Please define “vast majority”
Monday, Oct 1, 2018 - Posted by Rich Miller
* Crain’s…
Presenting himself as a champion of working families and their needs, Democratic gubernatorial hopeful J.B. Pritzker [Friday] ripped GOP Gov. Bruce Rauner as a failed leader and defended his own plan to impose a graduated income tax as necessary to stabilize state finances and fund priorities from property-tax relief to education.
But with an apparent eye on the upcoming election, Pritzker rejected all attempts to detail how much the tax reform would raise or who would pay more, saying only that “the vast majority” of Illinoisans actually will end up paying less than they do now under his plan. […]
Schools need a steady stream of money, and local property-tax payers need the relief that will come if the state begins to pay its proper, larger share of total costs, he said. That means, “The wealthy should pay more.”
2017 Illinois median household income was $64,609. In order to cut taxes for the “vast majority” of taxpayers who would get a tax cut, you’d have to bump that target level up to… what? And then after cutting those peoples’ taxes he’d fund all those new programs of his and cut property taxes by focusing all the income tax increases on maybe the top 20-30 percent of taxpayers?
- Just Me - Monday, Oct 1, 18 @ 10:18 am:
Furthermore, how do you pay for all those new programs in the meantime when it takes 2-3 years to pass the joint resolution, get it on the ballot, pass it, implement the new rates, and then wait another year for the money to roll in?
- Not Rich - Monday, Oct 1, 18 @ 10:24 am:
Rich: take a break..go walk Oscar.. I have bad news for you.. JB will NEVER detail any of his stuff.. not necessary, up double digits, the incumbent at 29% .. Edgar told him to be generic not specific..
- Lester Holt’s Mustache - Monday, Oct 1, 18 @ 10:26 am:
==how do you pay for all those new programs in the meantime==
Probably won’t, but will be the foundation of his re-elect messaging. “Hey look at all these programs we started to help you out, and look at all the work we’ve put in to get this graduated tax in place. Need another 4 years to finish please.”
- Whatever - Monday, Oct 1, 18 @ 10:32 am:
==JB will NEVER detail any of his stuff.==
And Rauner will never answer tough questions, either. Journalists still have to ask, or try to find the answers some other way (such as figuring what tax rates might be needed for the to 20% to fund everything).
- Wylie Coyote - Monday, Oct 1, 18 @ 10:33 am:
We’re off to see the wizard…….
- Rich Miller - Monday, Oct 1, 18 @ 10:42 am:
===I have bad news for you===
Oh, please. Do you think I don’t know this? Just because he won’t answer a question doesn’t mean I will stop asking or stop whacking him for his silence.
- El Conquistador - Monday, Oct 1, 18 @ 10:42 am:
Look revenues are insufficient. They’ve been insufficient for a long time which is why they used employer contribution dollars to to fund state operations instead of meeting their fiduciary responsibility among other poor misleading financial shenanigans.
If they’re finally serious about righting the state’s finances, the GA will have to work out revenues in concert with the Gov. no one entity will be able to layout or dictate terms. Witness Rauner’s bizarre and pathetic attempt at a banana republic dictatorship for the last 4 years.
- Matts - Monday, Oct 1, 18 @ 10:43 am:
Barry Goldwater was very specific about what he intended to do if elected President in 1964. Lost in a landslide.
- Oswego Willy - Monday, Oct 1, 18 @ 10:48 am:
===…doesn’t mean I will stop asking or stop whacking him for his silence.===
That’s the whole point of the press holding accountable those running for office and others holding office.
There’s no magic number, like “ask 750 times, then you can’t ask again”. No. That’s not it.
While it runs counter to the politics or even the things I say line Edgar has… don’t be specific… the real issue isn’t looking at things solely thru the political… governing will need to occur. Policy will need to be, not only defined, but exacting to numbers and budgets.
We need to embrace that being coy or less than forthcoming is both an important campaign tactic AND also something no candidate should think is going to be tolerated or dismissed by the press..
- Not Rich - Monday, Oct 1, 18 @ 10:49 am:
Rich: I KNOW you will continue to press.. very few of your colleagues know how to do that. I just don’t want you to get over stressed, your heart can’t take it..
- Sue - Monday, Oct 1, 18 @ 10:52 am:
Predictions- one year from now Illinois will have a FLAT TAX of 6 percent with slightly higher personal exemptions and that will be the sum and substance of the JB Fair Tax
- Steve - Monday, Oct 1, 18 @ 10:58 am:
The voting public is entitled to know exactly what the marginal tax rates will be on what amount of income. I don’t expect JB to answer but all reporters who ask the question are doing their job.
