Just look how things are working out for one of the most liberal states in the country:

Though too few noticed, this month Moody’s downgraded Illinois state debt to A2 from A1, the lowest among the 50 states. That’s worse even than California. The state’s cost of borrowing for $800 million of new 10-year general obligation bonds rose to 3.1%—which is 110 basis points higher than the 2% on top-rated 10-year bonds of more financially secure states.

This wasn’t supposed to happen. Only a year ago, Governor Pat Quinn and his fellow Democrats raised individual income taxes by 67% and the corporate tax rate by 46%. They did it to raise $7 billion in revenue, as the Governor put it, to “get Illinois back on fiscal sound footing” and improve the state’s credit rating.

So much for that. In its downgrade statement, Moody’s panned Illinois lawmakers for “a legislative session in which the state took no steps to implement lasting solutions to its severe pension underfunding or to its chronic bill payment delays.” An analysis by Bloomberg finds that the assets in the pension fund will only cover “45% of projected liabilities, the least of any state.” And—no surprise—in part because the tax increases have caused companies to leave Illinois, the state budget office confesses that as of this month the state still has $6.8 billion in unpaid bills and unaddressed obligations.

How much more evidence do we need that high taxes and big government are unsustainable?  Do liberals even care?

Liberal’s solution to everything:  higher taxes.  Let’s see how that’s working out in President Obama’s home state:

As WBBM Newsradio’s Regine Schlesinger reports, officially, the state [of Illinois] has a backlog of more than $4.25 billion in unpaid bills.

But Illinois State Comptroller Judy Baar Topinka says when one factors in other bills, the figure is closer to around $8.5 billion.

Topinka says this is extremely disappointing, since a year ago, the state sharply increased income taxes (by 67 percent) and corporate taxes.

“After the largest tax hike in our history, the state continues to be in this precarious fiscal position with persistent payment delays, and frankly, the situation is unlikely to significantly improve in the near term,” she said.

Some state officials say the solution is more borrowing to pay the bills, but Topinka says the solution is to cut spending.

Next time you hear the president talk about how we need to tax more people like Warren Buffett – someone who, as of late, frequently advocates for higher taxation on the rich – should keep this in mind:

The “Buffett Rule” would not tax the vast majority of his shielded income, including either his unrealized capital gains, which are currently taxed at zero percent, or charitable contributions, which are tax deductible.

If the “Buffett Rule” were applied as President Obama proposes, then Mr. Buffett’s federal tax bill would have been $14.4 million, rather than the $6.9 million he actually paid. As a fraction of his true income, his effective tax rate would only have risen from 6/100ths of 1% to 12/100ths of 1%.

 

It turns out that all of Obama’s tax increases wouldn’t actually make any real difference in Buffett’s own taxes.  But the hypocrisy of everyone involved worse:

Mr. Buffett’s donation to the Gates Foundation goes to the heart of my critique of his public call for higher tax rates on the rich. Just look at the second contractual condition for his ongoing pledge to the Gates Foundation: “The foundation must continue to satisfy the legal requirements qualifying Warren’s gift as charitable, exempt from gift or other taxes.”

 

In other words, if his gift weren’t tax sheltered he wouldn’t give it. So much for “shared sacrifice.”

Incidentally, I’m not the first to question Mr. Buffett’s commitment to “shared sacrifice” in balancing the federal budget. In a 2007 CNBC interview, when asked why he shelters his money through tax-free strategies rather than writing big checks to Uncle Sam, Mr. Buffett responded: “I think that on balance the Gates Foundation, my daughter’s foundation, my two sons’ foundations will do a better job with lower administrative costs and better selection of beneficiaries than the government.”

So Mr. Buffett thinks he and his family can put their money to better use than the government can. I guess he’s really not so different from the rest of us after all.

So Mr. Buffett isn’t really being honest with us after all… and neither is Obama.  The richest 1% will continue to shelter their income with the help of an army of lawyers and accountants… and the hard-working upper-middle class who makes more than 250 thousand dollars… THEY will get foot with the bill.  So much for ‘shared sacrifice’.

Via Class Warefare and the Buffett Rule — on WSJ.com