SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Trib praises Cullerton as Hell’s temperature begins to drop

Wednesday, Mar 9, 2011

* Miracle upon miracles, the Tribune editorial page actually praised Senate President Cullerton today

John Cullerton, president of the Illinois Senate, committed a dreadful sin Monday. During a speech that could have been titled “State Finance 101,” the Chicago Democrat briefly mentioned that if Illinois taxed retirement income, Springfield would collect some $1.6 billion a year.

Can you believe that? A politician dared to mention taxing a powerful voting bloc! The lecture Cullerton wasn’t delivering Monday, “Politics 101,” dictates that talk of taxing seniors is verboten.

The accompanying photo wasn’t exactly flattering…

Oof. He looks like an unsober fop in that pic. Let’s avoid captions, please. Wouldn’t be fair. And I don’t have time to police them.

* Regardless of that photo, it’s hard to disagree with their conclusion…

Sen. Cullerton, you have a good point. Illinois needs a talk about revising tax policies and rethinking exemptions. Not to grab more from taxpayers, but to broaden the tax base as a matter of fairness. Why should the working family making $50,000 a year pay a tax that the retiree getting $100,000 a year avoids? Credit Cullerton for thinking creatively — and out loud.

I was just on the phone with former Gov. Jim Thompson talking about all the big bills that have been passed during the past few months. Subscribers will see more, but one of the things Thompson emphasized is that we need to broaden the tax base. He was mostly talking about the sales tax. The problem with a narrow, outdated taxing base, he said, is that rates have to be raised on an ever-smaller pot of available money. It makes no sense. Expand the base and then significantly lower overall rates is the better way to go. I’d prefer, however, (and I believe Thompson does as well) that they stick to expanding the base on sales taxes and not mess with the income tax, but it’s the same basic point. Expand the base and lower rates.

The problem with this particular Cullerton idea is that expanding the base will not lower rates if it’s just confined to seniors making over $100K a year. That only brings in $70 million a year. It’s best just to drop it.

* The Sun-Times makes many of the same points today

But the noise should not drown out an important conversation about tax reform. Illinois desperately needs to update its tax system so it is based on ability to pay and targets taxes where the economy is expanding — among the wealthiest, not the poorest. Illinois’ current tax system, anchored by a flat income tax and a narrow sales tax base, disproportionately hits our poorest residents.

Gov. Quinn wants to create a commission to look at ways to update the tax system. We’re all for it, though several good proposals are already well-known. These include changing the state Constitution to allow for a graduated income tax, expanding the sales tax base to reflect our modern service economy (an idea Chicago Mayor-elect Rahm Emanuel supports) and, potentially, taxing some retirement income.

Quinn should’ve appointed that commission a year ago. He’s a bit late now, after raising income tax rates by two points.

The other thing Thompson and I discussed is my belief that it’ll be at least a generation before the citizenry stops being infuriated at this latest tax hike. He agreed. In my own opinion, it was done the wrong way, in every way. The money is needed, to be sure, but this thing is a political disaster.

Discuss.

…Adding… Related…

* Hines: Cullerton not all wrong in pension tax proposal

- Posted by Rich Miller        


34 Comments
  1. - 47th Ward - Wednesday, Mar 9, 11 @ 11:22 am:

    I don’t know Rich. A generation is a long time, long enough for another hike in the tax at some point. I think most voters will use the next two election cycles to make a strong statement about the latest income tax hike, and then it will be done.

    But I’m often wrong.


  2. - Rich Miller - Wednesday, Mar 9, 11 @ 11:25 am:

    ===A generation is a long time, long enough for another hike in the tax at some point. ===

    Two points…

    1) People still complain about the Lottery.

    2) It’s been more than a generation since the last income tax hike.


  3. - Bill - Wednesday, Mar 9, 11 @ 11:28 am:

    Not one legislator who ran for re-election after voting for the last tax increase lost.


  4. - Rich Miller - Wednesday, Mar 9, 11 @ 11:30 am:

    Bill, that was a bipartisan tax hike passed on a structured roll call signed by a Republican governor and supported by his GOP successor. Apples and oranges. Actually, apples and crepes.


  5. - D.P. Gumby - Wednesday, Mar 9, 11 @ 11:31 am:

    I don’t think anyone but the foamers & no-taxers will be ranting once the economy improves. Most people are fed up w/ the inequality in the system and the archaic nature–esp. property taxes for schools–almost to the point of support for a VAT if everything else was scrapped. It’s getting to be a “Fine, take my money, but stop making me suffer while you take it!”


