SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Unclear on the concept

Friday, Feb 14, 2014

* Rep. Mike Smiddy (D-Hillsdale) supports raising the minimum wage to $10 an hour and talked a bit about the impact on small business

Smiddy said he agrees that more of the tax burden should be shifted from small businesses to large corporations. He believes that loopholes would be closed by shifting away from what he calls an antiquated tax system based on property.

“Illinois is one of only 7 states that still have a flat-tax system,” Smiddy said. “We need to move to a graduated-tax system.”

* OK, this is a bit off on at least a couple of levels.

1) Big corporations don’t pay a whole lot of corporate income taxes. But unless they’re in a TIF district, some of the only taxes that big corporations pay are property taxes. Shift property taxes to the income tax and corporations won’t be paying much of anything. Unless something else is done, the burden will be shifted to individuals and small businesses.

2) Except for the 2.5 percent Personal Property Replacement Tax, most small businesses don’t pay the corporate income tax at all, but they do pay personal income taxes. Increasing tax rates on higher earners will most definitely impact small business owners.

You want to help out small business in exchange for raising the minimum wage? Well, one option would be to lower or eliminate the PPRT, or do something more about workers’ comp and unemployment insurance costs.

- Posted by Rich Miller        


14 Comments
  1. - Empty Suit - Friday, Feb 14, 14 @ 10:40 am:

    The news reports sounded like he got a lot of push back at his town hall. Oops


  2. - Formerly Known As... - Friday, Feb 14, 14 @ 10:40 am:

    These piecemeal proposals are often heavy on partisanship but light on offering a cohesive plan. Good points, Rich.


  3. - Norseman - Friday, Feb 14, 14 @ 10:44 am:

    Uh oh! Someone let Rep. Smiddy talk without getting staff approval.


  4. - CicrcularFiringSquad - Friday, Feb 14, 14 @ 10:50 am:

    Biz pays little or nothing.
    They were the big winners with BLinkyJim Edgar and the GOPies pushed through real estate tax caps.
    The reformers all claimed this would help homeowners, but biz waz the big winner


  5. - Downstate Illinois - Friday, Feb 14, 14 @ 10:53 am:

    Rich, you’re mistaken about TIFs. Even if a corporation is in a TIF district they will pay the full amount of property taxes that are owed on the property. TIF districts don’t reduce the property tax on anybody, they just divert the portion of property taxes that were caused by the increase in property values from the development. That tax increment usually goes to the developer and is split with the city.


  6. - Anon - Friday, Feb 14, 14 @ 11:15 am:

    “some of the only taxes that big corporations pay are property taxes. ”

    What about payroll tax? Licenses? Fees? Telcomm tax? Tolls? Sales tax? Fuel tax? Employment security tax? Franchise tax?


  7. - Rich Miller - Friday, Feb 14, 14 @ 11:17 am:

    Anon, I didn’t say they didn’t pay any other taxes at all.


  8. - Rich Miller - Friday, Feb 14, 14 @ 11:25 am:

    Downstate Illinois, while admittedly an inartful statement of mine, what I meant is that the companies get some of that tax money back through direct investment in the district.


  9. - Living in Machiaville - Friday, Feb 14, 14 @ 11:26 am:

    Dang Rich, could not have put it any better than you did if I tried.

    Circular, you may not have underestood Rich’s point about taxes. Please do not lump small business in with big ‘biz’. The vast majority of Illinois business (90% plus) have less than 20 employees and don’t organize as C corps and get those tax benefits.


  10. - Yellow Dog Democrat - Friday, Feb 14, 14 @ 11:27 am:

    Rich -

    Agree with you on a few levels. First, an unbiased snapshot of the business tax climate in Illinois from the nonpartisan Tax Foundation:

    Business Tax Climate for Illinois (1=Best, 50 = worst):

    Overall: 31
    Corporate Tax Rate: 47
    Individual Income Tax: 11
    Sales Tax: 33
    Unemployment Insurance: 43
    Property Tax: 44

    Rich has a point that some businesses pay a lot of property taxes, but honestly how much real estate does it take to run a dot.com?

    Most of the inequity in property taxes is driven by the inequity in the school funding formula, which a graduated income tax system would likely address, and the “unique” Cook County property tax system which shifts the tax burden from individuals to businesses — which most reasonable people agree probably ought to change and nearly everyone agrees isn’t going to change any time soon.

    On the unemployment insurance tax rank, Illinois could review the rankings to ensure they are actuarially sound, but since the primary driver of insurance rates is wages, and Illinois happens to be a high-wage state, I wouldn’t read to much into it.

    A few final points:

    Business tax climate is only one of the data points businesses examine, and while one of the easiest to quantify and measure across localities, it is certainly not the most important factor.

    California is ranked 48th worst for its tax climate, but last time I checked, Silicon Valley was still in California and analysts said California was running strong, despite the worst drought in a century.

    New York is ranked 50th. Last time I checked, New York was home to Wall Street and more Fortune 500 companies than any other state.

