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*** UPDATED x1 *** Rauner’s argument actually makes the case for a graduated income tax

Monday, May 7, 2018

* WGIL

Republican Governor Bruce Rauner tells WGIL that a progressive tax plan is a job killer, and would do more harm to the state than good.

“Every state that has gone to a graduated income tax – or what they call a progressive income tax… I call it a destructive income tax – every state that’s done it, the middle class families that make $40,000, $45,000 $50,000 have seen their taxes raised.” Rauner said. “Nobody is getting rich on that. That’s a middle class family income they end up paying a lot higher income taxes too.” […]

Rauner says that Illinois should follow Iowa and Wisconsin’s example and cut their income taxes. […]

Rauner says that in Minnesota, which has a progressive tax plan, a single taxpayer making around $25,000 pays 7% income tax. He called that tax rate “outrageous”.

Yes, that’s the published tax rate (the tax rate actually applies to income above $25,891, but it’s kinda close enough, although the important thing to remember is that only income earned above that rate is taxed at a higher rate, which the governor really messes up here).

But if you use a tax payment calculator, you’ll see that a single Minnesotan making $25,000 a year will owe just $797.15 in state income taxes. That’s an effective tax rate of 3.2 percent. (At 26,000, the effective rate is 3.27 percent.)

By the way, a single Wisconsin resident making $50,000 a year would pay a 3.2 percent effective income tax rate. In Iowa, that same person would pay a 4.7 percent effective income tax rate (before its proposed tax cut).

How can they afford to do that? By making higher income earners pay more.

The CTBA should send the governor a dozen roses.

*** UPDATE *** Let’s go back to the governor’s interview with WGIL

“Kentucky, which has been stealing jobs from Southern Illinois for a while now, they just got rid of their graduated income tax and went to a flat tax at a lower rate. So they can grow more jobs, higher family income.”

He didn’t mention an important point…



Oops.

- Posted by Rich Miller        

58 Comments
  1. - Henry Francis - Monday, May 7, 18 @ 12:15 pm:

    From the guy who wailed about a “67%” tax increase in Illinois. A “permanent” one at that.


  2. - wordslinger - Monday, May 7, 18 @ 12:21 pm:

    –Rauner says that Illinois should follow Iowa and Wisconsin’s example and cut their income taxes.–

    Does he really not know that those states have graduated income taxes?

    As to his “middle class” concerns:

    In Wisconsin, the rate for joint filers making over $29,960 is 6.27%. In Iowa, the rate for joint filers making over $31,460 is 6.8%.

    Does the governor not understand that those rates are significantly higher than Illinois’?


  3. - Fixer - Monday, May 7, 18 @ 12:22 pm:

    But those are details. Bruce is about as big on details as he is on proper pronunciation.


  4. - Annonin' - Monday, May 7, 18 @ 12:24 pm:

    “Thanks GovJunk” tee hee
    Now ask what an 1115 waiver is?


  5. - Anonymous - Monday, May 7, 18 @ 12:24 pm:

    Since folks are so horrified about low and middle income earners paying any more tax, who should then pick up the slack? As the bank robber said……..


  6. - City Zen - Monday, May 7, 18 @ 12:26 pm:

    ==Rauner says that in Minnesota…a single taxpayer making around $25,000 pays 7% income tax.==

    Bruce - Minnesota’s first tax bracket is 5.35% up to $25,000.


  7. - Texas Red - Monday, May 7, 18 @ 12:26 pm:

    Rauner should watch what he says - taxes are tricky - the tax tables versus the effective rate must be understood. Instead he should have the chutzpah to say that the last thing we should be doing in this sate is raising taxes on high earners; they are the folks that are the small business owners and thus job creators.


  8. - Harvest76 - Monday, May 7, 18 @ 12:30 pm:

    I have a hard time believing that the governor, who is also a very wealthy and successful businessman, doesn’t know the difference between the published tax rate and the effective tax rate. His statement is disingenuous, at best.


  9. - Anonymous - Monday, May 7, 18 @ 12:30 pm:

    In both Iowa and Wisconsin if you make the median wage you are taxed in the next to highest tax bracket.


  10. - illini - Monday, May 7, 18 @ 12:31 pm:

    Let’s all be honest and acknowledge that Rauner has never let the facts get in the way of what he perceives as being a winning, and politically effective, statement.

    Our Comptroller is doing an excellent of continually pointing out the fallacies of his many assertions.

    Maybe he really needs a better BTIA(tm) or just be quiet.


  11. - Oswego Willy - Monday, May 7, 18 @ 12:31 pm:

    Bruce Rauner… great on sound bites, awful on nuance.

