Capitol Fax.com - Your Illinois News Radar » *** UPDATED x1 *** House and Senate to tackle business tax structure as lots of unfinished items remain on table
Illinois Senate President John Cullerton and House Speaker Michael Madigan announced today a joint House-Senate Revenue Committee review of the state’s business tax structure in the months ahead.
This joint effort will be led by State Rep. John Bradley and State Sen. Toi Hutchinson.
Speaker Madigan said he expects the review to involve key groups and leaders representing businesses big and small throughout the state.
“I see this as a timely opportunity for critics and advocates alike to participate in the process and offer their views on what the state’s business policies should be,” Madigan said.
Input would be sought from groups such as the Illinois Chamber of Commerce, Illinois Manufacturers’ Association, Illinois Retail Merchants Association, National Federation of Independent Business, Chicagoland Chamber of Commerce, Illinois Construction Industry Committee and the Civic Committee of The Commercial Club of Chicago.
President Cullerton said there’s a growing sense of urgency regarding the need to reform the state’s current business tax structure, a system often derided in the media as so filled with loopholes that it resembles Swiss cheese.
“We need to take a holistic approach to business taxes as opposed to the continued piecemeal policies that often pit one business against another,” Cullerton said.
The issue of tax policy continues to garner headlines as breaks and exemptions for major businesses have come under scrutiny from both the media and within the business community. CME Group Executive Chairman Terrence Duffy and Caterpillar CEO Doug Oberhelman have been among the business leaders who’ve expressed concerns with the state’s existing business tax structure.
In addition, the Associated Press recently reported that more than $100 million worth of state tax exemptions for numerous companies will expire over the next three years.
That was pretty carefully worded. No confirmation as of yet that this means they’ll look at reducing the corporate tax rate. Senate President Cullerton promised CME Group’s chairman he’d address the tax hike not long ago.
Madigan spokesman Steve Brown did not offer any hope that the legislative initiative would result in a rolling back of that tax increase, which is scheduled to revert to its past rate in 2014 and could not be cut under the state Constitution without also doing so to the tax rate paid by individuals.
“There is a constitutional provision that would have to be adhered to. I’m not going to go down that alley because it might pre-empt the work of the joint committees,” Brown said.
Actually, no. The state Constitution sets a cap on how high the corporate tax rate can go in relation to the individual rate. There is no floor…
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.
The speaker’s aide also suggested further workers’ compensation reforms would not be on the committees’ radar. While the General Assembly did pass a workers’ compensation package, it did not include business’ No. 1 goal of beefing up standards to ensure businesses don’t wind up paying bills for an injured worker if their injury occurred away from the workplace, like a weekend softball game.
“You may want to look at the impact of enterprise zones, of [tax-increment finance districts], a wide range of different incentives that are available. Some are helpful; some may be outmoded. I don’t think we’ll prejudge any particular action,” Brown said.
A parliamentary hold Senate President John Cullerton placed on legislation that would authorize a Chicago casino could stay in place through the fall, the top Senate Democrat said Wednesday.
That pronouncement came on a busy day when lawmakers sent Gov. Pat Quinn a spending bill to preserve funding for billions of dollars in construction projects and gave final approval to a plan to cut lawmakers’ pay.
Cullerton’s move is aimed at buying time for negotiations with Quinn on a follow-up bill designed to narrow the scope of the gambling package that passed in May with Mayor Rahm Emanuel’s backing. […]
“There’s no sense in giving it to him to veto it,” Cullerton told reporters.
Even though the bill passed the House and Senate, Cullerton has the power under Senate rules to keep the legislation in his chamber through the end of this term of the General Assembly, which ends in January 2013.
Last month, Senate Democrats slowed approval when they attached $430 million in spending on schools, social services and other areas to the construction legislation. The House refused to go along, and lawmakers left town. Quinn later threatened to shut down construction projects throughout the state by July 1, a move that would have idled thousands of workers.
The Senate backed off the extra spending, and lawmakers sent a construction bill to Quinn on Wednesday.
“In light of the governor’s action, we obviously didn’t want to jeopardize the capital (construction) bill,” said Senate President John Cullerton, D-Chicago. “We’ll take up the shortcomings of the House budget that we did pass when we come back.”
The Regional Transportation Agency said today that service cuts could occur on the CTA, Metra and Pace as early as July if the state fails to pay part of the nearly $400 million it owes the RTA.
The RTA said it has exhausted its ability to borrow. This borrowing has been used to bridge the cash shortfalls caused until now by delinquent state payments.
Sen. Kyle McCarter brought a whole roast pig to a news conference at the state Capitol. The Lebanon Republican said he was trying to draw attention to spending policies that he compares to “a pig on a feeding frenzy.”
