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Pick a lane, governor

Monday, Dec 4, 2017

* Finke

“Taxes are going to be the essential issue,” Gov. BRUCE RAUNER said during an appearance near Chicago [about the upcoming campaign].

More specifically, it sounds like he’s planning to focus on how bad a graduated state income tax will be for Illinois. The leading Democratic challengers have all embraced the idea of something other than the flat tax currently in force in Illinois.

Rauner wasn’t asked about state tax policy at the event, but he brought up the graduated income tax anyway. His assessment is that it is a “huge mistake.”

“Go to the states who have a graduated income tax. It’s a disaster,” Rauner said. “They can’t balance their budgets.”

He provided a handy checklist of states with a disastrous graduated income tax. They included New Jersey, California, New York and Connecticut. Rauner overlooked a couple of other states with graduated income taxes, like Iowa, Missouri and Wisconsin. And it seems like he’s had some pretty positive things to say about Wisconsin and the way it operates.

Rauner has, indeed, said nice things about Wisconsin. And, as you’ll recall, the governor of the state directly to the north with a graduated income tax recently said in a TV ad for Rauner that Wisconsin’s economy is “on fire.”

The governor of Missouri, which also has a graduated tax, said in the same ad that his state is “growing good jobs.”

So, on the one hand, Rauner spends big campaign money to tout two neighboring states with progressive income taxes as doing much better than Illinois. And on the other hand, he claims a progressive income tax hike is a “disaster.”

- Posted by Rich Miller        

71 Comments
  1. - anon2 - Monday, Dec 4, 17 @ 10:54 am:

    Most of the states with an income tax have a graduated one, and with good reason. With growing economic inequality in this country, it only makes sense to tax where the money is. Just as it makes sense to tax services in a service economy. Instead, Illinois is held back by not taxing services and more affluent residents the way Wisconsin does.


  2. - DuPage Saint - Monday, Dec 4, 17 @ 10:56 am:

    So states with progressive income taxes cannot balance their budgets? Then what is your excuse Governor?


  3. - SaulGoodman - Monday, Dec 4, 17 @ 10:58 am:

    **”Go to the states who have a graduated income tax. It’s a disaster,” Rauner said. “They can’t balance their budgets.”**

    LOL - so that’s the argument you want to make, Governor?

    Have you even looked at your own proposed budgets? Did you already forget the last 3 years?


  4. - Arsenal - Monday, Dec 4, 17 @ 10:59 am:

    30 states have progressive income taxes. If they’re all doing worse than us, then Brucey needs to pump the brakes on the “Illinois is a disaster!” rhetoric.


  5. - Saputo's Back Room - Monday, Dec 4, 17 @ 10:59 am:

    To be fair, Missouri effectively has a flat income tax rate of 6%, unless you make under $9,000/year, which I assume is not much of the tax-filing population.


  6. - 360 Degree TurnAround - Monday, Dec 4, 17 @ 10:59 am:

    Focus Governor, focus.


  7. - City Zen - Monday, Dec 4, 17 @ 11:08 am:

    ==Most of the states with an income tax have a graduated one, and with good reason.==

    Of the states that have a graduated income tax, only half of them have a top tax bracket above $60,000. The highest tax bracket in 12 states is below $30,000. Probably not what most people would define as “progressive”.

    And each of those states with a graduated income tax also tax retirement income.


  8. - Romeo - Monday, Dec 4, 17 @ 11:09 am:

    MN has a progressive income tax and they have a $1+ billion SURPLUS. Just sayin’.


  9. - Jocko - Monday, Dec 4, 17 @ 11:09 am:

    ==His assessment is that it is a “huge mistake.==

    How huge? Like touting fiscal conservatism while spending 2.8 billion -or- running for re-election with no accomplishments?


  10. - Ahoy! - Monday, Dec 4, 17 @ 11:10 am:

    Illinois tax structure of relying too heavily on property taxes is more of an issue than not having a graduated income tax. Also, graduated vs. flat is only a small part of the overall tax structure and does not even though the cost of doing business issues such as workers comp.