    So, take these rankings with a grain of salt. And two shots of tequila.


  11. - PoolGuy - Friday, Feb 14, 14 @ 11:44 am:

    I think most small businesses pay 1.5% PPRT and corporations pay 2.5%. but either way i wish we could get rid of PPRT and just have one rate. and if they ever pass a graduated tax then drop the PPRT for small businesses altogether. if most corporations don’t even pay corp tax then this talk of lowering it looks like such a snub to small biz when talk of graduated tax at same time.


  12. - Cook County Commoner - Friday, Feb 14, 14 @ 12:12 pm:

    Regardless of how taxes are apportioned between “big” and “small” businesses, businesses remain tax collectors. The tax load falls onto the end purchaser of a business’s product or service, subject to competitive forces controlling how much of the load a business can pass along to its customers. And if the business cannot successfully pass on the load relative to its competitors and maintain a competitive price, it folds. Seems when folks talk about taxes on businesses, they neglect to consider how business operates.


  13. - A guy... - Friday, Feb 14, 14 @ 1:04 pm:

    This goofy statement from Smiddy begs that one of two things happen; fire a staffer for a dopey position paper. Get a staffer, because the dopey position was arrived at on his own.


  14. - Just the Facts - Friday, Feb 14, 14 @ 1:45 pm:

    The problem with reducing or eliminating the PPRT is that the tax receipts go to units of local government. For example, according the Department of Revenue, Springfield School District 186 received $3,682,000 for the most recent year. If you eliminate that revenue stream to the locals, they will have to replace it and more many of the local governmental units the only option would be to raise property taxes.

    There may also be a constitutional issue with eliminating the PPRT as well. The PPRT was enacted in 1979 because the Illinois constitution of 1970 mandated the elimination of personal property taxes and charged the General Assembly with coming up with a replacement for the revenues. (See Article IX, Section 5(c) of the Constitution.)


Sorry, comments for this post are now closed.


* AFSCME responds point by point
* Rauner claims he will offer "more compromises" at leaders' meeting
* #FundEIU
* At least our primary is in March
* Rate the new Dunkin and Schimpf ads
* Question of the day
* Museum to reopen soon, as long as MJM goes along
* "I cannot understand why union members would not love that"
* Poe again opposes McCann in GOP primary
* Behind the HQ PR pops
* If at first you don't succeed...
* Remember this quote
* Everyone failed Laquan McDonald
* He hasn't seen anything like this
* State owes top three medical providers $111 million
* Edgar bucks Rauner, endorses Acklin
* Another clue?
* *** UPDATED x1 - Alleged Kirk meeting "never occurred" *** And you think Rahm has troubles?
* Chaos is a feature, not a bug
* Our elected officials need to tell us: do you support the Chicago Teacher’s Union’s contract rejection?
* 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

  
* Verizon may scoop up Yahoo to join AOL in content portfolio
* Pagaré Smartstrap Plans to Bring Contactless Payments to Pebble Time
* Alleged image and details for Samsung Galaxy S7 posted online
* Play chess on Facebook Messenger with “secret code”
* In-development Moto hardware offers possible early look at this year’s lineup
* Watch video messages on your Android Wear with latest Glide update
* [Deal] Amazon’s Fire 7-inch tablet now $10 off for a limited time

* 7 White Sox who could use a rebound season
* This week in sabermetrics: The screwball, Mark Buehrle, and launch ...
* 2016 Fantasy Player Preview
* ALL TIME SSS POST AND REC TOTALS
* White Sox Minor Leaguer Shearrow suspended
* Spring not far away as truck heads to Arizona
* This week in White Sox: Sun sets on Andre Ethier rumor

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


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

Archives
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
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


* Springfield considering alternate funding optio.....
* Rauner claims he will offer “more compromises” .....
* Illinois State Museum could reopen within weeks.....
* College-accrediting agency sends warning amid b.....
* Rauner seeking to impose last offer on state em.....
* Column: EIU rally attracts support from all aro.....
* Illinois State Museum could reopen within weeks.....
* Rauner tells Wheeling leaders: 'Texas is kickin.....
* College-accrediting agency sends warning amid b.....
* Governor Rauner, IDNR reach agreement to reopen.....


* 3 Democrats vying for US Senate to face off for 1st time
* College-accrediting agency sends warning amid budget impasse
* 3 teens arrested after pursuit in stolen vehicle in Rockford
* EXCHANGE: Little Free Library keeps kids reading
* Northern Illinois jail hopes to use wind turbine for power
* To cut nearly
* American to add 5 new gates at Chicago's O'Hare airport
* School funding overhaul again faces long odds in Springfield
* County filing insurance claim to recover funds lost by fraud
* Professor who wore headscarf to leave Christian college

* Illinois State Museum could reopen within weeks if changes approved, DNR director says
* College-accrediting agency sends warning amid budget impasse
* School funding overhaul again faces long odds in legislature
* School funding overhaul again faces long odds at Statehouse
* AFSCME reviews legal options in wake of member survey
* School funding overhaul again faces long odds
* Statehouse Insider: Three days until President Obama turns Illinois around
* Gaming Board seeks to revoke license of terminal operator
* Illinois Gaming Board seeks to revoke license of terminal operator
* Springfield awaits details on President Obama's visit on Wednesday

* Northern Trust freezing salaries for most of 2016
* Changing Illinois' school funding formula faces long odds
* Baker Tilly adds Mesirow consultants
* Too bad for Boeing—but this Rolling Meadows plant will get boost from Air Force bomber
* Small airlines to O'Hare brass: What about us?


