Wisconsin Moves Quickly to Capitalize on Illinois Tax Hikes

If you live or have a business in the greater Chicago area the tax haven of Wisconsin is just a few miles away:

Illinois this week earned the honor of becoming the first state in 2011 to sock it to taxpayers, passing a tax hike the size of Lake Michigan. Citizens cried out, legislators deflected, but the most interesting response came from neighboring Wisconsin, where newly elected GOP Gov. Scott Walker had three words for Illinois businesses: "Escape to Wisconsin."

Across the country, dozens of new governors are taking office, fine-tuning state-of-the-state addresses, polishing budgets. With each event we are seeing a growing national divide.

On one side are wide swathes of the country that this past midterm elected reformers intent on slashing spending and reviving growth. On the other are the holdout pockets—Illinois, California, Massachusetts, Connecticut—drifting further into the abyss of tax and spend. The chasm has huge implications, not just for local and regional politics but for Washington.

Mr. Walker is painting that gulf as big as the Grand Canyon, this week blitzing the Chicago media markets to let suffering Illinois businesses know that while their governor, Pat Quinn, levies a 50% increase in corporate income taxes, Wisconsin is working to enact the total elimination of corporate income taxes for two years for firms that migrate. The "Escape to Wisconsin" line comes from an old tourism campaign, but Mr. Walker thinks it sums up the business choice perfectly. "We're going to send out that line to every employer in the state of Illinois," he tells me.

Gov. Walker is earning his money and the people of Wisconsin will benefit. Of course, new Chicago boss Rahm Emanuel might deploy the National Guard to the border, but I think a great many folks from Illinois will be exploring the real estate and business market in their neighbor to the north. And probably the west...and east...and south.