Chicago's Economic Implosion

From Chicago Contrarian we get an update on the bleak situation in Chicago. Chicago’s Self-Inflicted Financial Death Spiral

Chicago’s chronic reliance on ever‑higher taxes and fees is driving away jobs, investment, and residents at the very moment the city can least afford it. In a world where capital and talent are more mobile than ever, Chicago is choosing policies that make the city less economically competitive. Of course the corrosive impact of Chicago’s policies have been made worse by similar state policies that have made Illinois residents and businesses paying the highest taxes and fees in the nation.

Businesses and people have been moving away from Chicago and Illinois for a while. I worked for a company that moved out of the city in the 1980s to escape taxes. One of the recent high profile examples is when Ken Griffin moved his Citadel hedge fund (and its employees and their taxes, not to mention his taxes and donations) from Chicago to Miami. That is not the only example.

Policies like the corporate head tax and the expanded tax on cloud services send a simple, damaging signal: Chicago is a more expensive and less welcoming place to do business than rival metros in Texas, Florida, Tennessee, and other areas of the Southeast.

This is at a time when the current mayor is rolling out the red carpet for illegal aliens (still), and the city's pension funds are not really capable of paying their promised pensions. (See Meep for more on that.)

But all of these policies and "runaway spending" are chasing the wealthy out of Chicago and out of Illinois.

The story of Ken Griffin — formerly Illinois’ wealthiest resident and a major donor to the city’s cultural life — is a case in point. Griffin’s story illustrates how just one person’s departure can mean the loss of hundreds of millions in tax revenue and economic activity. Griffin alone reportedly paid over $1 billion in state income taxes during the past decade. And he didn’t leave alone. Griffin’s 10,000 employees, their salaries, and their purchasing power left along with him.

Again, he is only one example. Click thru for the rest of the insanity.