    Rauner has no clue on the nuance, and is hoping no one else keen on nuance too.

    Rauner has no desire to govern. It’s waiting out leverages to hurt labor or get Dems to capitulate. Governing isn’t a feature it’s a bug in an actual leverage


  12. - Rich Miller - Monday, May 7, 18 @ 12:35 pm:

    ===Bruce - Minnesota’s first tax bracket is 5.35%===

    But you’re making the same mistake he did. The number to look at is the effective rate because that’s what people actually pay.


  13. - Grandson of Man - Monday, May 7, 18 @ 12:36 pm:

    “Bruce Rauner tells WGIL that a progressive tax plan is a job killer”

    Tell that to California, who just surpassed the UK and now has the fifth largest economy in the world.

    https://amp.usatoday.com/amp/583508002


  14. - Norseman - Monday, May 7, 18 @ 12:48 pm:

    Accuracy and honesty are traits Rauner doesn’t possess. We’ll hear falsehoods about progressive tax from Rauner until November. Then the falsehoods will be carried forward by the orphaned Raunerites.


  15. - RNUG - Monday, May 7, 18 @ 12:49 pm:

    Interesting how the discussion on a progressive income tax has pushed out the idea of expanding the sales tax to most services.


  16. - Jocko - Monday, May 7, 18 @ 12:51 pm:

    ==I call it a destructive income tax==

    At least Bruce isn’t pulling the “little old lady” or “democrat afraid of Madigan” when creating these whoppers. I’ve never seen a former CEO so bereft of ideas.


  17. - supplied_demand - Monday, May 7, 18 @ 1:06 pm:

    ==In both Iowa and Wisconsin if you make the median wage you are taxed in the next to highest tax bracket. ==

    This is not true. Those states have progressive tax rates, so only a portion of your income falls into any one category.

    The median wage in Iowa is $56,250. That individual would pay the second highest rate (7.92%) only on their income above $45,450 ($10,800 of income at 7.92% = $855.36).


  18. - BlueDogDem - Monday, May 7, 18 @ 1:10 pm:

    Look for Bruce to be wearing a bowling outfit in the near future.


  19. - Dublin - Monday, May 7, 18 @ 1:13 pm:

    IPI constantly does the same thing. They claim we should do X like this state or Y because of what that state does. Always ignoring the whole picture of taxes - graduated income taxes, taxing retirement, local taxes, service taxes. Disingenuous, to say the least.


  20. - 47th Ward - Monday, May 7, 18 @ 1:13 pm:

    ===Is Rauner suggesting Illinois should tax bowling?===

    This aggression will not stand, man.


  21. - Henry Francis - Monday, May 7, 18 @ 1:14 pm:

    I think the Guv has been watching too much Guliani on the tv.

    But give him a break, he’s new to the job too. He’ll eventually get his facts straight.


  22. - Oswego Willy - Monday, May 7, 18 @ 1:16 pm:

    ===This aggression will not stand, man.===

    - 47th Ward -

    “Yeah, well, you know, that’s just like, uh, your opinion, man.”


  23. - Pieroge tirebiter - Monday, May 7, 18 @ 1:19 pm:

    Tax bowling???


  24. - Pieroge tirebiter - Monday, May 7, 18 @ 1:20 pm:

    Tax bowling???
    The dude will most certainly not abide.


  25. - JS Mill - Monday, May 7, 18 @ 1:20 pm:

    =they are the folks that are the small business owners and thus job creators.=

    The job creators are the customers.

    =Tell that to California, who just surpassed the UK and now has the fifth largest economy in the world.=

    Gasp. (clutching pearls as I speak) That cannot be so, they just had a job killing tax increase.

    The fact is that there is no correlation between taxes and jobs. Taxes also do not decrease GDP, if that were true Illinois would not have the 5th largest economy (still) in the country and (last I checked) 16th largest in the world.

    Can we put that lame, false discussion to rest and focus on paying our bills and demanding good governance and quality services for our tax dollars?


  26. - Lester Holt’s Mustache - Monday, May 7, 18 @ 1:22 pm:

    ==At least Bruce isn’t pulling the “little old lady” or “democrat afraid of Madigan” when creating these whoppers.==

    Eh, he just ran out of time - give him a couple days. “(Nervous chuckle) hehehe, well I’ll tell ya, I got packs of Democrats, whole crowds of ‘em that come up to me all the time and they say ‘Governor, please don’t let that evil Madigan raise taxes on those poor businessmen. They’ve got enough problems already what with payin’ this crazy high rate and fillin’ out all that tax paperwork. Matter of fact just today 17 little old ladies, they all had white hair, they stopped me on the street and all of ‘em said to me ‘Governor we’d sure like to speak out about how much we hate a progressive tax structure, but all of us are just too danged afraid of payback from Madigan’. That really happened, just this mornin’. So that’s why, um, I’m keepin’ up the fight against the corrupt political insiders, pushin’ for common sense reforms, and uh, um, fightin’.”