- Original Rambler - Monday, Oct 1, 18 @ 11:03 am:
Maybe the 6% flat tax is coming, but I’m OK with that if it rights our finances. I’m certainly not OK with the bogus claims of the incumbent that he will be slashing our tax rate and at the same time getting us financially stable. I’d like to see BVR pressed as much on this as JB gets questioned about tax rates.
- Publius - Monday, Oct 1, 18 @ 11:05 am:
He would be foolish to give percentages and figures that will only change once he is in office. Until he is behind the desk he will have no idea what bills Rauner has hidden. Sure he ha around a loophole around Mendoza’s law
- Rich Miller - Monday, Oct 1, 18 @ 11:12 am:
===your heart can’t take it===
My heart is fine, thanks.
- Lucky Pierre - Monday, Oct 1, 18 @ 11:13 am:
JB is promising Peter a tax cut and all kinds of new programs funded by Paul.
No wonder Peter is supporting JB.
A lot of Peters are in for a rude awakening when they realize JB thinks they are actually Paul.
Even though they have nowhere near as much money as Governor Rauner and JB
- Rod - Monday, Oct 1, 18 @ 11:20 am:
I believe honestly JB does not have a firm grasp on what the graduated income tax rates would need to be for various income levels in order for a consistent paydown of back debt for pensions, infrastructure development, and funding the evidence based education model would be. Ralph Martire has thrown out various numbers over the years based on optimistic employment assumptions, there has never been an analysis that assumes an economic recession lasting several years.
Martin Feldstein in the Wall Street Journal last week predicted based on history a significant recession for the USA within the next few years. He also does not see the Federal Reserve being able to do much the limit its impact. So a realistic answer to the question by JB would be a very complex one, not made for sound bites. Governor Rauner would simply face a new recession will his simple solution, cut the budget to match revenue no matter how dramatic. I prefer JB’s non-answer to the Governor’s slash and burn approach.
- City Zen - Monday, Oct 1, 18 @ 11:24 am:
” focusing all the income tax increases on maybe the top 20-30 percent of taxpayers?”
The threshold for the top 30% of tax filers starts at $75,000. The top 20% starts at $100,000.
Vast majority implies a percentage greater than both.
- Sue - Monday, Oct 1, 18 @ 11:30 am:
Rambler- going to 6 won’t pay for JB’s new programs- it will just be status quo as pension costs ratchet up. To fix the State in terms of what JB would like to see you probably need a flat tax of 8
- Not a Billionaire - Monday, Oct 1, 18 @ 11:31 am:
60 % of AGI goes to those over 100000
Source IRS. So a lot more money will come in under a graduated income tax.
- OneMan - Monday, Oct 1, 18 @ 11:32 am:
But we can…
If you look at the 2016 tax return information on income distribution put out by the department of revenue for 2017 20% of in-state tax returns reported an income of $100,000 or more. I am going to ignore out of state/bad zip code returns since I don’t have income breakdowns on those.
So people reporting income of 100,000 or more in 2017 paid $8,514,937,115 in state income taxes. Let us use Rich’s 10.7 Billion of additional revenue we need to get out of these folks.
These folks had a net income of $227,109,380,955
So we would need to get $18,714,937,115 out of these folks (the 8.5 billion we collected and 10.2 additional in revenue)
So $18,714,937,115 / $227,109,380,955 gives you .128 or 12.8%, but that would be on dollar one of earnings, not a graduated rate. This is just a shade under the 13.3% California charges 1.5% of Californians, those with a single income filing of at least $263,000, or joint income of $526,000.
Data, for the most part, is here.
http://www.revenue.state.il.us/AboutIdor/TaxStats/2016/2016_Preliminary_IIT_IL_1040_Return.pdf (PDF)
or http://www.revenue.state.il.us/AboutIdor/TaxStats/2016/index.htm (download the spreadsheet and play along at home)
- SSL - Monday, Oct 1, 18 @ 11:35 am:
Eventually JB will have to provide details, because he’ll be in charge. Then we’ll see how truthful he was about the vast majority paying lower taxes.
If JB changes his position it means he either wasn’t truthful or he didn’t understand the scope of the problems the state faces. I hope we don’t end up calling him a liar or stupid.
The more that the press asks him to provide details, the better. JB might as well learn now, he will be held accountable.