    Of course this also doesn’t include our decades of complete and utter fiscal mismanagement that would makes Enron look responsible.


  11. - Occasionally Blocked By Rich - Monday, Dec 4, 17 @ 11:10 am:

    =…..Wisconsin’s economy is “on fire.”=

    Illinois’ Governor’s pants are “on fire”. The man just keeps making things up as he goes along, playing to his base.


  12. - DuPage - Monday, Dec 4, 17 @ 11:13 am:

    Of course Governor Rauner is against a graduated income tax. His personal Illinois income tax would go up. By keeping the flat tax, he will save millions of dollars a year.


  13. - Anonymous - Monday, Dec 4, 17 @ 11:16 am:

    “Focus”. That’s been his plan all along.


  14. - City Zen - Monday, Dec 4, 17 @ 11:16 am:

    ==Illinois tax structure of relying too heavily on property taxes is more of an issue than not having a graduated income tax.==

    Colorado has a flat state income tax rate lower than ours (now) and significantly lower property taxes. So the riddle has been resolved elsewhere.


  15. - PJ - Monday, Dec 4, 17 @ 11:17 am:

    ===Illinois tax structure of relying too heavily on property taxes is more of an issue than not having a graduated income tax.===

    You know one of the biggest reasons we’re overly reliant on property taxes? Because we give up a large chunk of revenue by using a flat tax instead of a graduated tax.

    “But workers comp” is not a good deflection. We could bring in more revenue while also lowering the tax burden on the families who need it most by shifting to a tax that mirrors the federal structure. Have yet to hear a good argument against it.


  16. - Saluki - Monday, Dec 4, 17 @ 11:18 am:

    Facts are stubborn things.


  17. - hisgirlfriday - Monday, Dec 4, 17 @ 11:22 am:

    Illinois reliance on property taxes will only get worse when Republicans finalize a tax reform bill that completely eliminates the state and local income tax deduction and pave the way for property tax deductions up to $10,000 or more.


  18. - Blue dog dem - Monday, Dec 4, 17 @ 11:23 am:

    To suggest that Missouri has a graduated income tax($9000 cap), is a gross exaggeration.


  19. - City Zen - Monday, Dec 4, 17 @ 11:23 am:

    ==Of course Governor Rauner is against a graduated income tax. His personal Illinois income tax would go up.==

    Not necessarily. Bruce’s state tax liability would go down using graduated tax tables in Arizona, Ohio, and New Mexico.

    Graduated rates don’t have to mean higher rates.


  20. - Sue - Monday, Dec 4, 17 @ 11:30 am:

    The states which have attempted to impose the higher taxes on the upper incomes have all discovered the mobility of the rich. They reach a point where they leave in terms of legal residence. The politicians are always late to learn that the wealthy have options Just ask the governor of CN.


  21. - PJ - Monday, Dec 4, 17 @ 11:34 am:

    ===The states which have attempted to impose the higher taxes on the upper incomes have all discovered the mobility of the rich===

    Link? Interesting to hear that the millionaires have all left the 30 states with graduated income taxes for the other 20.

    Must be some sweet country clubs in South Dakota.


  22. - Sue - Monday, Dec 4, 17 @ 11:40 am:

    PJ- facts are stubborn things. GE left CN as did a single hedge fund individual responsible for over one percent of CN’s tax revenue. Lots of folks can live in Florida even if their business is in Illinois. A 5 percent flat tax is tolerable. Above 5? And particularly Madigan’s millionaire tax will result in those of us who can leave the state as far as legal residence to do so. Spend time in Florida and you meet lots of people who are there for 6 plus months and return somewhere else for the summer


  23. - Arsenal - Monday, Dec 4, 17 @ 11:42 am:

    ==Just ask the governor of CN.==

    Ah, yes, the 57th state of the United Protectorate of Columbia.


  24. - Anonymous - Monday, Dec 4, 17 @ 11:43 am:

    Unless the constituency is willing to open up the Illinois constitution, then all of this talk of going to a progressive tax is just talk. Open up the constitution and there are a lot of things which would be open for discussion. A flat tax works when everyone pays their portion. A flat tax isn’t designed to allow individual tax breaks. The government should not be picking winners and losers and everyone needs skin in the game.