* Pfleger: Parking tickets near church might be cop with bone to pick
* Georgia Nicols horoscopes for Feb. 8
* Dear Abby: Parents keep paying the bills for son, 26
* School funding overhaul again faces long odds in Springfield
* BGA: CPS and DCFS failed Laquan McDonald
* City to expand full-day pre-kindergarten program
* Beyonce tour coming to Chicago May 27
* ‘The Good Wife’ in its final season, CBS announces
* 2 aldermen jump on TIF pain train to help CPS
* ‘Downton Abbey’ costumes exhibit finds perfect setting in Driehaus Museum


* No injuries when Metra train car derails on BNSF, but delays reported
* 8 days into month, homicides in Chicago nearly equal all of last February
* City fails to warn Chicagoans about lead risks in tap water
* Woman recounts fatal police shooting: 'You hear all the shots. Then it got real quiet'
* 1 dead, 10 injured in Chicago shootings
* Veterans center in Portage Park to serve as 'community base'


* Illinois State Museum could reopen within weeks if changes approved, DNR director says
* College-accrediting agency sends warning amid budget impasse
* School funding overhaul again faces long odds in legislature
* U.S. Rep. John Shimkus: Come visit Galatia, Mr. President
* School funding overhaul again faces long odds at Statehouse
* AFSCME reviews legal options in wake of member survey
* School funding overhaul again faces long odds
* Our View: U.S. Senate candidates should debate outside Chicago
* Bernard Schoenburg: Poe backs Benton over McCann in 50th
* Austin Berg: Illinois manufacturers need bold action from Springfield


* Blizzard Warnings in the upper Midwest
* 02-08-16 Monday Morning Quarterbacks
* PODCAST: Central Illinois Business 2-6-16
* Menorah vandalized again
* Professor who wore headscarf to leave Christian college
* County filing insurance claim to recover funds lost by fraud
* Northern Illinois jail hopes to use wind turbine for power
* Alabama trooper delivers baby instead of ticket
* Obama asking Congress for emergency funding to combat Zika
* Survivors pulled out from building 2 days after Taiwan quake


* Today in History
* Police at scene of black teen's shooting falsified reports
* Gov't creates new student aid enforcement office
* TV producers may start making you wait for new shows online
* Pitcher Gavin Floyd agrees to $1M, 1-year deal with Toronto

* House lawmakers overcome hurdle on key tra...
* Rodney Davis talks funding with Bloomingto...
* The agency that fought Illiana gets a new ...
* Rep. Dold takes educational cruise down Ch...
* Lawmakers decry high turnover rate of VA h...
* CBD Oil, and politics
* Simon considering state Senate bid
* Killer Congressman Tom MacArthur trying to...
* Shutdown? State may not notice
* Rep. Bob Dold

* Durbin joins bipartisan group of senators ......
* McCain Blasts Senators Over Russian Rocket......
* McCain blasts fellow senators over Russian......

* 3 Democrats vying for US Senate to face of......
* 3 Democrats vying for US Senate to face of......
* 3 Democrats vying for US Senate to face of......
* 3 Democrats vying for US Senate to face of......
* 3 Democrats vying for US Senate to face of......

* Freebies for the U of C charter network while CPS goes begging.
* Happy Lunar New Year.
* Illinois Dems want Obama to be honored with state holiday
* Trump, Cruz and Carson discuss health care plans at New Hampshire GOP debate
* Where's Weyermuller? With James Marter, Illinois GOP candidate for U.S. Senate
* Where's Weyermuller: Watching Chicago teachers demand more from near-bankrupt system
* Accused anti-abortion undercover videographer offered probation
* Trump has his Palin, Kasich rolls out his celebrity support
* Lady Gaga scores at Super Bowl 50 with respectful rendition of national anthem
* Random thoughts. Billionaire Bill.


* Emergency Management Officials, National Weather Service Encourage Winter Preparedness - November is Winter Weather Preparedness Month in Illinois
* Keep Your Family Safe This Winter - November through February are leading months for carbon monoxide related incidents
* Governor Takes Bill Action
* Illinois Department of Labor Director Hugo Chaviano Awards Governor’s Award for Contributions in Health and Safety to the Illinois Refining Division of Marathon Petroleum Company LP
* State Regulator Elected Treasurer of Interstate Medical Licensure Compact




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