  27. - City Zen - Monday, May 7, 18 @ 1:23 pm:

    Kentucky already has one of those pseudo-graduated tax structures where pretty much everyone pays the same flat rate. Someone making $500K in KY has an effective tax rate less than one-half percentage point higher than someone making $50K.


  28. - wordslinger - Monday, May 7, 18 @ 1:30 pm:

    –Tell that to California, who just surpassed the UK and now has the fifth largest economy in the world.

    https://amp.usatoday.com/amp/583508002–

    And added 2.34 million jobs since the depths of the Great Recession.


  29. - Anonymous - Monday, May 7, 18 @ 1:33 pm:

    Some confusing things…….if a progressive income tax is a job killer, then most states should be in trouble—-but not ours—because most states have progressive tax structure.

    Secondly, if taxing high income individuals more than low income individuals is a bad thing, then why not just eliminate all state taxation for anyone over 100k (because it seems that’s what so many think of as rich) and up the taxes on others.

    How much would that generate to address our debts? How fair is that? It sounds so crazy, but sometimes when I read these comments, it seems exactly what some would like to see happen.


  30. - A guy - Monday, May 7, 18 @ 1:36 pm:

    Go ahead and tax Bowling. The noise is “sustainable” in those places.


  31. - Skeptic - Monday, May 7, 18 @ 1:41 pm:

    Wouldn’t it make more sense to tax golf than bowling?


  32. - SAP - Monday, May 7, 18 @ 1:42 pm:

    First they came for our bowling balls, and I said nothing…


  33. - Rabid - Monday, May 7, 18 @ 1:43 pm:

    Never fear robin hood will soon be here


  34. - @misterjayem - Monday, May 7, 18 @ 1:52 pm:

    “Is Rauner suggesting Illinois should tax bowling?”

    Mr. Burns: “Stop everything! I don’t remember writing a check for bowling.”
    Smithers: “Uh, sir, that’s a check for your boweling.”
    Mr. Burns: “Oh, yes - that’s very important.”
    Smithers: “Yes, sir. Remember that month you didn’t do it?”
    Mr. Burns: “Yes, that was unpleasant for all concerned.”

    – MrJM


  35. - Thomas Paine - Monday, May 7, 18 @ 1:55 pm:

    Its partly the bowling tax, Rich.

    But it’s also worth noting that Health care, Humans services, and the government sectors are expected to account for HALF of all new jobs created in Kentucky this decade.

    The economy is like a four-legged stool, and Bruce Rauner has sawed off a couple of the legs.


  36. - Been There - Monday, May 7, 18 @ 2:42 pm:

    I am now totally convinced that anyone who thinks Illinois is taxing everyone too much because of Madigan is actually just buying into Rauners ads and really has no idea what they are getting into when they pull up stakes and move. Especially when they go to Indiana and don’t realize most counties and many towns have an incime tax on top of the state tax.


  37. - Grandson of Man - Monday, May 7, 18 @ 2:44 pm:

    “First they came for our bowling balls”

    First the Bowling Green massacre and now a bowling tax. Poor Kentucky.


  38. - Skeptic - Monday, May 7, 18 @ 2:56 pm:

    “First the Bowling Green massacre and now a bowling tax. Poor Kentucky.” Ohio is known for both as well.


  39. - City Zen - Monday, May 7, 18 @ 3:29 pm:

    ==Especially when they go to Indiana and don’t realize most counties and many towns have an income tax on top of the state tax.==

    Those Indiana counties and towns are not allowed to charge sales tax on top of the state sales tax rate. Not to mention their property taxes are a third of what we pay.


  40. - wordslinger - Monday, May 7, 18 @ 3:46 pm:

    –Not to mention their property taxes are a third of what we pay.–

    You make it sound like there’s some standard, consistent tax rate on property across the state. I’m quite certain that’s not the case.

    Some pay a boatload in property taxes, some not nearly as much.


  41. - Skeptic - Monday, May 7, 18 @ 4:10 pm:

    “Some pay a boatload in property taxes, some not nearly as much.” And some people have access to things like parks, and swimming pools and golf courses and libraries and continuing education classes and fire protection and police protection and garbage collection and clean water and sewers, some not nearly as much.


