Almost a year ago, lawmakers in Illinois made it easier for states like Oklahoma to recruit businesses from Illinois by significantly increasing both individual and corporate income tax rates. In no doubt a surprise to the left (as they say tax rates do not matter), since the tax hikes took effect the reports of numerous companies looking to move out of Illinois have continued. Illinois Gov. Pat Quinn is now essentially Illinois’ “corporate welfare officer in chief,” spending much of his time trying to keep companies from leaving the state. Who would have thought the “the Land of Lincoln,” a foundation for the effort to eliminate physical human slavery in the U.S., would attempt to lead the current effort towards increasing economic slavery?
For any states looking to increase the presence of the financial sector in their state, you should thank lawmakers from Illinois. Last week, CME Group Chairman Terry Duffy (arguably the leading diverse derivatives marketplace) told an Illinois legislative committee that CME’s shareholders were seriously considering a move due to the Illinois tax hikes resulting in increased taxes of around $50 million for CME alone.
Illinois and other tax increasing states are demonstrating what we all know. You reap what you sow. If you continue to reduce the benefit that someone gets from their labor, eventually they will quit laboring under those conditions. If you increase the benefit that someone gets from their labor, generally you get more of that labor. The good news in all of this is that Oklahoma is poised to do the latter.
Gov. Mary Fallin has clearly stated her wish to phase out the state’s personal income tax, and our corporate income tax is already a full percentage point lower than Illinois. With a metro area that boasts the nation’s lowest costs of living, and some of the nation’s lowest costs for housing and living across the state, Gov. Fallin might have already made a recruiting call to Chairman Duffy and shareholders of CME detailing Oklahoma’s even lower tax future. Sharing the wish of Gov. Fallin, Oklahoma lawmakers like Rep. Tom Newell understand the incredible benefit of phasing out the state’s personal income tax. Lawmakers like Rep. T.W. Shannon, Rep. Leslie Osborne, and Sen. Greg Treat have shown in recent weeks how to prioritize and reduce government spending to make phasing out Oklahoma’s personal income tax a reality.
So once again, Illinois, thanks for showing Oklahoma and every state what not to do, and demonstrating in oh-so-clear terms that you reap what you sow.