* Senate President Cullerton said he met with CME to talk taxes today…
In a cellphone interview after an hour-long meeting with CME Group Inc. Executive Chairman Terrence Duffy, Mr. Cullerton said a recent hike in the state’s corporate income tax rate was “bigger than I wanted” and might be adjusted as soon as the Legislature’s fall veto session.
But any cut would have to be “revenue neutral” — offset by revenue from closing corporate “tax loopholes,” Mr. Cullerton said. Or, he added, the rate could be cut if revenue from the recent hike exceed expectations. […]
“We hope we can bring it (the tax rate) down,” Mr. Cullerton said. “We’ll talk with the Republicans to see if we can close the loopholes.”
Added the president, “We in the Senate always wanted to lower the corporate rate….It’s gone higher than we wanted it to go….We’re open to suggestions.”
Closing corporate loopholes always sounds very easy, but it’s definitely not. Those loopholes were put in place by powerful interests. Killing them off means going up against those very same powerful interests.
- Michelle Flaherty - Tuesday, Jun 14, 11 @ 4:21 pm:
Rich, isn’t this exactly what you wanted to hear?
- Rich Miller - Tuesday, Jun 14, 11 @ 4:31 pm:
Mostly, yes.
- MOON - Tuesday, Jun 14, 11 @ 4:32 pm:
How can the corporate rate be lowered without a lower individual rate? I thought there was a ratio between these 2 rates.
- TwoFeetThick - Tuesday, Jun 14, 11 @ 4:37 pm:
MOON, the corporate rate cannot exceed the individual rate by a ratio of more than 8 to 5. You can lower it, you just can’t raise it beyond that ratio.
- Elo Kiddies - Tuesday, Jun 14, 11 @ 4:38 pm:
@MOON:
SECTION 3. LIMITATIONS ON INCOME TAXATION
(a) A tax on or measured by income shall be at a non-graduated rate. At any one time there may be no more than one such tax imposed by the State for State purposes on individuals and one such tax so imposed on corporations. In any such tax imposed upon corporations the rate shall not exceed the rate imposed on individuals by more than a ratio
of 8 to 5.
- Yellow Dog Democrat - Tuesday, Jun 14, 11 @ 4:43 pm:
@Moon -
Corporate tax rates cannot exceed 8/5 of the personal income tax.
But they don’t have to reach that limit, and in fact, right now they are already lower than the limit.
I’m all for lowering the corporate tax rate by closing loopholes, but Democrats would be foolish to go into the primary season lowering corporate tax rates while leaving the personal income tax in place.
If Republicans aren’t going to agree to borrowing, Democrats ought to get rid of the income tax surcharge intended to pay for that borrowing, for starters.
And, the personal income tax ought to be lowered to re-establish the 8/5 ratio.
How does 4.25 for the personal income tax and 6.8% for the corporate income tax sound?
- MOON - Tuesday, Jun 14, 11 @ 4:44 pm:
THANKS
- Yellow Dog Democrat - Tuesday, Jun 14, 11 @ 4:45 pm:
BTW, while I agree those loopholes exist for some very powerful interests, they’ve never been pitted head-to-head against CME and all of the other employers, large and small.
It’s a good match-up for the Death Cage.
- steve schnorf - Tuesday, Jun 14, 11 @ 4:50 pm:
We have to be careful, or madness will be upon us after several days of relative sanity budgetarily. Remember, we are barely above water(or not?) structurally, with no plan for paying off old bills. From a budget perspective we need to be looking at the numbers over the next 3 1/2 years to see if we can pay our daily expenses, and pay down some if not all, of the old debt.
That’s going to be hard enough. And when the “temporary” portion of the tax ends we will be right back to about where we started, structurally imbalanced, and old debt.
- TwoFeetThick - Tuesday, Jun 14, 11 @ 4:51 pm:
I think if they lower the corporate rates and offset that with closing loopholes, it would be a political wash for the Dems. The problem, however, is as Rich noted in the opening: closing loopholes is easier said than done. The bigger the loophole, the more money closing it will bring in, and the more powerful the interests defending it will be. If the Dems have to nickel and dime closing loopholes that benefit smaller businesses because those are the only ones that don’t have powerhouse lobbyists defending them, lowering the rate might not provide much benefit to smaller businesses.
