By Douglas V. Gibbs
The states are sovereign, acting as individual entities in a union of states under the United States Constitution. State's rights, like individual rights, comes with a certain amount of responsibility, and failure to act in a responsible manner can result in unwanted circumstances. As sovereign states, the states of the union compete with each other for population, and businesses. If a state begins to act in a manner that is not acceptable to the populace, or to businesses, the citizenry has a menu of three choices to choose from. They can work to change the state laws to something more acceptable, put up and shut up, or vote with their feet and go to a state more in line with their political desires.
During the 1800s, the eastern states imposed high taxes, and strong regulations. With the promise of free land to the west, it didn't take much for the pioneers to decide to vote with their feet and head west. In today's climate, liberal states are losing middle class, upper class, and business populations, while attracting lower class populations because of their entitlement programs. Red States are receiving hard working Americans in droves, while also enticing businesses to come to them for their lower taxes, and reduced regulations against business.
High taxes and heavy regulations creates a "push factor" that literally pushes people and businesses out of a state. Lower taxes, and minimal regulations, creates a "pull factor" that entices the migration of populace and businesses to come to a state. Illinois, with its continuous hikes in taxes and regulations (spurred by liberal thinking, of course) has created a "push factor" that has grown to the point that now Illinois is losing some of the "big boys."
The chairman and CEO Caterpillar Inc., based in Peoria, Illinois, has made the suggestion that Caterpillar is considering moving the heavy equipment maker out of Illinois. The possible decision to get out of the tax and regulation oppressive State of Illinois emerged in a letter last week to Governor Pat Quinn, by Caterpillar chief executive officer Doug Oberhelman, indicating that at least four other states have approached the company about relocating since Illinois raised its income tax in January.
"I want to stay here. But as the leader of this business, I have to do what's right for Caterpillar when making decisions about where to invest," Doug Oberhelman wrote in the letter. "The direction that this state is headed in is not favorable to business and I'd like to work with you to change that."
While other states court Oberhelman to move his company, Illinois faces the reality that if they do not change the business climate into something more favorable, Caterpillar will leave, and with them gone, other businesses may follow suit. Illinois' task is to either find solutions that benefit businesses, or lose companies that bring in revenue, and employ thousands of the state's citizens (which then could result in citizens voting with their feet out of the state in search of work).
The letter offers help, before Caterpillar runs off. In other words, "Let's work to make Illinois more hospitable to business, or risk losing a big player."
Oberhelman's letter did not go through specifics of why Caterpillar was considering the move, other than the recent income tax increase, signed into law by Quinn in January, as playing a significant role in triggering the consideration.
This is nothing new. California has been losing businesses in droves over the last two decades with its incredibly high taxes, and heavy anti-business regulations, leaving the state with one of the highest unemployment rates in the nation, and a shortfall in revenue that now has the state cornered, and forced to take drastic measures to avoid bankruptcy.
In the case of Illinois, thanks to their tax hike, Wisconsin, Indiana and New Jersey, have been trying to convince companies that don't want to stay in the Land of Lincoln to come to their states.
State sovereignty is much like a free market, and Illinois is learning that as a hard lesson.
Caterpillar has received enticements from a number of states, including Texas, South Dakota, Nebraska, and God only knows how many other states.
As hundreds of businesses are being wooed away from Illinois, as Illinois continues to make Illinois a hostile environment for businesses, the State of Illinois is learning a truth that Political Pistachio readers learned long ago: "Liberalism fails wherever it is tried."
-- Political Pistachio Conservative News and Commentary
Caterpillar CEO's letter talks of leaving Illinois - Pantagraph
2 comments:
The really funny thing about this.. is that Illinois tax rate, even after the tax increase they passed in order to try and balance their budge, is still lower than New Jersey.
I guess you didn't see the news when Christie went to Chicago to try and lure some business - and then was embarrassed to discover his state has a higher corporate tax index.
Sometimes fact-checking can be revealing. Like if you look into what's going on in Texas for example, or you compare liberal states to conservative states in the important metrics.
By the way.. Texas has a "welfare" program too. It's not just the "liberal" states. It's massive, and includes food stamps, housing, Medicaid, and other social services such as drug addiction treatment.
You seem to think the "conservative" states don't have those things. They all do in one form or another.
You are correct, New Jersey's is higher, and that is the result of continuous liberal leadership over the decades. Christie has a huge mountain to overcome, and is continuing to work to get that state under control. As New Jersey works to find sanity, Illinois is dropping into a pit. The states that are working away from liberalism, rather than embracing it, will benefit as population and businesses flee Illinois as they have been doing to California for years.
Yes, all states have welfare programs, and the majority of large cities suffer for it. However, the states that have reformed the programs, and are working to make the entitlements obsolete as the population embraces personal responsibility again, will be the states that will prosper in the long run.
Simply put, spending more than you have coming in is unsustainable, and trying to increase revenue by increasing taxes creates the opposite results because anytime to increase the taxes on something, you cause less production or use of whatever it is being taxed.
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