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These guys are starting to pique my interest…
Americans for Prosperity made their second stop of a statewide “Mystery Pork Tour,” Thursday at JTM Concepts Inc., Rock Island.
AFP Illinois director Joe Calomino said the goal of the tour is to spotlight some of the most outrageous examples of projects throughout the state funded by pork-barrel spending.
“The state of Illinois has a pork-barrel spending problem — a trend toward government waste, fraud and abuse that the people of Illinois cannot afford,” Mr. Calomino said. “Our lawmakers must get spending under control.”
Their website can be found here. The group has chapters all over the place, and Illinois director Calomino has been around for a while. From his bio…
Joe Calomino began his career as a political strategist in the Illinois Secretary of State’s office where he served for eight years. During this time, Joe served as a regional campaign coordinator for the successful 1994 re-election campaign of Secretary of State George Ryan as well as Ryan’s successful 1998 gubernatorial election. […]
In the 2006 Republican gubernatorial primary, Calomino managed the campaign of first-time candidate Ron Gidwitz.
Calomino held a press conference a few weeks back about the heated driveway at the governor’s mansion…
He was joined at a news conference Thursday by representatives of the national office; state Rep. Michael Tryon, R-Crystal Lake; Greg Baise, president and CEO of the Illinois Manufacturers Association; former Republican gubernatorial candidate Ron Gidwitz; and others.
It’s occurred to me that one very good way to undermine support for a tax hike is to undercut government credibility with persistent allegations of gross mismanagement. Both Baise and Gidwitz have been lobbying hard against the governor’s gross receipts tax.
And then there’s this press release from the group…
This morning, Ron Gidwitz, 2006 Republican Primary Candidate for Governor and Chairman of the Illinois Coalition for Jobs, Growth and Prosperity, launches local chapters of Americans for Prosperity Foundation in the Quad Cities region.
Gidwitz, who is supporting the grassroots organizations mission of educating and empowering citizens to hold their elected officials accountable for how they spend our tax dollars, highlighted the states fiscal problems and called on citizens to “take back their governmentâ€.
Gidwitz unveiled a direct mail piece that will be mailed to approximately 100,000 households in several legislative districts throughout the state.
At a later stop in Moline Illinois, Gidwitz called on citizens to “contact 71st District Democratic Representative Mike Boland and ask him why he has regularly voted for higher taxes, raiding the pension funds earmarked for veterans and raiding funds for environmental purposes and roadwaysâ€.
Meanwhile, House Speaker Michael Madigan’s spokesman was asked by the Southwest News Herald about the governor’s tax plans…
“We’re waiting for the details,†said Steven Brown, a spokesman for House Speaker Michael Madigan (D-22nd).
“The spending things are there but ever there was a time when (details on revenue are needed), this is it,†he said.
You may have seen a complaint by business that the gross receipts tax leads to “pyramiding.” Bruce Braker, the president of the Tooling & Manufacturing Association, explains…
Here is an example of pyramiding in the manufacturing process, assuming the Legislature enacts the 0.5 percent tax suggested by Blagojevich:
“Basic industry” sells $200 worth of raw materials to a “parts fabricator”: $1 tax.
“Parts fabricator” adds value and sells $400 product to “manufacturer”: $2 tax.
“Manufacturer” adds value and sells $800 product to an “integrator”: $4 tax.
“Integrator” adds value and sells $1000 product to a “wholesaler”: $5 tax.
“Wholesaler” adds value and sells $1,200 product to a “retailer”: $6 tax.
“Retailer” adds value and sells $1,600 product to “consumer”: $8 tax.
In this example, $26 in taxes was paid on a single product that was sold to the final consumer for $1,600. Thus, the effective tax rate was 1.7 percent, or more than 300 percent higher than the rate suggested by the governor.
And, finally, the Tribune points out some inconsistencies in the governor’s GRT proposal…
But an official at the Illinois Chamber of Commerce said Thursday that top Blagojevich aide John Filan told her that small businesses would have to pay the gross receipts tax after the corporate income tax is phased out in four years. Filan said the tax would be lower than the one imposed on big companies, or at a fixed dollar amount, said Connie Beard, an attorney and a top chamber official.
