For years, South Dakota’s been pilfing jobs from high-tax Minnesota for years, in a campaign that features radio ads and billboards around the Twin Cities comparing the states’ various, very different tax philosophies.
It looks like we’ll be seeing more of these campaigns. John Edwards was right – there are Two Americas. One of them is the states that’ll deal with budget deficits by cutting their spending. The other will do it by raising taxes.
Wisconsin is in the first America. Illinois – which just passed a series of tax hikes that have Genghis Khan’s ghost coming back from the great beyond to tell the Illinois legislature “look, subjects can only pay so much tribute…”
Kim Strassel notes the contrast:
Illinois this week earned the honor of becoming the first state in 2011 to sock it to taxpayers, passing a tax hike the size of Lake Michigan. Citizens cried out, legislators deflected, but the most interesting response came from neighboring Wisconsin, where newly elected GOP Gov. Scott Walker had three words for Illinois businesses: “Escape to Wisconsin.”
Across the country, dozens of new governors are taking office, fine-tuning state-of-the-state addresses, polishing budgets. With each event we are seeing a growing national divide.
On one side are wide swathes of the country that this past midterm elected reformers intent on slashing spending and reviving growth. On the other are the holdout pockets—Illinois, California, Massachusetts, Connecticut—drifting further into the abyss of tax and spend. The chasm has huge implications, not just for local and regional politics but for Washington.
Mr. Walker is painting that gulf as big as the Grand Canyon, this week blitzing the Chicago media markets to let suffering Illinois businesses know that while their governor, Pat Quinn, levies a 50% increase in corporate income taxes, Wisconsin is working to enact the total elimination of corporate income taxes for two years for firms that migrate. The “Escape to Wisconsin” line comes from an old tourism campaign, but Mr. Walker thinks it sums up the business choice perfectly. “We’re going to send out that line to every employer in the state of Illinois,” he tells me
Speaking of which – Governor Dayton announced he’ll have a budget ready by February 15. Remember – the Governor has told the Minnesota Chamber of Commerce that business in the state is “undertaxed”. If his “team” does the same job it did over the summer, it’s going to be a long winter for the Administration.
(Perhaps he’ll call his critics “anti-gay”, like he did during the campaign…)
Talk about obtuse. These tax rate increase initiatives rarely if ever raise the revenue projected so the articles I’ve read about this plugging the hole, make that gaping hole, in IL’s fiscal ship are likely bogus from the start.
Some of the (D) legislators are trying to change the subject by noting WI’s top individual income tax rate is already higher – which is true – but the corporate tax will be 2.5% points higher at 9.5%. That gets beyond what Tony Soprano might call “wetting the beak”.
Some articles I’ve read by the statist media types have found obscure professors who claim this won’t affect business too much – the relocation and start up costs are not worth moving for. But believe me, after California raised its tax on inventory for the umpteenth time, the business I work for relocated our LA service center (and it’s 60 jobs) to tax friendly Nevada. The move paid for itself with tax savings it’s third year. You rarely get that quick of a payback on any investment.
Heard this morning that Lockheed Martin is pulling up stakes (read 1000 high paying jobs) in Egan and heading off to parts unknown.
When Delta bought Northwest where did they locate their headquarters (and thousands of jobs)? It wasn’t Chicago. It was a city down in Dixie. They have a lower business tax rate than Minnesota. They have a NFL football team that’s playing this weekend. Sorry Packers.
On behalf of the Packers, I accept your apology for being a dimwit, Kerm.
As part owner of Green Bay Packers Inc, I would like to say I am happy with both the success of my company, and also with the moves that the new government of Wisconsin is doing. Another example? The Democrats raised the minimum car insurance requirements last year, causing additional expense for all drivers. The new Republican legislature may repeal the requirements. This will save Wisc drivers money, while still preserving basic insurance requirements.
Of course now WI will have to deal with the FIB’s/da Bears fans coming to their state. Depending on what Gov. JimBeam does, Zygi may start discussions with officials in Hudson, WI to move the Vikes to ‘Sconnie.
On behalf of the Falcons I will bear witness to Learned Foot eating crow, smothered with Velveeta on Monday. That should give him time to recover from the hangover.
Zygi may start discussions with officials in Hudson, WI to move the Vikes to ‘Sconnie.
Over Learned Foots green and gold dead body.
Oops! Are we getting into Vitriolic Rhetoric ™? Someone notify Congress. We may have to have a committee investigate the negative influence of the NFL on the public.
I heard a snippet of Mitch Daniels on WLS radio last week essentially laughing at Illinois for their tax policy. This after giving a SOTS speech where he insisted taxes wouldn’t go up and education reform was in his crosshairs. (Apologies for the violent rhetoric).
Illinois, Michigan, and possibly Minnesota will become the pariahs of the midwest if they don’t figure things out soon.
For the record, falcon smothered in Velveeta tastes awful.