  6. - just sayin' - Wednesday, Mar 9, 11 @ 11:49 am:

    The Dems could pass human sacrifice and the IL GOP would still blow it.

    I don’t see the energy out there for rewarding Republicans for having no plan.


  7. - Responsa - Wednesday, Mar 9, 11 @ 11:52 am:

    ==I don’t think anyone but the foamers & no-taxers will be ranting once the economy improves.==

    OK, that was a joke, right?


  8. - Langhorne - Wednesday, Mar 9, 11 @ 11:55 am:

    gov thompson is right about expanding the sales tax base and has held this position for years. we tax fewer categories under the sales tax than most states. i was at a luncheon with him in the waning days of his governorship and asked him if he had a magic wand and could enact any bill, what would it be. he said expand the sales tax base.


  9. - Captain Angrypants - Wednesday, Mar 9, 11 @ 12:01 pm:

    There’s anger and grumbling about the income tax hike, sure, but the state hasn’t erupted in WI-style capitol protests as a result. Personally, I’m really glad a politician stood up for a tax increase, albeit a temporary one. As has been pointed out here, IL’s tax rates still compare very favorably to it’s neighbors. It’s long past time we were able to have a discussion that doesn’t start with “Any thought of a tax increase is off the table.”


  10. - Rich Miller - Wednesday, Mar 9, 11 @ 12:06 pm:

    ===but the state hasn’t erupted in WI-style capitol protests as a result.===

    That, to me, is not a valid measuring stick. People get angry in different ways, and one of them is to wait for the next election.


  11. - reformer - Wednesday, Mar 9, 11 @ 12:14 pm:

    Every previous income tax hike was bipartisan. This one wasn’t. Under the circumstances, what would have been a better way to enact it? None of Madigan’s targets voted for it, and he draws the new map.


  12. - Rich Miller - Wednesday, Mar 9, 11 @ 12:15 pm:

    ===None of Madigan’s targets voted for it===

    Several folks weren’t targets in the past, but will be now.


  13. - wordslinger - Wednesday, Mar 9, 11 @ 12:23 pm:

    I wouldn’t be surprised to see the state hook up with Emanuel in the next couple years on expansion of sales tax to “luxury” services — limos, elective plastic surgery, nail salons, plus some professional services.

    Was Big Jim cool with taxing legal fees?

    Still, I think there has to be some real heavy lifting on state healthcare costs and pension liability (if possible) before people would go for anything broad.


  14. - Sue - Wednesday, Mar 9, 11 @ 12:37 pm:

    If they expand the tax base by inclusion of retirement income maybe(just maybe) the increase to 5 percent could be temporary as was advertised


  15. - washedmyhands - Wednesday, Mar 9, 11 @ 12:41 pm:

    A suggestion - to keep the pension system afloat - there should be sunset legislation (expires in 5 years) and a graduated pension tax with all proceeds paying for pensions. $30K-$40K starts at .5%. $40 - $50K 1%. $50K - $75K 2%. $75K-$99K 3%. Over $100K ought to be taxed at 5% $125K and up 10%.


  16. - Cook County Commoner - Wednesday, Mar 9, 11 @ 12:50 pm:

    if you want pickets in Springfield, try pulling education out of the property tax. That’ll get you some serious teachers’ union pushback. Cullerton’s thoughts were moderate. No real reform will occur until the property tax is on the table also.


  17. - Captain Angrypants - Wednesday, Mar 9, 11 @ 1:15 pm:

    Rich, perhaps, but given the doomsday scenarios that the other side keeps saying are just over the hill should anyone dare try to raise taxes, it’s nice to know that you can, in fact, raise taxes without having the democratic process explode.


  18. - maddem - Wednesday, Mar 9, 11 @ 1:16 pm:

    OK so lets make a deal. Tax all pensions, except social security (I think FICA contributions were taxed by the state when earned). The money collected from taxing state and local government pensions goes back into the pension system or is used to pay for retiree health insurance. (Is there a breakdown on how much of the pension money is pubic and how much is private?) This is like the federal tax on social security benefits going into the Medicare Trust Fund. Also tax my deferred comp account. That money wasn’t taxed going in by the state, and isn’t taxed coming out. Is private 401(k) money subject to state income tax when earned?


  19. - Mark - Wednesday, Mar 9, 11 @ 1:19 pm:

    Rather than reform the teacher/administrator TRS pension system, Cullerton tosses out a trial balloon to tax all retirement income. The teachers have a union and union dues, the seniors don’t. The problems of TRS go much deeper than the State not making its mandatory contribution. The calculation of that contribution is flawed and burdensome.