The letters didn’t mention anything about that.
“It offends me because they’re [implying] that all of these [small-business owners] aren’t going to be paying the gross receipts tax,” Beard said.
Blagojevich spokeswoman Becky Carroll said that Filan believes Beard must have misunderstood him and that he was simply listing various tax options for small businesses after the corporate income tax ends.
The administration intends to keep the corporate tax in place for small businesses for now, then get comments from the small-business community on which tax system it would prefer, Carroll said.
posted by Rich Miller
Friday, Mar 16, 07 @ 7:28 am
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I have one question, are you (Rich) affected by the GRT?
Comment by Dead Head Friday, Mar 16, 07 @ 8:22 am
And the objective is to have Illinois business create skilled jobs, reinvest locally, and remain competitive in the interstate, national and world marketplace?
Comment by Truthful James Friday, Mar 16, 07 @ 8:26 am
Mr. Calomino must be unaware of the facts.
Illinois is a low tax state. Our flat 3% income tax rate is the lowest rate of any of the 41 states that levy an income tax (This is 21% below the national average.)
According to the Institute on Taxation and Economic Policy, if you include charges and user fees, the total tax burden in Illinois is among the lowest in the nation, ranking 47th out of 50.
Comment by Squideshi Friday, Mar 16, 07 @ 8:56 am
Hey, Squideshi,
At last something to be proud of. Our state government must be highly efficient, being a low tax state and mkanaging the state efficiently, and blowing all that dough on pork projects too!!!
Or did you mean that we should not try to be a low tax state? It would be better to be judged a high tax state, eh?
Comment by Truthful James Friday, Mar 16, 07 @ 9:02 am
A guy who worked for the “King of Pork” in this state, runs around pointing fingers. Nice.
Comment by Dieter Friday, Mar 16, 07 @ 9:06 am
Squideshi,
You are being mislead.
Try a REAL tax research organization with 80 years of credibility - The Tax Foundation.
According to them, (and they are the ones most often quoted by reputable reporters, btw), Illinois ranks #25 in tax climate. While they say Illinois ranks #10 regarding income tax, our property taxes are among the worst, and our other taxes drop us into the #25 ranking for 2007.
NOW look at what Blagojevich proposes to the figures - we DROP TO #40.
Why don’t you just can that “Institute” crap, and read some primary source documentation about taxes and get some idea why Blagojevich’s proposal would destroy Illinois?
Comment by VanillaMan Friday, Mar 16, 07 @ 9:41 am
On a somewhat related sidenote …
Are we naive enough to think that businesses don’t currently pass on the impacts of taxes and fees to customers?
Is it actually the process itself (of passing on the cost impact of taxes and fees to the customer) we’re worried about, or the amount?
Comment by YNM Friday, Mar 16, 07 @ 10:22 am
The pyramiding example is if how cost of this tax is going to get transmitted to the consumer in the form of higher prices.
Comment by RMW Stanford Friday, Mar 16, 07 @ 10:41 am
VanillaMan,
You can’t include property taxes when talking about IL state taxes. Property taxes are LOCAL taxes voted on by local residents. If they are high in places, it is because those residents have chosen to have higher taxes either directly via referendum or indirectly by electing pro-tax councilmembers.
Comment by cermak_rd Friday, Mar 16, 07 @ 10:43 am
Squideshi, your source only shares misleading information, much like Blagojevich. Illinois IS a high tax state.
First of all, the 3% personal income tax in Illinois applies to gross income, not net Federal taxable income like most other states. 3% of a higher gross income can be much more than 6% of a lower net income, especially when considering each state has different exemptions. Apples and oranges and the fact that they don’t qualify what is ommitted from their stats should tell you how accurate they are and how biased they are. Looking at the rate alone without context is intentionally misleading.