  25. - Ron - Monday, Dec 4, 17 @ 11:43 am:

    I’m all for a graduated personal income tax, but we should get rid of the state corporate tax and pension protection while we’re amending the state constitution.


  26. - NobodysAccountable - Monday, Dec 4, 17 @ 11:44 am:

    Anonymous 11:43 was me. I apologize


  27. - Honeybear - Monday, Dec 4, 17 @ 11:49 am:

    Ron, it’s not a constitutional convention bud. The GA has to put the pass the referendum for Nov. ballot by May 10.2018 with a 3/5th majority.
    Then the people decide the question.
    Rauner doesn’t get a say besides his single vote.
    But anyway, the referendum doesn’t let other issues be addressed.


  28. - Smitty Irving - Monday, Dec 4, 17 @ 11:51 am:

    City Zen -
    Colorado has 3 things Illinois does not. 1, substantial military economic presence. 2, year round tourism (cold weather without Rocky Mountain skiing makes it seasonal in Illinois). 3, a steady influx of “Valley Forge deserters” (i. e., Chicago cold weather wimps).


  29. - Ron - Monday, Dec 4, 17 @ 11:51 am:

    Honeybear, a progressive income tax is against the constitution.


  30. - Ron - Monday, Dec 4, 17 @ 11:52 am:

    Smitty, don’t forget legalized pot.


  31. - Montrose - Monday, Dec 4, 17 @ 11:53 am:

    “Unless the constituency is willing to open up the Illinois constitution, then all of this talk of going to a progressive tax is just talk.”

    You do not have to open up the whole constitution. You need to get the specific amendment on the ballot. That is hard to do, but we don’t need a constitutional convention.

    A graduated income tax on the ballot that helps most taxpayers and hurts the highest income folks is a nightmare for Rauner. Progressive income tax polls well and would drive anti-Rauner voters to the polls. Of course he is going to mischaracterize it and do whatever he can to keep it off the ballot.


  32. - Ron - Monday, Dec 4, 17 @ 11:54 am:

    The Illinois Constitution should be scrapped and re written it’s an abomination against justice and fairness.


  33. - Demoralized - Monday, Dec 4, 17 @ 12:01 pm:

    ==it’s an abomination==

    I lol every time you write this. You aren’t just whining about pensions anymore. You apparently aren’t really a constitution lover in general. Sheesh.


  34. - RNUG - Monday, Dec 4, 17 @ 12:02 pm:

    == a progressive income tax is against the constitution ==

    Currently.

    Which is why an honest proposal, with specific brackets and rates,needs to be part of the discussion of tax reform for this state.

    The discussion should also include expanding the revenue base. That expansion could be taxing additional services, including retirement income or a portion, legalizing and taxing marijuana, eliminating assorted corporate credits, and even eliminating individual deductions / credits. Take a look at everything.


  35. - Demoralized - Monday, Dec 4, 17 @ 12:02 pm:

    ==They can’t balance their budgets==

    The Governor wants to cut our rate back to 3%. I’d love to see how he balances the budget with that. Kansas and Oklahoma tried that out and ended up in budgetary disasters.


  36. - Ron - Monday, Dec 4, 17 @ 12:26 pm:

    legalizing and taxing marijuana

    This should have been done last year. The state would have $500,000,000 more for pension payments.


  37. - Ron - Monday, Dec 4, 17 @ 12:26 pm:

    “You apparently aren’t really a constitution lover in general”

    The IL Constitution is a horrible joke. It needs to be scrapped.


  38. - NorthsideNoMore - Monday, Dec 4, 17 @ 12:27 pm:

    If the once and former great state goes to a progressive tax there will be more flight and job loss. A service tax with a cap is the way to go, it has been discussed behind closed doors mostly for some years now. What’s at issue is what transactions get dinged.


