The Daily Parker

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Illinois' population decline isn't actually a problem

Tim Jones, writing in Crain's for the Better Government Association, says the experiences of Minnesota and Kansas put the lie to claims that people are leaving Illinois because of taxes:

The scapegoat nominees include not just high taxes but House Speaker Michael Madigan, Gov. Bruce Rauner, government regulations, financial chaos and uncertainty from a two-year budget stalemate, not to mention old standbys greed and corruption.

That's where Minnesota looms as a spoiler of the tax-cutting political narrative embraced by many Midwestern states. Minnesota is a high-tax state, rated the sixth-highest in the nation in state and local individual income tax collections per capita and eighth in the combined state and local tax burden, according to the most recent rankings of the Washington-based Tax Foundation.

Minnesota has a graduated income tax, with rates ranging from 5.35 percent for those of modest incomes to 9.85 percent for individuals with annual incomes above $156,000.

The Tax Foundation ranked Minnesota's overall business tax climate among the nation's worst. Even so, the state was among Midwestern leaders in population growth, with a 5.1 percent gain since 2010 and a 13.3 percent jump since 2000. The state also has the highest median household income and the lowest poverty rate.

Focusing on taxation produces a distorted picture, said Larry Jacobs, a political science professor at the University of Minnesota.

“Clearly in Minnesota there are other things going on. Taxes are one component but also jobs, wages, quality of life, the education system,” Jacobs said.

The flip side of the taxation narrative, put into action by Kansas six years ago, is that cutting taxes will give a jolt to economic development and drive population growth. But it did neither, and Republicans who control the legislature had to backtrack on the tax cuts last year when revenue loss became untenable.

See, taxes pay for things that people want and need, like transport, schools, and police. Cutting taxes, as Kansas demonstrated, means you can't pay for those things anymore. Then people don't want to live there. QED. I'm not wild about higher taxes in general, but I understand we all need to pay them to get better living conditions. I hope that J.B. Pritzker makes that point as he runs for governor this fall.

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