McCarter claims Illinois government spending is climbing too fast. He says the temporary income tax increase will wind up being made permanent to pay for the increases.
Democrats, however, point out that much of the new spending covers costs that were ignored last year, such as government pensions. They also say spending was cut for many programs.
McCarter last month alleged that fellow Sen. Mike Jacobs, D-East Moline, punched him in the chest during a Senate floor argument over utility legislation. Jacobs was mad that McCarter had made a speech chiding Jacobs for ushering a bill friendly to the utility industry—for which Jacobs’ father, ex-Sen. Denny Jacobs, D-East Moline, is a lobbyist.
The younger Jacobs has claimed the physical gesture in question was more of a tap than a punch, but he has issued a public apology.
For awhile there, it looked like this one might be headed to court (McCarter’s complaint was forwarded to a local prosecutor, who declined to file charges), but things seem to have settled down.
“I just talked to him today. I don’t have anything against him,” McCarter said of Jacobs after today’s news conference. He insisted he wasn’t accusing Jacobs of impropriety in pushing the pro-utility bill, but only of failing to avoid “the appearance of impropriety.”
The Illinois Senate did not vote Wednesday on a bill that would have allowed Gov. Pat Quinn to boot nearly 2,000 state employees out of their unions and prevent another 1,700 from going into collective bargaining. Senate President John Cullerton, D- Chicago, said the bill was shelved after it became clear there were not enough votes for its passage.
* Press release: Governor Quinn Announces $100 Million Capital Funding for Local Transportation Projects
* Leaders kick off official push for Rockford gaming casino
* Editorial: Workers’ comp bill a good start on reform
* Some businesses say workers’ comp bill doesn’t go far enough: An employee of his, whom he declined to name, was a skydiver with more than 2,000 jumps, Knight said. That employee worked for one year, then stood up one day and needed a knee replacement, he said.
“A quick look at this last session and you can find numerous bills where Sen. McCarter’s calling (to speak out on corruption and conflicts of interests) didn’t seem to manifest itself on the senate floor. Take SB0107, a bill that lowers the intrastate switched access rates and limits the Illinois Commerce Commissions regulation powers in regards to telephone and internet service deliveries. This bill was sponsored by…Sen. Mc Carter… without a single mention of the thousands of dollars Sen. McCarter received from a local St. Jacob telephone and internet service provider who stands to benefit from the bill’s passage. Apparently Sen. McCarter only finds the lack of conflict of interest disclosures troubling when it isn’t him sponsoring.”
“Some businesses say workers’ comp bill doesn’t go far enough: An employee of his, whom he declined to name, was a skydiver with more than 2,000 jumps, Knight said. That employee worked for one year, then stood up one day and needed a knee replacement, he said.”–So true! It is not about rates to providers–it is about the ability to insert common sense into the system and untie employers hands from behind their backs.
BolandFan, you’ve posted that story twice. Don’t do it again. McCarter was a co-sponsor, not the chief sponsor. He wasn’t even a hyphenated co-sponsor. It’s not a story.
it’s about time for a tax overhaul, but you can bet the farm the entrenched interests in this State won’t give an inch, or they will threaten to leave…Good luck dealing with these behomoths cuz you’re gonna need it boys and girls…
Lower the Corporate Income Tax back to 5%. Raise the Partnership Replacement Tax (LLC,etc.) to 2+1/2% matching the corporate Replacement Tax.
The Big cash players are already moving what they can somewhere with no tax(Florida,Caymen).
This comment board does not seem to follow the state cash flows. We only seem to know how late Illinois bills are paid.
The big cash players are not regular corporations.
They are LLC, S-Corp and partnerships. The corporations set up these entities for investors and highly compensated employees. Many pay no state tax because it is flow through income. Also, large estates are set up this way.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 3:45 pm:
=== beefing up standards to ensure businesses don’t wind up paying bills for an injured worker if their injury occurred away from the workplace, like a weekend softball game. ===
Jeez, McKinney, ever actually read the law, or just the Chamber’s press releases?
An injury has to be work-related in order to qualify for worker’s comp.
If you sprain your knee playing softball on the weekend and try to file it as a worker’s comp injury, you can go to jail. Under the OLD law.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 3:47 pm:
@Loop Lady -
I’d love to see newspapers threaten to leave. LOL.
Go out of business, maybe. But the Trib is not moving to Gary or Kenosha.
Sorry Rich, I doubt I was wrong.
More importantly I was seeking to not issue the joint committee’s final report BEFORE it even convend.
As you know some of your brothers and sisters in news want the final score before the first pitch
If the 8:5 ratio was a floor on the corporate rate, rather than a ceiling, the current 7% corporate/5% individual rate structure is unconstitutional.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 4:20 pm:
=== Yeah, one percent. ===
That’s the definition of a no-fault system.