- Truthteller - Tuesday, Jun 14, 11 @ 4:54 pm:
Revenue neutral presumes corporations are paying their fair share of taxes. Are they? Business was just handed $400 million in worker comp savings.
Motorola just got $100 million to stay in Illinois.
Every dime less businesses pay means individuals pay a dime more or there is a dime less for education, social services and public safety.
How does percentage of total state revenue paid by corps. compare to the past and to what businesses pay in other states? Shouldn’t we look at the facts before we start jumping when business speaks.
These guys are extorting money from the state. How about a moratorium and a study?
- Yellow Dog Democrat - Tuesday, Jun 14, 11 @ 4:58 pm:
@TwoFeetThick:
I’ve said it before and I’ll say it again: lowering corporate rates while leaving the personal income tax hike in place is an idiotic move.
I also agree with Schnorf that you ought to make sure that the move is revenue neutral not just this year but in out years.
Frankly, since the corporate tax hike is set to repeal anyway, getting rid of the $1.5 billion in tax loopholes now and forever in exchange for rolling back tax rates a little earlier should work out financially.
- Yellow Dog Democrat - Tuesday, Jun 14, 11 @ 5:02 pm:
Part of my argument, BTW, is that the personal income tax rate influences CEOs as much or more than the corporate tax rate.
Corporate profits are much easier to bookkeep away.
- TwoFeetThick - Tuesday, Jun 14, 11 @ 5:22 pm:
@YDD
The Republicans are certainly not going to vote against rolling back the corporate rate. If they’re smart, they’ll vote for that bill even if it closes some loopholes they like. If they vote for it too, they probably won’t bash the Dems with it come election time (no sense writing your opponents’ mail pieces for them, what comes around goes around). Sure, the Dems might face an issue in a primary but, in the end, they can argue that they didn’t cut corporate taxes if they closed an equal amount of loopholes.
- soccermom - Tuesday, Jun 14, 11 @ 5:27 pm:
Politically, I think you could reduce the corporate if you also increased the EITC and the personal exemption. But then you run into serious revenue problems, and I can’t see any likelihood of offsetting those lost revenues with cuts.
- Balance - Tuesday, Jun 14, 11 @ 6:00 pm:
Two scenarios and a wild card -
Scenario one - Cullerton is going rougue. If so, this is going nowhere without Madigan’s support. The senate Democrats already want to spend more than Madigan. This would require that Madigan squeeze more, so Cullerton might have trouble getting support from his own caucus.
Scenario two - Cullerton and Madigan are working together and this is not planned to pass, but it gives the appearance that some Democrats are trying to work with business.
Wild card - Quinn. As much as he has been sucking up to big business lately, Quinn needs all the revenue he can get. Plus, in 2014, does he really want to be potentially painted as caving in to big business?
(Assumption - no way can they “unloophole” enough to make up the lost revenue.)
- Cincinnatus - Tuesday, Jun 14, 11 @ 9:18 pm:
Closing loopholes, ha! Next we’ll be hearing the mantra of “waste, fraud and abuse.” And what changed since January when raising taxes was all the rage?
How ’bout this, let’s leave taxes right where they are and try to do some responsible budgeting until our fiscal house is in order.
- Aldyth - Wednesday, Jun 15, 11 @ 7:01 am:
How about paying off overdue bills before cutting anybody’s taxes?
- sad - Wednesday, Jun 15, 11 @ 7:54 am:
This cullerton quote simply shines a light on what is wrong with this country. It’s not just republicans that will fall all over themselves to serve their corporate masters nowadays
- Precinct Captain - Wednesday, Jun 15, 11 @ 10:47 am:
Can the state cut subsidies, tax credits, and other loopholes? It’ll be tough. Just this week in the US House, a bill brought to the floor through the appropriations committee which cut farm payments was brought down on the floor because of the rules placed on the bill by the rules committee.
- John P. - Wednesday, Jun 15, 11 @ 11:16 pm:
How about we just cut spending to make up the differences?????