Some states are on the brink of bankruptcy. Why? Because deficit spending, caused some of them to raise taxes and fees. The hike in the costs of taxes and fees, coupled with additional restrictions placed on profitable practices through ever increasing regulations, caused businesses to move out of these states. Business taxes the states would have otherwise collected from the moved businesses evaporate, as do the personal income taxes that would have been collected from former employees of the relocated businesses. Rather than taking in taxes from working people, the already financially strapped states are paying out unemployment insurance. Add to that the unfunded costs of Ponzi scheme public union pension funds, and you have the perfect recipe for state bankruptcy.
Transfer that recipe from a single state to Washington DC and you have a major problem.
Have you ever heard the phrase: If what you’re doing isn’t working, it’s time to try something else? If increased taxes, fees and regulations are driving business away; the logical alternative is: to lower taxes, cut fees and reduce regulations. More importantly, eliminate the root of the problem. Stop spending money you don’t have and you won’t “need” to raise taxes. When your expenditures exceed your income, cut spending. While you’re at it, eliminate the unnecessary costs of union labor in the public sector. The extortion of public employee collective bargaining practices, combined with their quid pro quo relationship with politicians of votes in exchange for non-stop escalating salaries and unfunded pension liabilities placed on the back of the state, and by extension, the taxpayer, is a formula for long term economic disaster.
Keep a weather eye on the states of Illinois and New Jersey. Illinois’s taking the higher tax route, while New Jersey is going in the opposite direction. The federalist laboratory of state experimentation will be quite instructive to the rest of the country.
I’m willing to bet that the “progressive” party and their multiple media Pavlovian lapdogs will be salivating over… I mean editorializing on behalf of Illinois.
My money’s on New Jersey.