High taxes have consequences

High taxes have consequences

Rep. Peter Roskam
March 30, 2011

Illinois and other states have recently made headlines for their declining populations. Whether they realize it or not, what states like Illinois are learning the hard way is that over-taxing and over-regulating has consequences. And Illinois is now learning that one painful consequence is job loss.

Caterpillar, a Fortune 500 company that employs 23,000 workers in Illinois, currently finds itself dealing with a new tax increase in an already over-taxed state. Their CEO, Doug Oberhelman, sent a warning shot on March 21st with a letter to Illinois’ new Democrat Governor Pat Quinn:

“I want to stay here,” Oberhelman wrote. “But as the leader of this business, I have to do what’s right for Caterpillar when making decisions about where to invest. The direction that this state is headed in is not favorable to business, and I’d like to work with you to change that.”

The “direction” Oberhelman refers to is the economic sinkhole that Governor Pat Quinn recently plunged Illinois deeper into by raising taxes on employers by 30%. Overnight, Illinois went from having the 21st highest overall corporate tax rate in America to the 3rd.

In today’s global economy, that is not the direction we want to be heading. Along with a 35% federal corporate tax rate — soon to be the highest corporate rate in the entire world — it’s no wonder that companies are fleeing Illinois and the U.S.

I was reminded how other states view Illinois recently, when I moderated a panel of three current U.S. governors. When the subject of Illinois came up, the governors burst out laughing and apologized to me in advance for stealing away businesses for their own states. They each knew that the recent tax hike on employers in Illinois opened the door for them to entice employers in the Land of Lincoln to move to their own states.

What’s happened here is that decades of reckless government spending has forced places like New Jersey and Illinois to increase taxes time and time again. The path to economic recovery, debt reduction, and job creation is not through tax increases, however, but through cutting spending and reforming our onerous tax code — the single greatest thing we can do to give job-creators more confidence in their futures.

Our current tax code punishes American companies for success time and again. Rather than enticing our companies to stay, it actually encourages them to head elsewhere for a more friendly business environment. And rather than create a better business environment, Illinois chose to double down on those failures, and our citizens will pay the price.

States and countries that avoid the missteps of endless higher taxes and regulations are on the right path to prosperity. As Caterpillar showed last week, those places will soon reap the benefits of smart economic policy, and leave others in the dust.

Rep. Peter Roskam is a member of the House Ways & Means Committee and the chief deputy whip

Making Tracks Out Of Illinois

Neal Boortz
March 30, 2011

Roger Keats was a Republican State Senator in Illinois and at one time a candidate to be the board president of the Republican Cook County board. It seems that Mr. Keats and his wife, Tina, are making tracks. They've finally bought some luggage and headed for the Hill Country of Texas. I thought you might like to read a letter Keats shared with his friends as he watched his home of 60 years disappear in the rear view mirror.

Goodbye and Good Luck

As we leave Illinois for good, I wanted to say goodbye to my friends and wish all of you well. I am a lifelong son of the heartland and proud of it. After 60 years, I leave Illinois with a heavy heart. BUT enough is enough! The leaders of Illinois refuse to see we can't continue going in the direction we are and expect people who have options to stay here. I remember when Illinois had 25 congressmen. In 2012 we will have 18. Compared to the rest of the country we have lost 1/4rd of our population. Don't blame the weather, because I love 4 seasons.

Illinois just sold still more bonds and our credit rating is so bad we pay higher interest rates than junk bonds! Junk Bonds! Illinois is ranked 50th for fiscal policy; 47th in job creation; 1st in unfunded pension liabilities; 2nd largest budget deficit; 1st in failing schools; 1st in bonded indebtedness; highest sales tax in the nation; most judges indicted (Operations Greylord and Gambat); and 5 of our last 9 elected governors have been indicted. That is more than the other 49 states added together! Then add 32 Chicago Aldermen and (according to the Chicago Tribune) over 1000 state and municipal employees indicted. The corruption tax is a real cost of doing business. We are the butt of jokes for stand up comics.

We live in the most corrupt big city, in the most corrupt big county in the most corrupt state in America. I am sick and tired of subsidizing crooks. A day rarely passes without an article about the corruption and incompetence. Chicago even got caught rigging the tests to hire police and fire! Our Crook County CORPORATE property tax system is intentionally corrupt. The Democrat State Chairman who is also the Speaker of the Illinois House (Spkr. Mike Madigan) and the most senior alderman in Chicago each make well over a million dollars a year putting the fix in for their client's tax assessments.

We are moving to Texas where there is no income tax while Illinois' just went up 67%. Texas' sales tax is ½ of ours, which is the highest in the nation. Southern states are supportive of job producers, tax payers and folks who offer opportunities to their residents. Illinois shakes them down for every penny that can be extorted from them.

In The Hill Country of Texas (near Austin and San Antonio) we bought a gracious home on almost 2 acres with a swimming pool. It is new, will cost us around 40% of what our home in Wilmette just sold for and the property taxes are 1/3rd of what they are here. Crook County's property tax system is a disaster: Wilmette homes near ours sell for 50% more and their property taxes are ½ of ours. Our assessed home value was 50% higher than the sales price. The system is unfair and incompetent.

Our home value is down 40%, our property taxes are up 20% and our local schools have still another referendum on the ballot to increase taxes over 20% in one year. I could go on, but enough is enough. I feel as if we are standing on the deck of the Titanic and I can see the icebergs right in front of us. I will miss our friends a great deal. I have called Illinois home for essentially my entire life. But it is time to go where there is honest, competent and cost effective government. We have chosen to vote with our feet and our wallets. My best to all of you and Good luck!