  20. - Louis G. Atsaves - Wednesday, Mar 9, 11 @ 1:20 pm:

    The problem with the last round of tax increases is that they will be felt for quite some time. Besides adding to the weekly bite to the salary, those expecting refunds after filing tax returns may be forced to write checks instead.

    Nice to see someone finally say that the last second lame duck midnight tax increase “was done all wrong.”


  21. - Nick Name - Wednesday, Mar 9, 11 @ 1:57 pm:

    There is that “fairness” word again when refering to taxes. I have a feeling that everyone has a different opinion of “fairness”.


  22. - Kasich Walker, Jr. - Wednesday, Mar 9, 11 @ 1:57 pm:

    Get back the $700 billion for the 2008 Wall Street bank bailout and give IL 4.1%.


  23. - Bemused - Wednesday, Mar 9, 11 @ 2:55 pm:

    The Feds tax pensions. I am surprised the state does not.


  24. - Angry Chicagoan - Wednesday, Mar 9, 11 @ 3:15 pm:

    I still prefer Rahm’s approach of broadening the sales tax and lowering the sales tax rates. It shifts the burden of the sales tax up the income ladder and it ensures that sales tax revenues won’t constantly lose their value as people shift more and more spending from goods to services. I can certainly see a place for taxing some retirement income but in the grand scheme of things with taxing retirement income you either have to settle for a relatively small amount of money or risk ruining peoples’ retirement. At some point Illinois is going to need to think more broadly about revenue, up to and including a constitutional amendment to open up the possibility of progressive income taxes.

    But for both political and moral reasons, connected to one another, the state first has to get its financial house in order to the best of its ability under the current system — to restore public trust and to identify the problems that are truly intractable without deeper reform.


  25. - Angry Chicagoan - Wednesday, Mar 9, 11 @ 3:16 pm:

    I’d add that I think the pension income tax may well be appropriate given Illinois’ legal limitations; it’s just that no-one can realistically expect it to be a magic bullet that single-handedly solves the state’s problems.


  26. - Anonymous - Wednesday, Mar 9, 11 @ 3:24 pm:

    If I am reading many of these posts correctly (which I hope I am not), many of you think Cullerton was talking only about government pensions? I am sure he meant ANYONE with pension income over $100,000 per year.


  27. - piling on - Wednesday, Mar 9, 11 @ 3:50 pm:

    Mark,
    If you heard Cullerton’s speech to the City Club you’d know that significant changes to TRS and who pays for it were actually discussed in the speech. Taxing retirement income was not. It was part of a discussion with the media after the fact.


  28. - Jellybean - Wednesday, Mar 9, 11 @ 4:37 pm:

    Anyone with retirement income over $100,000 can afford to share some of it with the state. If teens in foster care can pay income tax on their minimum wage jobs, why not affluent retirees.


  29. - someonehastosayit - Wednesday, Mar 9, 11 @ 4:56 pm:

    Too bad we can’t have a Constitutional Convention to address all the changes needed in Illinois government. Oh wait…we had that chance and passed it up. We prefer to make it up as we go.


  30. - Vibes - Wednesday, Mar 9, 11 @ 4:58 pm:

    Michael Bauer is everywhere.


  31. - jake - Wednesday, Mar 9, 11 @ 6:58 pm:

    Naomi Jakobsson has filed an amendment to the state constitution to permit the legislature to enact a graduated personal income tax. Don’t know what the chances are this session, but it is a start. It is HJRCA0012, synopsis:

    “Proposes to amend the Revenue Article of the Illinois Constitution. Provides that individual income taxes may be at a graduated or a non-graduated rate. Provides that any such tax imposed on corporations shall be at a non-graduated rate, not to exceed the average of the lowest and highest individual rates by more than a ratio of 8 to 5. Effective upon being declared adopted.”


  32. - wordslinger - Wednesday, Mar 9, 11 @ 8:18 pm:

    See you, Vince. Enjoy Florida, but try to get to Denny’s before 4 p.m. — otherwise the lines are murder. And such small portions…

    If it turns out they have taxes in Florida, too, try Somalia. I hear there’s little taxation or government regulation for high-flying, pioneering entrepreneurs like yourself.


  33. - Michelle Flaherty - Wednesday, Mar 9, 11 @ 8:26 pm:

    Vince,
    The emergency budget act included near 5 percent pay cuts for lawmakers and cut mileage rates and session expenses.
    It’s been in the news and everything. Some lawmakers voluntarily doubled the amount.
    Please try to pay attention.