But anyone who believes Illinois’ high work comp rates are being caused by weekend softball injuries or similar red herrings is deluded.
The root of the business community’s call for “causation” is that when they hire a carpenter with 11 years of experience and he develops a repetitive motion injury 9 years later, they want to be able to claim that his current employer is only 45% responsible.
Sorry: you hired him for his experience, and the wear-and-tear comes with it.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 4:22 pm:
Senator McCarter today filed charges, alleging the subject pig was roasted a golden brown with intent to be delicious.
- Alexander cut the knot. - Thursday, Jun 23, 11 @ 5:29 pm:
You could lower the corporate rate to zero and leave the personal rate the same, or you could raise the personal rate to the same as the corporate rate — either way, the 8:5 ratio would not be violated - the corporate rate cannot exceed the personal rate by more than the 8:5 ratio.
The four largest tax loopholes are all INDIVIDUAL tax loopholes.
The sales tax exemption on food & medicine ($1.6 billion), the federall taxed retirement and Social Security subtraction ($921 million), the standard exemption for taxpayers and dependents ($622 million), and the tax credit for residential property ($521 million).
These four alone account for almost $3.7 billion of the total $6.6 billion in tax incentives according to the Comptroller’s Tax Expenditure report.
Corporate income tax incentives totaled only $345 million in 2009 (latest online report).
So, if we want to get at the root problem and make it “fair”, then we first need to address these INDIVIDUAL tax loopholes.
1776, I look forward to you leading the granny tax effort to be followed by the tax on granny’s medicine and food.
In a media-less world, the logic might work. Alas …
You’re proving my point. It’s easy to criticize employers for incentives but nobody wants to look at themselves. It’s the pot calling the kettle black. Cullerton broached (did not advocate for) taxing SS income and was pilloried.
- BolandFan - Thursday, Jun 23, 11 @ 1:03 pm:
“A quick look at this last session and you can find numerous bills where Sen. McCarter’s calling (to speak out on corruption and conflicts of interests) didn’t seem to manifest itself on the senate floor. Take SB0107, a bill that lowers the intrastate switched access rates and limits the Illinois Commerce Commissions regulation powers in regards to telephone and internet service deliveries. This bill was sponsored by…Sen. Mc Carter… without a single mention of the thousands of dollars Sen. McCarter received from a local St. Jacob telephone and internet service provider who stands to benefit from the bill’s passage. Apparently Sen. McCarter only finds the lack of conflict of interest disclosures troubling when it isn’t him sponsoring.”
Huffington Post
on Sen. Kyle McCarter
Yesterday
- Anonny - Thursday, Jun 23, 11 @ 1:04 pm:
“Some businesses say workers’ comp bill doesn’t go far enough: An employee of his, whom he declined to name, was a skydiver with more than 2,000 jumps, Knight said. That employee worked for one year, then stood up one day and needed a knee replacement, he said.”–So true! It is not about rates to providers–it is about the ability to insert common sense into the system and untie employers hands from behind their backs.
- Rich Miller - Thursday, Jun 23, 11 @ 1:05 pm:
Anonny, you apparently don’t get the irony of a skydiver with 2000 jumps whose employer doubts his injured knee.
- Rich Miller - Thursday, Jun 23, 11 @ 1:09 pm:
BolandFan, you’ve posted that story twice. Don’t do it again. McCarter was a co-sponsor, not the chief sponsor. He wasn’t even a hyphenated co-sponsor. It’s not a story.
- Rich Miller - Thursday, Jun 23, 11 @ 1:12 pm:
Also, BolandFan, you deliberately (twice) left out the fact that another co-sponsor was Sen. Jacobs.
I’m not going to warn you again, either. You cross the line like that again, you’re gone.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 1:13 pm:
1. Close the $1.5 billion in corporate loopholes.
2. Close the sales tax loopholes for services by $1 billion.
3. Lower the personal income tax, corporate income tax, and sales tax rates by a combined $2.5 billion.
4. Keep it revenue neutral.
5. Small business owners and working families win.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 1:14 pm:
6. Don’t tax CapitolFax.
- wordslinger - Thursday, Jun 23, 11 @ 1:24 pm:
Some of the Big Guys who have been beefing might want to get a move on in locking down their own deals.
- Loop Lady - Thursday, Jun 23, 11 @ 1:45 pm:
it’s about time for a tax overhaul, but you can bet the farm the entrenched interests in this State won’t give an inch, or they will threaten to leave…Good luck dealing with these behomoths cuz you’re gonna need it boys and girls…
- lincoln's beard - Thursday, Jun 23, 11 @ 1:54 pm:
I wonder if we’ll see Rep. Bradley sponsor a “repeal the whole corporate tax system” bill alongside this reform effort.
