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* Finke…
As you’re no doubt aware, there’s a Democratic bill floating around the General Assembly to set tax rates should the state adopt a graduated income tax.
Supporters said it would actually give a tax cut to 99 percent of Illinois taxpayers and increase taxes only on the very wealthy. […]
A number of objections were raised to the idea of a graduated income tax and to the Democratic proposal in particular, including this one raised by a couple of Republicans: The bill would raise $1.9 billion in new revenue, but the state’s budget deficit is many billions of dollars more than that. So the bill didn’t solve the state’s financial problems.
That’s true. It’s also true that a constant Republican theme for months has been that the Democrats are trying to maneuver the state into a massive tax increase. To then argue a revenue bill is flawed because it doesn’t raise enough money is a good one.
posted by Rich Miller
Monday, Apr 25, 16 @ 2:39 pm
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Comment by Norseman Monday, Apr 25, 16 @ 2:47 pm
So unless a bill puts the state into the black in its entirety, it’s bad legislation and shouldn’t be passed. Got it!
Comment by Cubs in '16 Monday, Apr 25, 16 @ 2:47 pm
If the new graduated tax rate structure didn’t raise enough money, the rates could always be raised, couldn’t they (the current constitutional flat tax requirement having been scrapped)?
It would not longer be a tax cut for 99% of the people, but once the flat tax requirement is gone, the GA can do what they want with the rates.
Comment by titan Monday, Apr 25, 16 @ 2:47 pm
Reminds me of the old Vaudeville line, “the food in that restaurant was terrible, but the portions were huge!”
If the Democrats’ so-called massive tax hike won’t fix the Rauner deficit, how high do Republicans want the flat tax rate to go? 6%? 7%?
Comment by 47th Ward Monday, Apr 25, 16 @ 2:51 pm
*Would the Representative care to offer an amendment ?* Didn’t think so.
Comment by West Sider Monday, Apr 25, 16 @ 2:57 pm
===the GA can do what they want with the rates. ===
Yes, technically true. However, it’s practically not the case.
How many times has the income tax been raised this century? Once. How many times has it been raised permanently this century? Zero. How many times has it been raised permanently the past 25 years? Once.
Comment by Rich Miller Monday, Apr 25, 16 @ 2:58 pm
It sounds like Rauner has a brick on the graduated income tax bill.
Comment by Mama Monday, Apr 25, 16 @ 3:14 pm
Mama-
LOL!
Comment by Trolling Troll Monday, Apr 25, 16 @ 3:23 pm
If you need about $8B of new revenue ($4B budget shortfall plus digging out from the past year’s spending and expanding school aid), the graduated income tax as proposed gets you $1.9B. Extend to some retirement and that is probably around $1.6B (depending on exemption level). Dig up about $4.5B of new service taxes and you’ve got it all covered.
If you want to try to make it more palatable, toss in some local property tax relief in the form of more school aid to K-12 once the backlog is paid off or make some of the new tax rate rachet down based on the percentage of backlog paid down and/or pension shortage paid down.
Yes, it is a huge total tax increase … but the math dictates either a lot of revenue or pretty much impossible to permanently maintain cuts.
Comment by RNUG Monday, Apr 25, 16 @ 3:30 pm
The sure fire way to get a millionaires tax passed is to use it to pay pension debt.
Someone needs to put service taxes back on the table.
Comment by Liberty Monday, Apr 25, 16 @ 3:40 pm
….Dig up about $4.5B of new service taxes and you’ve got it all covered… …Someone needs to put service taxes back on the table….
So the IL Supremes ruled in the 60’s that service taxes cannot be cherry picked. All services must be taxed, which does seem fair. However, there are some really powerful “interest” groups who would do all in there power to keep from being taxed for their services. And since carve-outs don’t appear to cut it with the court, a service tax is an unlikely scenario. Income tax is the best option to raise a lot quickly.
Comment by Nick Danger Monday, Apr 25, 16 @ 3:59 pm
This is very similar to the GOP’s principled, fiscal-minded defense of the Lieutenant Governor’s position.
Comment by Precinct Captain Monday, Apr 25, 16 @ 4:05 pm
Rnug, A graduated income tax opens retirement income, to a possible tax for various retirement income levels. A flat tax does not allow for taxing retirement income based on income levels, and would likely result in a law suit filed, if implemented! Retirees note, before you support a graduated income tax!
Comment by Anonymous Monday, Apr 25, 16 @ 4:30 pm
– The bill would raise $1.9 billion in new revenue, but the state’s budget deficit is many billions of dollars more than that. So the bill didn’t solve the state’s financial problems. –
Is that what the governor and the GA Republicans have doing for the last year — trying to solve the state’s financial problems.
I guess they were “solving” the state’s higher and and social service “problems” in a similar manner?
Funny way of going about it. The scoreboard at the comptroller’s office is not influenced by scatter-brained spin.
Comment by wordslinger Monday, Apr 25, 16 @ 4:43 pm
The graduated tax could and should dig a deeper than only increasing taxes for the top 1%. For example, the top 10% can afford to pay more than they do. Since the top 1% get one quarter of IL personal income, and the next 9% get the next quarter, extending the graduated increase to cover the top 10% and half the state’s personal income should net a substantially bigger revenue gain. As for the politics, 90% is still a hefty voting block to support the legislation.
I’m sure the ILGOP will be down with this.
Comment by X-prof Monday, Apr 25, 16 @ 4:47 pm
It would be an economic boom if they increase the progressive tax rates and reduce the State sales taxes.
Taxing services is another regressive tax that would damage the economy.
Comment by Chicago 20 Monday, Apr 25, 16 @ 4:59 pm
- Anonymous - @ 4:30 pm:
There are a couple of exemption / credit schemes for retirement income for the current flat tax that would probably be able to slip through the courts. Wouldn’t be quite as clean as a retirement income tax based on a graduated tax.
Comment by RNUG Monday, Apr 25, 16 @ 5:30 pm
Hey, let’s not forget sales tax on Ag equipment. Whenever I buy a new truck or make an improvement at the old widget shop, how comes old blue has to poney up sales tax. Oh! I almost forgot, most CapFax readers, like our statewide elected officials, are afraid of the powerful Ag lobby!
Comment by blue dog dem Monday, Apr 25, 16 @ 8:26 pm
Where is the paln to slash spending? Eliminate programs? Cut payroll?
Comment by Tone Tuesday, Apr 26, 16 @ 8:12 am