Will McArdle Rethink Her Endorsement of Higher Taxes for Illinois?
By David Henderson
In a post back in January, “McArdle Waves the White Flag,” I questioned Megan McArdle’s view that it was a good idea for the Illinois government to raise income tax rates substantially. At the time, she saw the tax increases as necessary because people had “planned their lives around” the various state government spending programs that those tax revenues finance. But the Illinois government has been turning state tax revenue into subsidies and tax breaks for Illinois companies that threaten to move in response to the higher corporate income tax rates. See today’s Wall Street Journal editorial, “Illinois Tax Firesale,” for more details. So the net revenues, net, that is, of the subsidies and tax breaks, expected from the tax rate increases, will not be as large as she had expected.
Here’s what I wonder: does this use of tax funds to discriminate in favor of particular firms cause Megan to, in any way, question her previous endorsement of the tax increases?