- gg - Thursday, Jun 23, 11 @ 2:07 pm:
Lower the Corporate Income Tax back to 5%. Raise the Partnership Replacement Tax (LLC,etc.) to 2+1/2% matching the corporate Replacement Tax.
The Big cash players are already moving what they can somewhere with no tax(Florida,Caymen).
This comment board does not seem to follow the state cash flows. We only seem to know how late Illinois bills are paid.
- wordslinger - Thursday, Jun 23, 11 @ 2:16 pm:
GG, who are the Illinois “Big Cash” players “moving what they can” to Fla/Cayman Islands? What corporations are you talking about?
- gg - Thursday, Jun 23, 11 @ 2:30 pm:
The big cash players are not regular corporations.
They are LLC, S-Corp and partnerships. The corporations set up these entities for investors and highly compensated employees. Many pay no state tax because it is flow through income. Also, large estates are set up this way.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 3:45 pm:
=== beefing up standards to ensure businesses don’t wind up paying bills for an injured worker if their injury occurred away from the workplace, like a weekend softball game. ===
Jeez, McKinney, ever actually read the law, or just the Chamber’s press releases?
An injury has to be work-related in order to qualify for worker’s comp.
If you sprain your knee playing softball on the weekend and try to file it as a worker’s comp injury, you can go to jail. Under the OLD law.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 3:47 pm:
@Loop Lady -
I’d love to see newspapers threaten to leave. LOL.
Go out of business, maybe. But the Trib is not moving to Gary or Kenosha.
And they get at least a couple of tax breaks.
- Rich Miller - Thursday, Jun 23, 11 @ 3:49 pm:
===An injury has to be work-related in order to qualify for worker’s comp.===
Yeah, one percent.
- Steve Brown - Thursday, Jun 23, 11 @ 3:55 pm:
Sorry Rich, I doubt I was wrong.
More importantly I was seeking to not issue the joint committee’s final report BEFORE it even convend.
As you know some of your brothers and sisters in news want the final score before the first pitch
- Pat Robertson - Thursday, Jun 23, 11 @ 4:02 pm:
If the 8:5 ratio was a floor on the corporate rate, rather than a ceiling, the current 7% corporate/5% individual rate structure is unconstitutional.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 4:20 pm:
=== Yeah, one percent. ===
That’s the definition of a no-fault system.
But anyone who believes Illinois’ high work comp rates are being caused by weekend softball injuries or similar red herrings is deluded.
The root of the business community’s call for “causation” is that when they hire a carpenter with 11 years of experience and he develops a repetitive motion injury 9 years later, they want to be able to claim that his current employer is only 45% responsible.
Sorry: you hired him for his experience, and the wear-and-tear comes with it.
- Yellow Dog Democrat - Thursday, Jun 23, 11 @ 4:22 pm:
A very rare error from Steve Brown.
- just sayin' - Thursday, Jun 23, 11 @ 4:29 pm:
Senator McCarter today filed charges, alleging the subject pig was roasted a golden brown with intent to be delicious.
- Alexander cut the knot. - Thursday, Jun 23, 11 @ 5:29 pm:
You could lower the corporate rate to zero and leave the personal rate the same, or you could raise the personal rate to the same as the corporate rate — either way, the 8:5 ratio would not be violated - the corporate rate cannot exceed the personal rate by more than the 8:5 ratio.
- 1776 - Thursday, Jun 23, 11 @ 8:11 pm:
@ Yellow Dog….
The four largest tax loopholes are all INDIVIDUAL tax loopholes.
The sales tax exemption on food & medicine ($1.6 billion), the federall taxed retirement and Social Security subtraction ($921 million), the standard exemption for taxpayers and dependents ($622 million), and the tax credit for residential property ($521 million).
These four alone account for almost $3.7 billion of the total $6.6 billion in tax incentives according to the Comptroller’s Tax Expenditure report.
Corporate income tax incentives totaled only $345 million in 2009 (latest online report).
So, if we want to get at the root problem and make it “fair”, then we first need to address these INDIVIDUAL tax loopholes.
- Michelle Flaherty - Thursday, Jun 23, 11 @ 10:17 pm:
1776, I look forward to you leading the granny tax effort to be followed by the tax on granny’s medicine and food.
In a media-less world, the logic might work. Alas …
- 1776 - Friday, Jun 24, 11 @ 3:50 pm:
@Michelle
You’re proving my point. It’s easy to criticize employers for incentives but nobody wants to look at themselves. It’s the pot calling the kettle black. Cullerton broached (did not advocate for) taxing SS income and was pilloried.