  42. - Grandson of Man - Monday, May 7, 18 @ 4:14 pm:

    “Indiana”

    If Indiana was so great the people pushin’ the pro-Indiana narrative would be living and working there. That they don’t live and work there says a lot. Illinois is in the top 20 of all states, income-wise. Indiana is in the bottom 15 of median/per capita income.


  43. - JS Mill - Monday, May 7, 18 @ 4:18 pm:

    =“Indiana”

    If Indiana was so great the people pushin’ the pro-Indiana narrative would be living and working there. That they don’t live and work there says a lot. Illinois is in the top 20 of all states, income-wise. Indiana is in the bottom 15 of median/per capita income.=

    mic drop


  44. - Anonymous - Monday, May 7, 18 @ 4:40 pm:

    Does not bowling also fall under Minnesota’s general use tax


  45. - supplied_demand - Monday, May 7, 18 @ 4:51 pm:

    ==Those Indiana counties and towns are not allowed to charge sales tax on top of the state sales tax rate.==

    Most people make more income than they spend on taxable purchases, so I’ll take this trade-off.


  46. - City Zen - Monday, May 7, 18 @ 4:51 pm:

    ==If Indiana was so great the people pushin’ the pro-Indiana narrative would be living and working there.==

    Same can be said for Minnesota.

    ==You make it sound like there’s some standard, consistent tax rate on property across the state.==

    Space and time restrictions prevented me from providing a block-by-block breakdown of property taxes between the states.


  47. - wordslinger - Monday, May 7, 18 @ 4:55 pm:

    –Space and time restrictions prevented me from providing a block-by-block breakdown of property taxes between the states.–

    But you certainly were quick to miss my point, which I thought was pretty obvious.

    What “we” in Illinois pay in property taxes ranges quite a bit.


  48. - My thoughts - Monday, May 7, 18 @ 4:56 pm:

    How many years straight has Illinois population declined?


  49. - wordslinger - Monday, May 7, 18 @ 4:58 pm:

    –How many years straight has Illinois population declined?–

    Apparently, the population that believes it is entitled to have others do their simple research for them is still well-represented.


  50. - My thoughts - Monday, May 7, 18 @ 5:07 pm:

    Apparently those that Illinois is such a great place to live have forgot that Illinois population has been decreasing since Quinn was the Governor.


  51. - Anonymous - Monday, May 7, 18 @ 5:10 pm:

    Apparently those that think Illinois is such a great place to live have forgotten that Illinois population growth has decreased every year during Quinn’s term and then went negative in his final years.


  52. - supplied_demand - Monday, May 7, 18 @ 5:19 pm:

    ==Apparently those that Illinois is such a great place to live have forgot that Illinois population has been decreasing since Quinn was the Governor. ==

    Quinn took over in 2009 Illinois had 12.80 million population. In 2015 when he left office, the population was 12.86 million. Today,the population is estimated at 12.77 million.

    Maybe having a Governor who consistently talks about how horrible his state is, isn’t a great thing for population increases.


  53. - wordslinger - Monday, May 7, 18 @ 5:33 pm:

    –Apparently those that think Illinois is such a great place to live have forgotten that Illinois population growth has decreased every year during Quinn’s term and then went negative in his final years.–

    Every state’s “growth rate” peaked many decades ago and have been in overall decline for a very long time.

    If you’re talking about overall population growth, I doubt that Texas grew from 9.6M in 1960 to 30M today because folks were all ga-ga over who the governors were.

    I’m thinking demographics might be a little more complicated then that.

    Look them up yourself.

    http://worldpopulationreview.com/


  54. - Anonymous - Monday, May 7, 18 @ 5:43 pm:

    Illinois population leveled out in 2013 then started declining in 2014.


  55. - JackD - Monday, May 7, 18 @ 7:15 pm:

    Minnesota’s success, given its tax rate is outrageous?


  56. - City Zen - Monday, May 7, 18 @ 8:08 pm:

    ==Minnesota’s success, given its tax rate is outrageous?==

    They tax retirement income.


  57. - JackD - Monday, May 7, 18 @ 8:19 pm:

    “They tax retirement income.” Yes, and they don’t seem to lose people possibly because they get something worthwhile for their money.


  58. - Da Big Bad Wolf - Tuesday, May 8, 18 @ 11:08 am:

    Kentucky’s debt to GDP is worse then Illinois’, so it was foolish for Kentucky to do that. I sure hope a lot of people take up bowling. https://www.usgovernmentdebt.us/state_debt_rank


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