These Illinois Republicans got no concessions in return for selling out.
If Illinois Republicans think they have saved their state credit from being rated as junk, they are deeply deceived. Massive tax hikes will only mean that businesses and residents flee the state in greater numbers. Thus, revenue for the state will decrease while the debt becomes worse. If ratings agencies don’t downgrade Illinois bonds it will prove they are more influenced by politics than by economic reality.
The role of the Republican governor in all this is a question. Illinois resident and economic blogger Mike “Mish” Shedlock blamed him Saturday: “Illinois Taxoholics Wear Down Rauner: Massive Tax Hikes In the Works.”
Total capitulation by Governor Bruce Rauner is in the works. The taxoholics wore him down.
In the emergency session, Rauner has agreed to hike the personal income tax rate to 4.95% from the current 3.75%. The corporate income tax rate will rise to 7% from the current 5.25% rate.
For what? Nothing. Reforms are nonexistent.
But, today, the St. Louis Post-Dispatch reports that the governor is fighting the taxes: “Illinois House approves major income tax hike as Republicans break with Rauner.”
The Illinois House on Sunday approved a major income tax increase as several Republicans broke ranks with Gov. Bruce Rauner amid the intense pressure of a budget impasse that’s entered its third year.
Rauner immediately vowed to veto the measure should the Illinois Senate approve it.
“Under Speaker Madigan’s direction, legislators chose to double down on higher taxes while protecting the special interests and refusing to reform the status quo. It’s a repeat of the failed policies that created this financial crisis and caused jobs and taxpayers to flee” Rauner said in a statement.
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