03/23/2014
Mike Regan
With respect to House Speaker Mike Madigan’s Millionaire Tax proposal, it is obvious that the Speaker either cannot read, or (the more plausible explanation) chooses to ignore the charts/data points about what happens when states implement a Millionaire’s Tax (or some derivative thereof). After all, it is not like it hasn’t been tried before.
For example, after New Jersey implemented their Millionaire Tax, the news articles initially maintained that it had a minimal impact on the State. Now, years later, in 2014, a study that was published on CNBC’s website indicates that the imposition of this tax has had an impact on the number of wealthy individuals who choose to live in the state. Guess what? A lot of wealth has moved out of that state.
While the study itself mentions that portions of their conclusions are based on anecdotal information, the chart that the Speaker should pay attention to is the United Van Lines Migration Report, which highlights migration patterns in the United States. Guess which two states have consistently ranked at the top for families leaving their states? Illinois and New Jersey. In looking at what happens in other states where politicians feel they have carte blanche to attack the wealthy through the imposition of higher taxes (e.g. Maryland), the pattern holds true: People/families will move when they believe they are being unfairly singled out because of their wealth.
I have said before, if Illinois passes a progressive income tax measure, it will be the death knell for this state. I believe this comment would also hold true if Madigan’s Millionaire Tax proposal passes. I understand that the Speaker’s proposal may resonate with his Democratic constituents and is politically expedient. What the Speaker and his constituents may not understand is that with wealth comes options – and one of those options involves moving to/living in states that have a fair tax structure and welcome all individuals – regardless of wealth.
What the Speaker and his friends also overlook is the impact that technology has in enabling options about where you can live. With today’s Internet, emails and videoconferencing capabilities (to name but a few of the tools out there), I don’t need to be a resident of the State of Illinois in order to conduct or run my business in the United States.
I love the city of Chicago and the State of Illinois, but it’s obvious that the Democratic-controlled legislature and our current governor are looking for the easy way out. Instead of confronting their constituents with painful spending cuts that they know will be unpopular, or the ticking time bomb of underfunded pension obligations that will alienate the public unions, they will engage in class warfare and continue to try and pass legislation that punishes people who have been successful. Politically speaking, it makes sense because there are far fewer voters in the millionaire class, but practically speaking, it will serve to remind those members of the millionaire class that they are not welcome in the State of Illinois.
One final note. In his press conference announcing the Millionaire’s Tax, Madigan stated: “Well, if they’re in Illinois today they’re probably so much in love with Illinois that they’re not going to leave.” Now that he has thrown down the gauntlet, may I suggest that the Speaker go to the Internet and Google the phrase: “States with no personal Income tax.” Then, he should pull out a map and locate states like Florida, Texas and Nevada, all of whom who are more than willing to open their arms and embrace the members of the millionaire class. With the savings on taxes, people can afford nice places – and the weather tends to be milder during the winter.
So while my friends and I really do love Illinois, Speaker Madigan and his friends may want to ask themselves this question when they vote for the Millionaire’s Tax: After Illinois loses a lot of talent, lots of job-creating entrepreneurs, and lots of philanthropically-oriented people who have served the once great State of Illinois, who will remain? For me, it is not a pretty picture because it represents a state with little hope and a dim future.
Mike Regan is the co-founder of Tranzact Technologies, a 30 year old Illinois-based company that helps its customers reduce their freight costs.
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Mike Regan is the co-founder of Tranzact Technologies, a 30 year old Illinois-based company that helps its customers reduce their freight costs.