As Vanilla said, Illinois ranks 10th in the US for total tax burden adjusted for income. That’s Fed, state, and local. And to rain on Blago’s parade, Illinois businesses pay a higher share of state and local taxes than the average for businesses in all the US states. They get hit much harder by property taxes here than in other states, which is something Blago seems to be forgetting. This is also why you didn’t see the outrage from business about HB750/SB750. They can get out of paying corporate income taxes a lot easier than property taxes, so they would love to see the so-called “tax swap”.
But with Illinois tax revenues up a $1 billion over the same period last year, we don’t need ANY new tax revenue. They need to stop waste, fraud, and the corruption tax. $115,000 of our tax money to mail a bunch of half-truths to small businesses? And he wants $7 billion more? You can’t trust him with more money, it’s really that simple. (Yes Rich, undercutting government credibility is VERY easy to do in IL and it sometimes works.)
Comment by Jeff Trigg Friday, Mar 16, 07 @ 10:55 am
cermak, actually you do have to include local taxes when talking about state taxes unless you want to factor out education costs, etc. from the other states’ taxes to come up with an apple versus apple comparison. Our local taxes pay for more education costs than other states’ do, so only comparing state taxes is misleading since our state government spends less on education because our local governments pay more. Or we can do it your way and I would be truthful (half) saying Illinoisans have the third highest taxes in the nation, which is true for property and local taxes.
Comment by Jeff Trigg Friday, Mar 16, 07 @ 11:22 am
There is always someone lobbing the stop wasteful spending bomb in any conversation about taxes. Sometimes he comes up with a few examples that in the scheme of a 55 billion dollar budget really don’t add up to drop in the bucket. I ask Vanilla Man or any of the others that rail about this to come up with real savings. Find a way to cut ten percent from the budget. Post your cuts and take your bashing. If cutting 100,000 to fund a senior citizens center or something like that makes you feel good then sleep well my friends. That kind of stuff is what you describe as pork. I call it taking care of constituents. I do believe the Governors tax plan is a bad idea. I do appreciate the services the State provides. I would pay a little more income tax to keep them.
Comment by TRUTH101 Friday, Mar 16, 07 @ 11:27 am
Illinois takes a lower percent of its citizens’ income in state and local taxes than almost any state in the country, pure and simple fact.
I challenge anyone (once again) to propose a specific list of cuts to the budget sufficient to solve our state financial problems. Please do so under your own name, not some “anon”. The people who will have to vote on the spending cuts will have do do so under their real name.
Comment by steve schnorf Friday, Mar 16, 07 @ 11:39 am
So, Bruce Braker, the president of the Tooling & Manufacturing Association, just proved the GRT will work -
They made the manufacturer’s rate lower because it is more likely to be subject to pyramiding. So, if something is taxed at different stages, leading to pyramiding, the impact won’t be as large.
In his worse-case scenario, it comes out to still be below the standard rate for services.
Comment by sam Friday, Mar 16, 07 @ 12:15 pm
But Connie Beard, an official at the Illinois Chamber of Commerce, said Friday that some small business owners Blagojevich says would be exempt from the gross-receipts tax are under the mistaken impression that they would pay no taxes when the corporate income tax is phased out.
She said a top Blagojevich aide, John Filan, told her that small businesses would pay the gross-receipts tax after the income tax phase-out, either applied at a lower rate or at a fixed amount.
Blagojevich spokeswoman Becky Carroll said Filan simply was discussing possible options and that the administration plans to get comments from small business owners on which tax system they would prefer.
So which version of the GRT will IL pass? The Filan Plan or the Becky Carroll Plan? Sounds like the gov’s folks are making up as the go along.
Still.
Comment by GettingJonesed Friday, Mar 16, 07 @ 2:04 pm
For state and local taxes (not including federal) Illinois ranked 14th highest in the percentage of our citizen’s income going to state and local taxes. Pure and simple fact from the respected Tax Foundation.
http://www.taxfoundation.org/files/illin.pdf
I’ll give you a great list of cuts that can be made just as soon as the General Assembly stops making it impossible to find out how our money is spent by hiding it in Department budgets and lump sums etc. Off the top of my head, decriminalizing marijuana would net the state well over $1 billion a year. That’s 2 percent right there on top of the $1 billion plus more the state is on track to bring in this year.