  39. - Blue dog dem - Monday, Dec 4, 17 @ 12:31 pm:

    I think we should tax maryjeewanna, raise the motor fuel tax, start collecting sales tax on new services, raise the state income tax. Did I miss anything?


  40. - City Zen - Monday, Dec 4, 17 @ 12:33 pm:

    ==The Governor wants to cut our rate back to 3%. I’d love to see how he balances the budget with that. Kansas and Oklahoma tried that out and ended up in budgetary disasters.==

    In 2010, Ohio’s tax rates for their 2 highest brackets were 5.4% and 5.9%. In 2017, those same two brackets are taxed at 4.6% and 5.0%. So some states have been able to make cuts and avert disaster. (not suggesting we follow Bruce’s advice)


  41. - Ron - Monday, Dec 4, 17 @ 1:20 pm:

    Illinois has one of the highest state and local tax burdens in the entire nation. And we still can’t balance the books.


  42. - Demoralized - Monday, Dec 4, 17 @ 1:24 pm:

    ==The IL Constitution is a horrible joke. It needs to be scrapped.==

    Really? The entire thing. lol. And what exactly would you change Mr. Wizard beyond the pension clause?


  43. - Demoralized - Monday, Dec 4, 17 @ 1:26 pm:

    ==So some states have been able to make cuts and avert disaster.==

    Did those “some states” get to $16B in unpaid bills? I don’t care what anyone thinks or says, Illinois couldn’t cut it’s way out of this.


  44. - Ron - Monday, Dec 4, 17 @ 1:28 pm:

    I don’t care what anyone thinks or says, Illinois couldn’t cut it’s way out of this.”

    Thanks to decades of corrupt, inept management by Madigan, Edgar, public employee unions etc..


  45. - Ron - Monday, Dec 4, 17 @ 1:28 pm:

    “The entire thing”

    Yes, start from scratch.


  46. - Blue dog dem - Monday, Dec 4, 17 @ 1:29 pm:

    Dem. Are you proposing we tax our way out of this?


  47. - Demoralized - Monday, Dec 4, 17 @ 1:31 pm:

    ==Are you proposing we tax our way out of this==

    Nope. Just pointing out you can’t cut alone.


  48. - Demoralized - Monday, Dec 4, 17 @ 1:33 pm:

    ==Yes, start from scratch.==

    You even read the Constitution? That pesky Bill of Rights? Scrap it. It’s an abomination. Let’s start over. I’m not going to go through the entire thing but I could to show you how ridiculous you sound.


  49. - Ron - Monday, Dec 4, 17 @ 1:37 pm:

    Did I say get rid of the Bill Rights?

    Reading comprehension?


  50. - Demoralized - Monday, Dec 4, 17 @ 1:55 pm:

    ==Yes, start from scratch.==

    You’re welcome. You said it, not me.

    If you don’t want to do that then you don’t need to scrap the whole thing. Words have meaning.


  51. - Ron - Monday, Dec 4, 17 @ 2:03 pm:

    Yep, start over. Fresh slate. Doesn’t mean that there aren’t good things in there.


  52. - Smitty Irving - Monday, Dec 4, 17 @ 2:06 pm:

    Ron -

    Home Rule?


  53. - Ron - Monday, Dec 4, 17 @ 2:13 pm:

    Public employee benefit protection must be eliminated for future generations.


  54. - Ron - Monday, Dec 4, 17 @ 2:14 pm:

    Elminiate corporate income tax.


  55. - Ron - Monday, Dec 4, 17 @ 2:15 pm:

    State not responsible for pensions created by municipal government teachers.


  56. - RNUG - Monday, Dec 4, 17 @ 2:17 pm:

    Ron, I assume you weren’t around in 1968 - 1970 as a delegate to the Con-Con? What we have is what the voters wanted.


  57. - Ron - Monday, Dec 4, 17 @ 2:20 pm:

    No, I wasn’t able to vote then. It’s an atrocity that we are stuck with this poorly thoughtout document.


  58. - RNUG - Monday, Dec 4, 17 @ 2:27 pm:

    == Public employee benefit protection must be eliminated for future generations. ==

    If you can get a bill passed and signed, you can do that today for new hires.

