In Glen’s post today I read about thirty-five Springfield politicians opposing even the idea of putting an Illinois graduated income tax to a vote of Illinois residents. Writing legislation to oppose something that hasn’t even be put before Illinois’ voters? That seemed odd. So I read the text of the bill. Follow me through this laughable legislation:
WHEREAS, Illinois’ income tax has been levied at a non-graduated rate since its inception in 1969; and
That’s right. We should all do things the same way we did them in 1969. I like orange shag carpet, black and white TV and transistor radios. Why change? But wait, it gets better.
WHEREAS, The current flat rate structure is a commitment from the Constitution of the State of Illinois; and
I wonder why that doesn’t seem to matter where pension legislation is concerned for the sponsors of this bill?
WHEREAS, Illinois’ current flat tax rate provides a more predictable, sustainable, and enticing climate for businesses and individuals alike; and
OK, now we get into the “this has been disproven by countless studies” territory.
The major study on the relationship between state personal income tax policy and entrepreneurship was commissioned by the U.S. Small Business Administration and published in final form in early 2012. […] In summarizing their findings, the economists stated: “We find no evidence of an economically significant effect of state tax [policy] portfolios on entrepreneurial activity. . .”
Or this example:
A September 2012 study by scholars at the Ewing Marion Kauffman Foundation — the leading think tank conducting research on entrepreneurship — found that the number of Inc. [magazine] 500 firms based in the state per one million state residents did not have a statistically significant correlation with the state’s ranking in the Tax Foundation’s “State Business Tax Climate Index,” which includes a number of measures of state personal income tax levels and progressivity along with other business tax liability measures, such as state corporate income tax rates.
Liberal examples? How about this one:
A 2006 study published in the journal of the libertarian Cato Institute reached the same conclusion as the Bruce/Deskins paper. It did not find a statistically significant correlation between top personal income tax rates state and federal combined and the share of state residents employed in their own businesses sole proprietorships and partnerships.
So, sorry, a graduated income tax does not discourage a predictable, sustainable, and enticing climate for businesses and individuals alike.This next part is really choice:
WHEREAS, A graduated income tax is unresponsive to a modern economy, contributing to slower economic growth, less entrepreneurship, and fewer new jobs; and More…