February 28, 2008: An Update from the Institute

I Vant...To Drink...Your Income Taxes

By Greg Blankenship, President

Yesterday in Springfield, the Senate Education Committee began hearings on a brand new version of a really, really bad idea: the dreaded tax swap.  Last time we battled this was in the spring of 2006.  Prior to that, it was in 2003.  Prior to that . . . well, you get the picture. This thing has more lives than a cat, and more versions than a bad 1950's Dracula movie-and it's just about as predictable too. 

At first, the idea of swapping property taxes for income taxes may sound appealing.  I mean, hey, no one likes paying property taxes, and in Illinois the personal income tax is only 3%. Raising income taxes to 5% for a 25% reduction in that dreaded property tax check you write twice a year doesn't sound so bad.  However, just like the Governor in his bait and switch budget address last week -- the one where he proposed $1.5 billion in tax cuts in exchange for $1.8 billion in tax increases -- proponents of tax swaps are only telling half the story.  When all is said and done, the deal doesn't look so good.  Unless, that is, you think a $3 to $5 billion tax hike is a good deal.
 
That's right. This bill is a real bloodsucker.  With the tax swap, we'll not only send more money to Springfield, but we'll also discover that the so-called property tax relief isn't really a cut.  Your bill remains the same, but the state sets up a fund . . . and from that fund, a portion of your property taxes will be paid by the state.  Of course, that doesn't mean property taxes can't rise locally.  And, by the way, there is nothing to stop our friends in Springfield from raiding that very fund and reducing their portion of your taxes at the first opportunity.

But, wait, there's more!

The tax swap would also strip local control away from school districts and parents, with all education dollars moving to Springfield, where teachers unions and administrators can work behind closed doors.  The number one predictor of student achievement, as we all know, is parental involvement.  Moving decisions away from parents and to Springfield will make things worse, not better, for families.  Meanwhile, the income tax -- which the tax swap would hike -- is an economically dreadful tax that punishes hard work and is vulnerable to swings in the economy.  This means every time there's a slowdown, we'll be hiking taxes "for the kids." 

So, despite its colossal, utter, and total awfulness, the tax swap is back.  What to make of it? This time, according to the rumor mill, there will be a "fix" so that those of us who opposed the idea in the past will be fond of it today. 

You know, when I think about it, I've seen this one before too.  It was the "Son of Dracula." In the end, I think, he was staked in the heart.  Or maybe he was burned by the sun.  No matter.  Either way, he died in dramatic fashion.  Let's make some noise and hope the tax swap follows the plot of yet another bad Dracula movie . . . and bites the dust in the end. 

The Political Vise: A Formula to Win

By John Tillman, Chairman and CEO

Have you ever noticed that when conservatives get elected, they tend to start drifting leftward?  And that when liberals get elected, they tend to move to the left too?  

It's because of the political vise.  It's invisible but powerful, and it determines most of the legislative outcomes today.

You have likely seen or used a vise at some point.  You put something in it and turn the lever until the thing held within the vise gets squeezed.  Some of us have memories of abusing vises -- crushing apples, say, or pencils, or peanut butter sandwiches -- in high school shop class.  (Not me, of course . . .)

The more you turn the lever, the more the thing in the vise is squeezed.  Pretty soon that thing, whatever it may be, becomes slowly distorted from what it originally was.  A fine pipe, shiny, cylindrical and strong, is soon flattened into an unrecognizable shape.  It becomes useless for its original purpose -- kind of like some so-called "conservative" politicians who get elected and soon become useless once the political squeezing starts.

Political decision makers are a lot like that pipe.  They, too, appear shiny and strong when running for office.  However, from the moment they are sworn in, whether Republican or Democrat, political decision makers are in the vise, forever getting squeezed.  Only those committed to principles -- and these politicians are few and far between -- can withstand the pressure.  The rest collapse, much like that pipe (or, for that matter, a shop class peanut butter sandwich) into something useless from his or her original purpose.

Here are the key questions:  Who is doing the squeezing?  Who turns the levers?

The political vise has three sides with three levers.  The three levers are public opinion, the media, and influencers (lobbyists, union leaders, community leaders, activists, government officials, government bureaucrats, average citizens, etc.).

It's important to note that the key lever is the one controlled by the third group, the influencers.  They not only apply pressure to political decision makers inside the vise, but they also apply pressure (and create interest and agitation) with both public opinion and the media.

And right now, these three levers, especially the "influencer" lever, are predominately controlled by left-leaning people and organizations that understand how the vise works. The reason the liberty movement has so much trouble getting policy into place is that we ignore this vise -- most, in fact, are not even aware it exists -- and we place our political hope (ah, hope) in a party and in candidates.

This is a losing proposition.  In the end, political decision makers make decisions based upon three things:  fear, expediency or principle.  There are very few with strong, liberty-oriented principles who can withstand the pressure within the vise.  To win, we have to turn the levers ourselves and begin applying pressure -- pressure that makes liberty principles the expedient thing to do, or makes decision makers fear the consequence of going against these principles.
 
We know the vice is there.  We just need to get together and use it.  Instead of placing all of our hope in politicians and parties, we need to organize, get our hands on the levers, turn the vise . . . and start squeezing for liberty.

Questions?  Comments?  Want to get involved?  Please contact John Tillman at jtillman@illinoispolicyinstitute.org.

 In Memory of William F. Buckley Jr.

The Illinois Policy Institute is saddened by the loss of one of liberty's great defenders:  William F. Buckley Jr.  One of the best communicators of liberty-based ideas in the 20th century -- and into the 21st -- Buckley made an incredible impact on the political debate in our country and paved the way for many positive policy solutions.   We wish the best to his family and friends, and hope that we can continue to build upon his legacy by spreading the ideas of freedom right here in Illinois.