|Gov. Quinn of Illinois|
Tax season has started. With that in mind, I wanted to give a shout out to Gov. Pat Quinn and Illinois lawmakers. Earlier this month Gov. Quinn passed a tax increase that is the largest increase in the state’s history. (from 3% to 5%) It may sound strange that I am applauding an increase in taxes, but I give Illinois credit for making some hard decisions that needed to be made. The state now has a $13 Billion debt. (that’s nine zeros) Many states around the country are facing similar budget issues. However most have not come up with a plan to fix the problem. Something has to give. No one wants higher taxes, but they also don’t want budget cuts. Republicans are always talking about cutting government spending. Although I’ve never heard a someone actually say what specific programs should be cut. I’m not saying one way is better then the other, but if you don’t want higher taxes you better prepare for deep budget cuts. Which logically leads toward jobs cuts. So if you had to choose a tax hike or loosing your job…which would you pick? In that light, the idea of a tax increase doesn’t sting as bad. This always makes me think of Southwest Airline. I remember learning in college that the company has a policy where they will not lay anyone off. Instead they have the right to lower wages in order to save jobs. It’s a very interesting policy.
There is a basic rule of finance that I’ve used in my own life. To pay off debt there are three options:
1. Make more money
2. Spend less money
3. A combination of steps 1 and 2