Marathon Pundit: Race to the bottom: Business executives rank IL third worst for business climate

Friday, May 04, 2012

Race to the bottom: Business executives rank IL third worst for business climate

See what tax hikes have done for Illinois.

From the Washington Examiner:

Illinois may share borders with Wisconsin and Indiana, but the states are moving in opposite directions. As Republican Govs. Scott Walker of Wisconsin and Mitch Daniels of Indiana have sought to reduce the regulatory burden on businesses and keep spending at sustainable levels, Illinois Gov. Pat Quinn, a Democrat, is trying to tax his state out of its disastrous fiscal condition. Just last year, for instance, Illinois hiked individual income taxes 66 percent and corporate taxes by 45 percent.

Such choices have consequences. When Chief Executive magazine released its annual rankings of state business climates this week, Indiana placed fifth. Wisconsin moved up four slots to No. 20. For the second year in a row, Illinois finished third-to-last at No. 48.

The magazine's rankings, based on surveys of 650 business leaders, are a telling example of how liberal tax and regulatory policies make it harder for businesses to operate. Seventeen of the 20 most business-friendly states in this ranking have right-to-work laws, which forbid compulsory union membership. By contrast, none of the bottom 20 states are right-to-work states. Three of the top five states -- Texas, Florida and Tennessee -- have no income tax. The bottom four states are all high-tax states (California, New York, Illinois and Massachusetts).

Here's what one CEO told Chief Executive:

Illinois is a great state but the Democrats have ruined the state fiscally and unless they are either elected out or make major changes to the unions problems, corruption and graft, I will move our company out of Illinois permanently.

Illinois is in a race to the bottom.

As I've been reporting lately, the Prairie State's latest caper is to raise the cigarette tax by $1-a-pack. Which will benefit retailers on the other side of the Illinois border. The likely revenue shortfall could end up compelling Democratic politicians to raise other Illinois taxes. It's a vicious cycle.

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