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Lake Geneva Chiropractic

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January 19, 2011 | 08:13 AM
Back in the 1980s, Illinois Gov. James Thompson ordered the placement of a billboard on the Illinois-Wisconsin border, which read "Would the last business to leave Wisconsin please turn out the lights?" The action and the message sparked yet another rivalry between the two states, as Wisconsin's economy struggled and businesses considered moving to more tax-friendly states, such as Illinois.

But in an ironic twist, all of that may soon change as the state of Illinois recently enacted massive tax increases, which could send business to other states, including Wisconsin.

Following the November election and before newly-elected lawmakers could take office, the Illinois legislature narrowly adopted and the governor is expected to enact into law a series of tax hikes, along with new spending and borrowing increases.

The 'lame duck' session bill increases state spending by 10 percent, raises the personal income tax rate by 67 percent, raises the corporate tax rate by 46 percent, and allows for new borrowing of approximately $4 billion. The personal income tax hike alone will increase the burden for an average family of four by more than $1,000. All of this is bad news for Illinois, but welcome news for Wisconsin.

This month here in Wisconsin, the governor and legislature are rolling out a number of proposals to create jobs, grow the economy, and reform the way in which government works. Our focus is to help businesses of all sizes by creating tax incentives, streamlining onerous regulations, and establishing more reasonable standards for litigation. The message is making Wisconsin open for business, and the actions by Illinois to effectively do the opposite may create new opportunities for economic growth; our job to help Wisconsin businesses create jobs may have just become much easier.

As a legislator who represents a border district, I know all too well how other states — especially Illinois — have been able to lure companies and individuals away; most notably, by capitalizing on our high tax rate. I am constantly reminded by neighbors, local shop owners, and people on the street of their burden with state and local taxes, and how they may be forced to pull up stakes and move someplace else. Those reminders are the reason why I have advocated for and authored a bill to virtually eliminate state taxation of retirement income. Most of our neighboring states do not tax retirement income, or at least allow for a certain amount of income to be tax exempt. Wisconsin has yet to take such action, but I will continue to work to see this through.

Like Wisconsin, Illinois is struggling to balance its state budget and deal with a huge budget deficit. The move to raise taxes to this new height is their attempt to do so, but during these uncertain economic times, tax and spending increases are the worst possible decisions.

On paper, they may solve their short-term problem, but on the ground, it will be an entirely different story. Business leaders are influenced by the tax and regulatory climate of states and largely make their decision to remain or relocate there based on those factors. Wisconsin has started on a path to reposition itself as a place where business is welcome and massive expansions of government are a thing of the past.

While it may be too soon to determine the immediate effect this action by our friends to the south will have on the economies of both states, the bottom line is Wisconsin and Illinois government are moving in different directions. We will continue to move in the direction of helping the private sector grow and expand their workforce, be they Packers, Brewers, Bears or Cubs fans. The lights are on in Wisconsin, and we we will keep them burning for some time to come.

Kedzie can be reached in Madison at P.O. Box 7882, Madison, WI, 53707-7882, or by calling toll-free (800) 578-1457. He may be reached in the district at (262) 742-2025 or on-line at www.senatorkedzie.com.

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