Cap pensions at $80,000 a year. Limit benefits to friends and family of state employees. Stop all corporate subsidies, wine subsidies, ethanol subsidies, sports and entertainment subsidies. Plenty of cuts could be made to the Illinois Arts Council, Illinois Tourism Bureau, Illinois State Police, Chicago travel and the flying fleet, abolish the Comptroller and Lt. Governor, sell the mansions, cut sessions to every other year and pay and benefits accordingly, and that’s all I can think of off the top of my head. If only they’d let us see the state’s checkbook.
sam, you forgot that the $1,600 product has a competitor in Wisconsin selling the product for $1,550 and the Illinois company lost the sale and then had to layoff an employee for a month.
Comment by Jeff Trigg Friday, Mar 16, 07 @ 2:07 pm
“They made the manufacturer’s rate lower because it is more likely to be subject to pyramiding. So, if something is taxed at different stages, leading to pyramiding, the impact won’t be as large.”
What it shows is that the cost of the tax is going to be incorporated into the price of the final good and services and that the price the consumer ends up paying could be more than the advertised rate.
Comment by RMW Stanford Friday, Mar 16, 07 @ 3:41 pm
Here’s a neat trick Republicans like to do when they’re griping about taxes and fees…
The proposal is only a 1/2% tax. I pay 600% of that amount in income tax. Are these nattering nabobs really that greedy???
Comment by NW burbs Friday, Mar 16, 07 @ 5:55 pm
Everyone keeps trying to play “Gotcha” with the pyramiding issue.
From a tax policy wonk point of view, it is pretty obvious they took pyramiding into consideration when they created the two drastically different rates.
Maybe the rate needs to go lower? How low should the ‘goods’ rate go?
Comment by JohnR Friday, Mar 16, 07 @ 7:41 pm
Jeff, no matter how wrong I think you are about many things, including these “cuts”, at least you sign your name.
Comment by steve schnorf Friday, Mar 16, 07 @ 10:30 pm
Cermack,
You’re kidding about that “property taxes are local” nonsense, aren’t you?
First, we all know that Public Education takes the lion’s share of the Property tax. Second, we know that this money isn’t really “spent” locally as it goes to massive waste, bureaucracy, and featherbedding mandated by the school code.
You can pretend that unwarranted benefits on a protected class of teachers and bureaucrats is “locally spent,” but the fact is you are simply transfereing money from rich property owners to a monopoly (no Virginia, it isn’t really ‘for the children’).
Third, policy wonks on the left and right seem to ignore the fact that our property tax system is merely the enactment of a “progressive tax” by proxy.
A graduated (or increased) income tax, combined with the repeal of the STATE AUTHORIZED property tax for the education monopoly would probably be more efficiently spent… (e.g. money would flow from the education monopoly to hospital, clinic, health care, Community college, etc. etc.)
It’s time Illinois had an honest debate about spending priorities instead of ‘edu-pork’ getting the first 7 bites at the apple.
and Steve,
Along with permanently cutting property taxes and swapping them with HB750 increases, we can get rid of school districts and the cadre of useless Ass. Administrators, Ass. Principles, Ass. Coordinators and Ass. directors that they create.
Throw in getting rid of counterproductive programs like DARE, and nonsense like every mosquito abatement district getting its own police force, (Metra, RTA, Sec of State, Forest Preserve) and the fact is that this state would do just fine cutting the budget instead of driving business out with crushing tax increases.
Comment by extrawise Saturday, Mar 17, 07 @ 10:13 am
NWBurbs
Unless you are among the super rich where deductions are no longer deductions, or are paying penalties and interest, or are donating money to the feds, you don’t pay 30% That’s the highest marginal bracket.
And by the way, as I say to my wife, don’t say ‘only’ if it is more than a quarter.
Comment by Truthful James Monday, Mar 19, 07 @ 7:38 am