  34. - Capitol View - Wednesday, Mar 9, 11 @ 9:21 pm:

    I’m recently retired, but fully support taxing senior pensions above the $50 - 75,000 level. And yes, I would pay state income taxes at either level, based on my pension and my share of my late wife’s.

    Seniors get services — we have a whole IL Department on Aging to address some of their needs.Many other state agencies, ranging from Veterans Affairs to DHS to IDOT, provide services or subsidies to vulnerable seniors.


Sorry, comments for this post are now closed.


* Good morning!
* Ginning up the base
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * Two coasts, 10 days: Macworld’s thorough field test of Apple Pay
        * World’s narrowest bezel arrives in LG’s new smartphone LCD panel
        * Andy Rubin leaving Google to help new hardware tech startups
        * New tones for Lumia
        * Motorola DROID Turbo vs Moto X 2014 (Video)
        * Microsoft Band unboxing and first impressions (Video)
        * Samsung Galaxy A5 specs

        * Norbert Finds and Verifies People's Email Addresses
        * All of the Halloween Freebies and Deals You Can Get Today
        * 3.3 million PlayStation 4 Games Consoles Shipped By Sony Last Quarter
        * Gold’s Gym Offers Fitness Plans, Free 2 Week Trial For Microsoft Band Users
        * MCX’s CurrentC Will Not Support Windows Phone Or BlackBerry
        * Analyst: Larger Displays Lead To Better App Engagement
        * Touch and Go

        * Minnie Miñoso belongs in the Hall of Fame
        * Development of young core in '15 can define Chicago's future
        * Abreu leads White Sox GIBBY hopefuls with five noms
        * Allen, Wills among new faces on Hall's Golden Era ballot
        * The offseason begins with a new Chicago manager and old arguments
        * World Series Game 7: Notes and discussion
        * Guillen, White Sox look back on '05 championship


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        October 2014
        September 2014
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Moran: Mailboxes can exhale with end of electio.....
        * Why I'm voting for Pat Quinn - Chicago Tribune..
        * Illinois Dems dig deep to keep governor's office..
        * Christie in Arkansas, Kansas & Wisconsin today..


        * Illinois Dems dig deep to keep governor's office
        * A look at Ebola guidelines in some states
        * 3 die when train strikes SUV in southern Illinois
        * Illinois schools report has host of new features
        * 3 killed when train strikes SUV
        * Waukegan teachers approve contract ending strike
        * 2 killed, 8 injured in construction zone wreck
        * Suburban judge attacked by inmate in courtroom
        * Man charged in death of Rockford attorney in crash
        * Inmate freed in landmark Illinois case

        * Attorney general seeks clarifications from Topinka’s former nonprofit
        * Inmate freed from Jacksonville prison in landmark Illinois case
        * Cross opposes income tax hike extension
        * Gay marriage, abortion issues take back seat in governor’s race
        * Madigan’s office seeks clarifications from former Topinka nonprofit
        * Cross says no to income tax hike extension, sales tax on services
        * Gay marriage, abortion issues take backseat in governor’s race
        * Illinois inmate freed in landmark capital punishment case
        * Rauner says women will decide governor's race
        * Judge denies ex-representative new bribery trial

        * Illinois Lottery manager scratches off $20 million investment
        * Lake Shore Drive ramps by McCormick Place set for early 2015 construction
        * Groupon forecast falls short of estimates
        * Groupon mulls overseas options as forecast falls short
        * Groupon hires advisers top find partners for Asia businesses


        * Garcia: I'm a serious mayoral candidate, not just a protest vote
        * A higher standard of criminal justice
        * Ex-Northwestern doctor to pay $475K to settle fraud claims
        * Sad day  when  Catholic  schools  close
        * Chicago bead merchant Ronnie Klein, whose Loop business drew stars, dead at 65
        * Chicago bead merchant Ronnie Klein, whose Loop business drew stars, dead at 65
        * Durbin, Oberweis square off for final time
        * State’s attorney investigating alderman’s prize offer to voters
        * Face it: Animator has found a great way to pass time on his commute
        * Refund those unfair yellow-light tickets


        * Alleged lieutenant of drug kingpin 'El Chapo' seeks minimum prison term
        * Off-duty police officer beaten and robbed in the Loop
        * Installation begins on Wallenda's tightrope over Chicago River
        * Teen wounded in Morgan Park shooting, at least 3 others injured across city
        * Waukegan district, teachers come to terms after monthlong strike
        * Judge again orders Crystal Lake South bleachers to come down
        * Naperville high school cancels activities after bomb threat
        * Officials: Defendant in Maywood court attacked judge
        * Rauner, Quinn squabble over who deserves credit for digital lab
        * Coroner: Body buried in Indiana is missing relative of dead woman, slain man


