Did higher taxes create the Minnesota miracle?

A Better Illinois is claiming that the progressive tax and higher taxes on the wealthy are responsible for the “Minnesota miracle.” But the only marvels here are the impressive contortions they used in concluding that higher taxes is what holds Illinois back from impressive job growth and a budget surplus. The problem with their analysis...

A Better Illinois is claiming that the progressive tax and higher taxes on the wealthy are responsible for the “Minnesota miracle.” But the only marvels here are the impressive contortions they used in concluding that higher taxes is what holds Illinois back from impressive job growth and a budget surplus.

The problem with their analysis is that their ordained state of Minnesota is actually only 12th nationally in payroll growth over the past five years and has only the 20th lowest unemployment rate in the nation. Hardly miraculous.

A Better Illinois selected two comparison states to fit the predetermined conclusion that Illinois would thrive with higher taxes. Not only is this a shameful tactic, the statistics they attempt to use to support their fallacious claim actually show the opposite of what they intended: States with no income tax are thriving.

Comparing Minnesota, Wisconsin and Illinois, they point out that both Minnesota and Wisconsin, which have a progressive tax, have lower unemployment, higher job growth and budget surpluses. They actually go a step further and claim that Minnesota, with the strongest statistics of the three, also imposes additional education taxes on the rich. This much is true.

One glaring omission is that Minnesota just imposed a massive tax hike in the middle of last year. The idea that their strong payroll growth should be somehow attributed to this new tax shows just how far A Better Illinois is willing to go to peddle their misguided and ill-advised tax scheme.

What they fail to point out is how the rest of the country is faring. Wisconsin’s payrolls grew 5 percent over the past five years and Minnesota’s grew by 2.7 percent. But during that same period, Florida payrolls grew by 5.9 percent and Texas payrolls grew by 9.8 percent. In fact, six of the seven states that impose no income tax all achieved payroll growth above 3 percent. And three of those states had payroll growth at or above 5 percent.

The report also includes this gem: “The results of these policies have been spectacular for Minnesota’s economy. Minnesota, along with California (another Fair Tax state that has raised taxes on the wealthy since the Great Recession), is the fifth-fastest growing state economy.” What they fail to point out is that California’s unemployment rate is 8.1 percent – earning the distinction of the fourth-worst in the nation and just a tad better than Illinois’ at 8.9 percent, the third-worst. In fact, California lost almost 3 percent of its total jobs over the past decade, again just trailing Illinois, which lost just over 3 percent of its total jobs.

When it comes to budget surpluses, six of the seven states that impose no income tax also had budget surpluses that were higher than Wisconsin’s 1.9 percent of total expenditures and Minnesota’s 5.8 percent. What’s more, a sound and balanced budget is the result of fiscal discipline. The idea that their massive tax hike, which came into effect last year, is only the direct result of their tax structure is preposterous.

Sadly, Illinois lags behind almost every other state on most job creation and economic growth. Rather than examine which states are thriving and why, A Better Illinois seems to place political ideology above the long-term well-being of Illinois. The question for Illinois citizens is whether they want to be led by the same collection of left-wing special interests that aim to use Illinois as a national poster child for economic stagnation and income redistribution.

Illinois does not need miracles. We need responsible fiscal leadership that reigns in spending and understands that people keeping more of their own money is what drives economic growth and job creation.