    == Elminiate corporate income tax. ==

    Ditto. Constitution gives a maximum rate, just set the rate to zero.

    == State not responsible for pensions created by municipal government teachers. ==

    Ditto. But you will have to raise state level school support or allow local school districts to explicitly tax for pensions.

    ..

    All any of those take is 60 and 30. When Rauner can count to those numbers, it will happen.


  59. - RNUG - Monday, Dec 4, 17 @ 2:30 pm:

    == No, I wasn’t able to vote then. It’s an atrocity that we are stuck with this poorly thoughtout document. ==

    If you bother to go read the Con-Con debates (they are online), there was a lot of thought put into the rewrite. If I remember properly, the 1970 Constitution was heralded as one of, if not the, most modern and progressive one in the nation.


  60. - Ron - Monday, Dec 4, 17 @ 2:52 pm:

    employee benefits should not be part of any constitution, SSI is not part of the US constitution thank goodness


  61. - Anyone Remember - Monday, Dec 4, 17 @ 3:02 pm:

    Ron -
    Pensions are in the Illinois Constitution of 1970 to protect them from abolishment via Home Rule (particularly for firefighters who do not have Social Security). It has been discussed here before.


  62. - wordslinger - Monday, Dec 4, 17 @ 3:03 pm:

    –The states which have attempted to impose the higher taxes on the upper incomes have all discovered the mobility of the rich.–

    Yeah, Beverly Hills, Marin County, Manhattan, they’re ghost towns. No rich people in London, Tokyo, Singapore, Hong Kong…..

    Strangely enough, Sue, people who don’t watch TV all day looked into the question and reached a shocking conclusion: rich people live where they want to, because they can afford to.

    https://www.theguardian.com/inequality/2017/nov/20/if-you-tax-the-rich-they-wont-leave-us-data-contradicts-millionaires-threats


  63. - Sue - Monday, Dec 4, 17 @ 3:33 pm:

    The bigger travesty was in 1990 when the 3 percent COLA was added as Thompson was on the way out


  64. - Demoralized - Monday, Dec 4, 17 @ 3:40 pm:

    ==Illinois doesn’t tax retirement income.==

    No, the biggest travesty was the state not paying what was owed each year.


  65. - RNUG - Monday, Dec 4, 17 @ 3:50 pm:

    == the state not paying what was owed each year. ==

    Which went on for many,many decades … off and on almost a century. Nobody trusted the State to live up to its’ pension obligations. That is the why / how that the Pension Protection Clause ended up in the 1970 Constitution. And if you read the actual Con-Con debates, the authors of the Pension Clause thought it would force the Legislature to live up to proper funding … and it didn’t work, thanks to the 1975 IFT decision.


  66. - City Zen - Monday, Dec 4, 17 @ 3:58 pm:

    ==No, the biggest travesty was the state not paying what was owed each year.==

    They did, but it was paid out in salary raises, excellent health benefits, new job openings, etc. How about the state makes a full pension payment first then doles out compensation enhancements with whatever is left? Deal?

    BTW - Take the amount of tax revenue lost each year over the decades by not taxing retirement income and put that money into pensions. What would our pension liability be?


  67. - Demoralized - Monday, Dec 4, 17 @ 4:18 pm:

    ==They did==

    No, they didn’t. You can play games if you want, though.


  68. - Ron - Monday, Dec 4, 17 @ 4:27 pm:

    City Zen, which is precisely why public employee unions should be abolished.


  69. - Ron - Monday, Dec 4, 17 @ 4:28 pm:

    Where does Janus stand?


  70. - wordslinger - Monday, Dec 4, 17 @ 5:30 pm:

    –City Zen, which is precisely why public employee unions should be abolished.–

    That’s what those nice men in 1930s Berlin and Moscow did. Fan of theirs?


  71. - Honeybear - Monday, Dec 4, 17 @ 7:16 pm:

    Frankly, I’m for not feeding Ron anymore.
    He’s just hateful in my opinion.


Sorry, comments for this post are now closed.


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