David From: Give the poor a chance in Illinois
By David From
Posted Feb 24, 2013
Everyone was dismayed by the recent report from Chicago’s Heartland Alliance for Human Needs & Human Rights showing one in three Illinois residents live below or near the poverty level.
This isn’t merely a sobering statistic, but a real human tragedy for millions of our neighbors and an ominous threat to our state’s future. Every day, many of our neighbors are hungry and struggling to find adequate housing and consistent employment so they can provide for themselves and their family.
Unfortunately, these are the very people most hurt by the policies advanced by our current elected leaders in Springfield; the same people they claim to be helping. Bad policy decisions have real impacts on citizens — disproportionately affecting the poorest amongst us.
Higher taxation and overspending are often sold as assistance to the poor in the name of “fairness,” but all too often the reality is the measures are passed to satiate a powerful special interest to the detriment of the poor and working class.
If Illinois policymakers really want to break the cycle of poverty they must stop standing in the way of job creation, entrepreneurship, and better educational options for the children who need it most.
One of the best means of pulling people out of poverty is entrepreneurship. A recent study by the Goldwater Institute shows for every 1 percentage point increase in the average entrepreneurship rate in a state, poverty rate declines by 2 percent. When the poor start companies, they generate income for their household.
Growing those businesses creates jobs for their friends and neighbors while providing their community with services or products they currently lack. This is the very story that made America a great nation and made Illinois the economic powerhouse of the Midwest, but it is disappearing.
Standing in the way of your average Illinois entrepreneur is our high tax rates. The Goldwater Institute also found that for every 1 percent increase in the general tax burden as a percentage of personal income, the number of entrepreneurs in a state decreases by 1 percent.
After all, with less money left in their pockets, would-be entrepreneurs have fewer resources to buy a building, purchase supplies or hire workers.
By raising the personal income tax by 67 percent and corporate income tax by 46 percent in 2010, Illinois is driving away businesses and smothering the sparks of entrepreneurship across the state.
Illinois’ tax policy is just one of the misguided policies hurting families leaving them in poverty. Illinois’ massive debt, fueled by years of overspending, and its unsustainable retirement benefit guarantees to government employees have produced $97 billion in unfunded pension liabilities and $9 billion in unpaid bills.
The escalating payments required each and every year to pay our growing fiscal burden crowd out spending on necessary government programs like educating our children.
Simply put, the greatest civil rights issue of our day is whether a child can be denied a quality education solely based upon where that student lives. There are few better ways to break the bonds of poverty than receiving a good education.
However, our leaders in Springfield have consistently chosen the powerful teachers’ unions over these children, trapping them in failing schools and the cycle of poverty by opposing education innovation or the option to attend the school of their choosing.
It wasn’t long ago that Illinois was the economic engine of America’s heartland. It can be again if policymakers in Springfield turn from their traditional high tax and overspending habits, to policies that will unleash the creative genius and entrepreneurial spirit in Illinoisans across the state.
This is not only best way to alter the future of Illinois, but it is the pathway by which many of those living in poverty will be able to climb out of their current circumstances and realize their dreams.
David From is the Illinois state director for Americans for Prosperity, a non-profit group committed to promoting economic freedom.