to head for their closest Republican state where taxes are usually lower and jobs more plentiful? Did this mob lot not think that productive people are most likely going to leave the state in protest? Of course not! We're talking about socialists here who have yet to realise that the free money tree does die eventually and yet the bills still need to be paid. Unfortunately, this Chicago fairy tale doesn't end with "and they lived happily ever after"! Last one switch off the lights?

Gov. Pat Quinn and his fellow top Democrats are pushing a huge income tax hike largely because the state's budget hole is enormous.

Set aside the sticker shock, though, and the lingering question that arises is whether this plan will finally fix Illinois' chronic money problems, taking Illinois from nationally renowned deadbeat to satisfactorily solvent.

Don't count on it.

For four years, the state might approach something like a truly balanced budget for the first time in a long time. Come year five, however, a large part of the tax increase is supposed to expire.

"If you don't control spending, then after four years, there's no question you'll have a big deficit," said Dan Long, executive director of the bipartisan Commission on Government Forecasting and Accountability.
 
That's a big "if" in Springfield, given that many lawmakers at times appear allergic to financial restraint. Lawmakers have advanced a measure to limit spending on most programs. Perhaps it's telling that legislators think they need a law to hold spending down.
 
In case you missed it, the game plan is to raise the personal income-tax rate by 75 percent. It would jump from 3 percent to 5.25 percent for four years, then drop to either 3.75 percent or 4 percent, depending on which version of the plan is in vogue. The business tax rate also would go up, and smokers would kick in an extra buck a pack.
 
All told, those tax hikes could raise between $7 billion and $8 billion a year. In theory, that's enough to erase the state's so-called structural deficit — the difference between what Illinois takes in and what it spends — that some lawmakers peg around $6.5 billion.
 
Of course, rising government worker salaries, health care and pension costs are constant budget pressures, and the state carries a heavy debt load that's slowly being repaid. In addition, Quinn and lawmakers are looking at using the tax hike to spend more than $700 million more on education a year. and pay for yearly $325 property tax relief checks to homeowners. More borrowing to quickly pay down an $8 billion pile of overdue bills also carries some costs.

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