Illinois Lawmakers to Millionaires: Get Out!

In what appears to be part of a

full-fledged class warfare strategy that includes comparing
Republican gubernatorial candidate Bruce Rauner to C. Montgomery
Burns of The Simpsons, Illinois Democrats propose a
referendum on imposing a “millionaires tax” targeted at high-income
state residents. In a state that has already enjoyed
government credit downgrades with
little expectation of improvement for poor habits, including
putting off paying its bills into the murky future and not funding
public pensions, the move could raise fears that politicians plan
to resolve their own failures by mugging anybody with assets to
speak of (not that it’s
easy to accumulate assets in Illinois). It just could send the
targets of the millionaires tax heading for the exits, as they’ve
already done in New Jersey.

Earlier this year, financial firm RegentAtlantic
reported that New Jersey is suffering a net loss of taxpayers and
adjusted gross income to lower-tax states, and that “the
average income coming into New Jersey is approximately 50 percent
less than the income that is leaving.” Overall, the company found
that the state lost taxable income of $5.5 billion in 2010 as
residents moved to relative tax havens.

Note that New Jersey ranks at 44 out of 51 jurisdictions in
WalletHub’s
recent ratings of tax burdens (1 is the least burdensome).
Illinois comes in at 47.

By contrast with New Jersey, Stanford University reports that
high tax rates
don’t drive the highest earners to flee California.
But Illinois doesn’t quite have California’s natural attractions,
for which wealthy people may be willing to pay a premium.

And California is still
hemorrhaging money and people as many seek tax relief and

opportunity, even if millionaires are willing to stick around
for the nice views. If Illinois can’t find itself some redwoods and
pretty coastline, and quick, look for a line at the exits.