        * Prisoner Freed After Recanting Testimony "Angry"
        * The Choice Of Choice: Gov. Candidates On Abortion
        * Group Has A Goal Of Improving Access To Preschool In Macon County
        * Turn out for what? Will young voters make it to the polls, or stay home as usual?
        * As Infrastructure Crumbles, Trillions Of Gallons Of Water Lost
        * Authorities: Springfield Woman's BAC Three Times The Legal Limit
        * 2014 Election Coverage: Citizens, here's your homework!
        * Aldermen skip chance to ask about city’s handling of police commander
        * Immigrant Rights Groups: Demand Oustrips Slots For Driver's Licenses
        * U-S Senate Candidates Differ On Ebola Response And More


        * Esther Cepeda: Elizabeth Pena: Trailblazer on the big screen
        * Andy Shaw: Voter turnout instrumental to reform
        * Ty Fahner: What if the Court rejects pension reform?
        * Attorney general seeks clarifications from Topinka’s former nonprofit
        * Quote of the Day: Friday, Oct. 31
        * Inmate freed from Jacksonville prison in landmark Illinois case
        * Cross opposes income tax hike extension
        * Gay marriage, abortion issues take back seat in governor’s race
        * Illinois inmate freed in landmark capital punishment case
        * Rauner says women will decide governor's race


        * Area Calendar 10/31/14
        * It's time to trick-or-treat
        * Small fire at Champaign home under investigation
        * Upcoming Services (Oct. 31, 2014)
        * Kum & Go chain settles disabilities lawsuit
        * Superheroes unite to raise $10K for charity
        * Lake Decatur dredging kickoff
        * Attack leaves psychiatric ward nurse blind in one eye
        * Picking up trash no trick for Soy Capital employees on patrol
        * Desire to inspire nets Stewart Scout award


        * Riopell: Voters flood polls before Tuesday
        * State officials want to shoot up to 130 deer in Kane County forest preserves
        * Top-tier apartments proposed for unfinished Libertyville building
        * Hossa hits milestone in Blackhawks' win
        * Chico praised for role in helping broker tentative Waukegan teachers contract deal

        * Patrick Cannon defense strategy rare but n...
        * Feds fine Jesse Jackson Jr.'s campaign com...
        * Ex-Congressman Jesse Jackson Jr. faces sen...
        * Representative Jan Schakowsky Sends Letter...
        * Rep. candidate pushes to uphold marriage b...
        * Reps. Schakowsky and Waxman Introduce Bill...
        * Statement by Representative Jan Schakowsky...
        * U.S. House Passes Resolution Condemning An...
        * FAA Rejects Call For New O'Hare Noise Stud...
        * Representatives Quigley, Duckworth, Schako...

        * Final Senate Debate...
        * Final Senate Debate...
        * Final Senate Debate...
        * Education Dept. cracks down on for-profit ......
        * Education Dept. cracks down on for-profit ......

        * How first lady, Rauner factor into their p......
        * ISIS Has More Land, Money, and Fighters Th......
        * Celeb Spotting...

        * The Weekend Desk Report
        * Beachwood Photo Booth: Francisco Frankenstein
        * Trick Or Treat Safety Tips For Drivers & Pedestrians
        * The Week In Chicago Rock
        * Op-Ed: Google Car Gives The Blind More Independence While Saving Illinois Millions
        * Will Chuy be the new Karen Lewis?
        * Op-Ed: Google Car Could Give The Blind More Independence While Saving Illinois Millions
        * Poll: Downstate Could Go Either Way In Guv's Race
        * South Siders To Rally For Trauma Center Outside U of C Gala
        * Google Car


        * Editorial: Rauner best choice as governor to begin to reverse Illinois’ fortunes
        * Quinn to celebrate Rauner’s UI Labs accomplishment
        * Another Democrat Runs Away From Pat Quinn
        * Governor Pat Quinn Statement on Tentative Agreement to End Waukegan Teacher Strike, Return Students to Classrooms - State Education Chief Worked Overnight to Reach Common Ground, Students Heading Back to School on Monday
        * Governor Quinn Joins UI LABS to Break Ground on New Digital Manufacturing Hub - Digital Manufacturing and Design Innovation Institute Set to Open in 2015, Create Jobs




            Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller