As people age and retire they seek lower taxes and warmer winter weather. Look at Florida, Nevada and Arizona. Growing populations, and lots of former Illinoians living there! Warm winters and no state income taxes in all 3! Let state government take note!
You have to look at total tax burden to be fair. WI is in the worst category for total tax burden. IA is below IL, in spite of its progressive income tax.
People are not going to WI for the weather or the taxes. It is scenic for sure, nice to visit from here in Northern IL.
There’s obviously a lot more to the story and the Pantagraph has already chosen a side, it appears.
Th pantagrapgh is taking lessons form Tribune editorial board on logic and fairness. Illinois has had a structural deficit for 30 years and its lowest earning citizens pay the highest percentage of income in state and local taxes. Thats why we have cut public safety by 21%, Hum,n services by 31%, Higher ed by 39% and k12 education by 10% since FY2000. Illinois cannot make enough tax revenue to suppport a modern economy by taxing its lowest paid people the highest.
@word,
You are quoting static numbers though… just looking at population size
Illinois
Population, percent change, April 1, 2010 to July 1, 2012 0.3%
Wisonsin
Population, percent change, April 1, 2010 to July 1, 2012 0.7%
Iowa
Population, percent change, April 1, 2010 to July 1, 2012 0.9%
All on google also, you do the same for GDP.
Their argument is growth, not just flat static numbers. Not saying they are all correct, but taking a flat number where we lead and not looking at change over time doesnt win the argument. If it did California’s numbers swamp everyone right?
It doesn’t matter if they are talking about growth or not. The argument is compete bs. As has already been mentioned, WI has both higher income taxes and a higher overall tax burden. IA has a progressive income tax. If the silly paper wants to make the argument that taxes matter, and that is why IA and WI have growing populations, then shouldn’t they be supporting a progressive income tax in IL?
Oh, and by the way, Pantagraph — IL’s tax rate was 3%, not 3.75%, before the tax increase.
I love the discussion of something that is not really in play here. Yes, some folks are saying that we need a progressive or graduated tax in Illinois, but this is only talk. To accomplish this, a constitutional amendment would have to be passed. That’s not happening folks.
IMHO, the Pantagraph and others have bitten on a bogeyman thrown out there by extremists trying to garner support for government cuts. They’re even running adds focusing on legislators, like Raymond Poe.
Good one, Now how does that help Illinois? it doesnt. If you have two families. One makes 200K a year but spends 210K and one makes 100K a year but spends 90K Who is better off over the next 5 years?
What your number is today means jack. trends are what matters and shows pattern. I am sorry you dont like that, but in 5 or 10 years Family w/ 100K income will have a nice account and growth. The 200K family? Making 2x the other didnt solve its problem. Trends, not static data only mean things.
Ignoring a trend doesnt make it go away. We have to look at this in Illinois. Not saying the news article is right. just saying we do have to compare ourselves, our growth rate, our tax schedules, unemployment, etc year over year.
To ignore it doesnt make it go away.
- Robert the Bruce - Tuesday, May 7, 13 @ 1:53 pm:
Using wordslinger’s top progressive tax rates and “Really”’s growth rates, one could observe that the higher the top income tax rate is, the higher the state’s growth rate is.
IA: 8.98% top tax rate; 0.9% growth
WI: 7.75% top tax rate; 0.7% growth
IL: 5% top (flat) tax rate; 0.3% growth
Of course the truth is more complicated than that, but next time somebody tries to argue that high taxes on the highest incomes hurt growth, be skeptical - those with highest incomes do spend a lower percentage of their incomes than others.
I will stipulate that Wisconsin has higher taxes, but the Badgers seem to get a better return on their tax dollars in terms of services and public works projects. Roads actually get paved properly and public employees are supposed to at least pretend to put in eight hour days.
If Illinois could eliminate waste and no show employees, I think that our state income tax rate could be reduced by at least a percentage point.
Example 1: family has income of $200,000 and with a flat 5% rate, pays $10,000 in Illinois income taxes - and has $190,000 left over to live on. That $10,000 spent on taxes means they may not be able to buy a new car every year.
Example 2: family has income of $20,000 and with a 5% flat tax, it pays $1000 in Illinois income tax and has $19,000 left over to live on. That $1000 they paid in taxes probably means less food, not being able to fix the car, not being able to go to the doctor.
The flat tax hurts those at the lower end much more than those at the higher end.
Here’s something interesting from the Wisconsin front. The state did a poor job giving away business tax breaks without accountability and received a scathing audit. The Wisconsin Economic Development Corp., a state job creation agency, gave away around $1 million in tax credits to companies “to ineligible recipients, for ineligible products and for ineligible amounts.”
If IL had the IA or WI state tax system, Springfield would have several $billion dollars more a year in revenues than currently. Not only do IA and WI both have graduated income taxes, but WI is one of the top states in taxing services, while IL ranks 47th in that regard.
but you are assuming that there is a right to more money simply because someone earns it. Of course you use two hugely different numbers (20k and 200k).
What about 20k and 40k or 40k and 60k?
When I worked construction (I will round up) I made $20/hour. But I could frame, do finish work and tile and drywall. Plus I worked overtime like crazy.
The guy I worked with most was a framer, couldn’t do most other stuff and he only made about $15 an hour. AND he never worked overtime. hated it.
20/hour is about 40K per year. plus my over time about 60k a year. my 5% of that is 3K 57K “left over”
his $15 an hour is 30k, 1.5k tax, and 28.5k left over.
Should the guy making 60k pay more since he has more left over?
Its easy to talk about 200K and compare to 20k, but making 20K you aren’t paying taxes (income) anyway.
But you have to be willing to not only take from the guy above you but to also let those below you take from you…
Here is another way to think of it. A study shows that Illinoisans in the bottom 20% of income pay 14% of their income to state, local sales,and other in-state taxes.
Those Illinoisans in the top 20% of income pay 6% of their income to state, local,sales, and other in-state taxes.
The report says that if left the middle 60% alone - and then switched the bottom 20% to paying 6% of their income to state and local taxes — and had the top 20% pay 14% of their income to state and local taxes — Illinois would generate an additional $30 billion in revenue annually.
- MrJM - Tuesday, May 7, 13 @ 11:37 am:
And the federal progressive income tax is probably the reason that the United States is facing an emigration crisis.
– MrJM
- Reality Check - Tuesday, May 7, 13 @ 11:39 am:
Iowa and Wisconsin both have progressive tax structures, of course, and most rates are higher than our lone flat one.
So I guess they’re making the opposite argument?
- John A Logan - Tuesday, May 7, 13 @ 11:42 am:
Look. A Kitty.
- RonOglesby - Tuesday, May 7, 13 @ 11:44 am:
Its true. Never met anyone that said they moved to Wisconsin because of the weather.
- steve schnorf - Tuesday, May 7, 13 @ 11:50 am:
As does Illinois have a growing population
- Billy - Tuesday, May 7, 13 @ 11:51 am:
As people age and retire they seek lower taxes and warmer winter weather. Look at Florida, Nevada and Arizona. Growing populations, and lots of former Illinoians living there! Warm winters and no state income taxes in all 3! Let state government take note!
- Michelle Flaherty - Tuesday, May 7, 13 @ 11:54 am:
Looks like someone in Bloomington is auditioning for the Trib edit board.
- CarrollCounty - Tuesday, May 7, 13 @ 11:55 am:
http://www.usatoday.com/story/money/personalfinance/2013/03/02/state-local-tax-burden/1937757/
You have to look at total tax burden to be fair. WI is in the worst category for total tax burden. IA is below IL, in spite of its progressive income tax.
People are not going to WI for the weather or the taxes. It is scenic for sure, nice to visit from here in Northern IL.
There’s obviously a lot more to the story and the Pantagraph has already chosen a side, it appears.
- nothin's easy - Tuesday, May 7, 13 @ 12:01 pm:
Arizona has a higher income tax than illinois and…it taxes pensions.
- INDEPENDENT - Tuesday, May 7, 13 @ 12:04 pm:
Th pantagrapgh is taking lessons form Tribune editorial board on logic and fairness. Illinois has had a structural deficit for 30 years and its lowest earning citizens pay the highest percentage of income in state and local taxes. Thats why we have cut public safety by 21%, Hum,n services by 31%, Higher ed by 39% and k12 education by 10% since FY2000. Illinois cannot make enough tax revenue to suppport a modern economy by taxing its lowest paid people the highest.
- wordslinger - Tuesday, May 7, 13 @ 12:08 pm:
–As people age and retire they seek lower taxes and warmer winter weather.–
Tell us, Billy, you seem well-versed on the subject: what’s the Illinois tax rate on retirement income?
Fascinating editorial. Who knew you could cram so much stupid in two sentences?
Iowa top progressive rate: 8.98%
Wisconsin top progressive rate: 7.75%
Illinois flat rate: 5%
Iowa population: 3.1 million
Wisconsin population: 5.7 million
Illinois population: 12.9 million
Iowa GDP: $147,200 millions (30th)
Wisconsin GDP: $251,400 millions (20th)
Illinois GDP: $644,200 millions (5th)
Gee, that took all of five minutes on the google. Someone clue in the Pantagraph on how to use it.
- Really - Tuesday, May 7, 13 @ 12:25 pm:
@word,
You are quoting static numbers though… just looking at population size
Illinois
Population, percent change, April 1, 2010 to July 1, 2012 0.3%
Wisonsin
Population, percent change, April 1, 2010 to July 1, 2012 0.7%
Iowa
Population, percent change, April 1, 2010 to July 1, 2012 0.9%
All on google also, you do the same for GDP.
Their argument is growth, not just flat static numbers. Not saying they are all correct, but taking a flat number where we lead and not looking at change over time doesnt win the argument. If it did California’s numbers swamp everyone right?
- dave - Tuesday, May 7, 13 @ 1:05 pm:
It doesn’t matter if they are talking about growth or not. The argument is compete bs. As has already been mentioned, WI has both higher income taxes and a higher overall tax burden. IA has a progressive income tax. If the silly paper wants to make the argument that taxes matter, and that is why IA and WI have growing populations, then shouldn’t they be supporting a progressive income tax in IL?
Oh, and by the way, Pantagraph — IL’s tax rate was 3%, not 3.75%, before the tax increase.
How are editorial boards so stupid?
- wordslinger - Tuesday, May 7, 13 @ 1:14 pm:
– but taking a flat number where we lead and not looking at change over time doesnt win the argument.–
Um, I think if you want to make the argument “change over time” I’d come to the same conclusion. “Change over time” is how you arrive at today.
- foster brooks - Tuesday, May 7, 13 @ 1:21 pm:
And if they enacted tougher DUI and liquor laws in Wisconsin people would flee by the tbousands
- Norseman - Tuesday, May 7, 13 @ 1:32 pm:
I love the discussion of something that is not really in play here. Yes, some folks are saying that we need a progressive or graduated tax in Illinois, but this is only talk. To accomplish this, a constitutional amendment would have to be passed. That’s not happening folks.
IMHO, the Pantagraph and others have bitten on a bogeyman thrown out there by extremists trying to garner support for government cuts. They’re even running adds focusing on legislators, like Raymond Poe.
- RonOglesby - Tuesday, May 7, 13 @ 1:50 pm:
@ word…
—Change over time is how you arrive at today—
Good one, Now how does that help Illinois? it doesnt. If you have two families. One makes 200K a year but spends 210K and one makes 100K a year but spends 90K Who is better off over the next 5 years?
What your number is today means jack. trends are what matters and shows pattern. I am sorry you dont like that, but in 5 or 10 years Family w/ 100K income will have a nice account and growth. The 200K family? Making 2x the other didnt solve its problem. Trends, not static data only mean things.
Ignoring a trend doesnt make it go away. We have to look at this in Illinois. Not saying the news article is right. just saying we do have to compare ourselves, our growth rate, our tax schedules, unemployment, etc year over year.
To ignore it doesnt make it go away.
- Robert the Bruce - Tuesday, May 7, 13 @ 1:53 pm:
Using wordslinger’s top progressive tax rates and “Really”’s growth rates, one could observe that the higher the top income tax rate is, the higher the state’s growth rate is.
IA: 8.98% top tax rate; 0.9% growth
WI: 7.75% top tax rate; 0.7% growth
IL: 5% top (flat) tax rate; 0.3% growth
Of course the truth is more complicated than that, but next time somebody tries to argue that high taxes on the highest incomes hurt growth, be skeptical - those with highest incomes do spend a lower percentage of their incomes than others.
- Esquire - Tuesday, May 7, 13 @ 2:07 pm:
I will stipulate that Wisconsin has higher taxes, but the Badgers seem to get a better return on their tax dollars in terms of services and public works projects. Roads actually get paved properly and public employees are supposed to at least pretend to put in eight hour days.
If Illinois could eliminate waste and no show employees, I think that our state income tax rate could be reduced by at least a percentage point.
- Joe M - Tuesday, May 7, 13 @ 2:20 pm:
Example 1: family has income of $200,000 and with a flat 5% rate, pays $10,000 in Illinois income taxes - and has $190,000 left over to live on. That $10,000 spent on taxes means they may not be able to buy a new car every year.
Example 2: family has income of $20,000 and with a 5% flat tax, it pays $1000 in Illinois income tax and has $19,000 left over to live on. That $1000 they paid in taxes probably means less food, not being able to fix the car, not being able to go to the doctor.
The flat tax hurts those at the lower end much more than those at the higher end.
- Grandson of Man - Tuesday, May 7, 13 @ 2:35 pm:
Here’s something interesting from the Wisconsin front. The state did a poor job giving away business tax breaks without accountability and received a scathing audit. The Wisconsin Economic Development Corp., a state job creation agency, gave away around $1 million in tax credits to companies “to ineligible recipients, for ineligible products and for ineligible amounts.”
http://milwaukeecourieronline.com/index.php/2013/05/04/audit-finds-serious-flaws-with-wisconsin-jobs-agency-as-state-comes-in-last-on-job-growth-report/
And some people only want to talk about the supposed waste, fraud and abuse of state employees.
- reformer - Tuesday, May 7, 13 @ 4:21 pm:
If IL had the IA or WI state tax system, Springfield would have several $billion dollars more a year in revenues than currently. Not only do IA and WI both have graduated income taxes, but WI is one of the top states in taxing services, while IL ranks 47th in that regard.
- RonOglesby - Tuesday, May 7, 13 @ 5:00 pm:
@Joe,
but you are assuming that there is a right to more money simply because someone earns it. Of course you use two hugely different numbers (20k and 200k).
What about 20k and 40k or 40k and 60k?
When I worked construction (I will round up) I made $20/hour. But I could frame, do finish work and tile and drywall. Plus I worked overtime like crazy.
The guy I worked with most was a framer, couldn’t do most other stuff and he only made about $15 an hour. AND he never worked overtime. hated it.
20/hour is about 40K per year. plus my over time about 60k a year. my 5% of that is 3K 57K “left over”
his $15 an hour is 30k, 1.5k tax, and 28.5k left over.
Should the guy making 60k pay more since he has more left over?
Its easy to talk about 200K and compare to 20k, but making 20K you aren’t paying taxes (income) anyway.
But you have to be willing to not only take from the guy above you but to also let those below you take from you…
- Joe M - Tuesday, May 7, 13 @ 6:22 pm:
Here is another way to think of it. A study shows that Illinoisans in the bottom 20% of income pay 14% of their income to state, local sales,and other in-state taxes.
Those Illinoisans in the top 20% of income pay 6% of their income to state, local,sales, and other in-state taxes.
The report says that if left the middle 60% alone - and then switched the bottom 20% to paying 6% of their income to state and local taxes — and had the top 20% pay 14% of their income to state and local taxes — Illinois would generate an additional $30 billion in revenue annually.
http://enews.faireconomy.org/2011/flip_it_state_sheets/illinois.pdf