- Steve - Monday, Oct 1, 18 @ 11:38 am:
Other states do have progressive income taxes but, what if Illinois becomes something like New Jersey? It could happen in a short period of time.
http://fortune.com/2016/04/12/david-tepper-taxes/
personal income tax comprises roughly 40% of New Jersey’s tax base, and one-third of that revenue is brought in from less than 1% of taxpayers.
- Not a Billionaire - Monday, Oct 1, 18 @ 11:38 am:
That matches the IRS figures One. Also the rates could be even more graduated above 100 and keep it around California. So yes it can be done and the vast majority can get a ptax or income tax cut. But it is a couple of years out.
- Steve - Monday, Oct 1, 18 @ 11:43 am:
- Not a Billionaire -
Illinois can’t get away with California’s tax tables. Illinois doesn’t have that kind of weather. Only California can get away with being California. If Illinois had 300 days of sun maybe it could get away with 9.3% at 52K.
https://www.tax-brackets.org/californiataxtable
- Lucky Pierre - Monday, Oct 1, 18 @ 11:46 am:
JB should drop that nonsense about people like Governor Rauner and him will be paying more when most people and families who have made many sacrifices and worked really hard will have to pay more.
Unlike JB, most of these people he is targeting did not inherit their wealth.
All so he can cut taxes on people who haven’t worked nearly as hard to fund new progressive programs
- Steve - Monday, Oct 1, 18 @ 11:54 am:
In a few short months , with no changes in the Illinois tax code, many wealthy Illinois residents will learn their taxes went up after the 10K SALT cap…
- OneMan - Monday, Oct 1, 18 @ 12:05 pm:
Not a Billionaire
Not really… Let say it happen on dollar 1 above $100,000
1,111,515 returns had 100,000 or more in AG, with a Net Income of $227,109,380,955
So subtract $111,151,500,000 in income that would be taxed in such as away as it does not help the 10.2 billion hole.
You now have $115,957,880,955 in Net income to tax to get 10.2 billion from.
Keep in mind Rich’s number ( as I understand it) is based off of lowering rates for lower income folks. If you are lowering the rate for some folks it is going to follow that the top rate is going to have to be higher than what I calcuated at the higher end.
- Lucky Pierre - Monday, Oct 1, 18 @ 12:22 pm:
Why does JB expect successful small business to expand or remain here if he is going to punish their success?
They could easily locate nearby and pay far less in income and property tax as well as workers comp.
A lot of middle class people will be hurt by a progressive tax even if they are not wealthy
- Midway Gardens - Monday, Oct 1, 18 @ 1:00 pm:
We’re buying a ‘pig in a poke’ with this one. Rich’s article from May in Crain’s, looked at the Center for Tax and Budget Accountability’s graduated income tax (reducing tax on 98%, though very modestly) and taxing 8% over $300K and 9.85% over $1M. That’s a steep rise in taxes and brings in $2B. $8B short of what we’re talking here.
- Whatever - Monday, Oct 1, 18 @ 1:08 pm:
Lucky Pierre ==Why does JB expect successful small business to expand or remain here if he is going to punish their success? They could easily locate nearby and pay far less in income and property tax as well as workers comp.==
A business’ income is taxed by Illinois to the extent it is earned from transactions with Illinois customers. Unless they move or change their customers, moving their business location will not reduce their taxes.
- City Zen - Monday, Oct 1, 18 @ 1:11 pm:
==This is just a shade under the 13.3% California charges 1.5% of Californians==
California income tax rates with Illinois property taxes and Joliet weather. No thanks.
- Last Bull Moose - Monday, Oct 1, 18 @ 1:47 pm:
Are some of JB’s programs automatically funded in part by the Feds? That could change the calculations by a lot.
He may not be able to know that until he gets his people into the Agencies. But the GA members should be able to help him ballpark it.
I wonder if he has ever had to manage to a budget. His campaign spending seems to operate without one.
- Ike - Monday, Oct 1, 18 @ 1:49 pm:
Lucky - rauner signed a budget with a tax increase and spent every penny of it after he doubled the state’s debt, but you have nothing to say about that.
Trump places tariffs, which is a tax, on goods that many Americans, small and big business buy, but you have nothing to say about that either.
Maybe you should worry about the taxes that republicans have enacted before worry about something that hasn’t happened yet (progressive income tax).
- Sue - Monday, Oct 1, 18 @ 2:05 pm:
Ike - you do a disservice to my favorite Ike! Rauner didn’t spend the additional money- it essentially got vacuumed up by pension payments where all of JB’s increase will also go. Every additional revenue dollars is spoken for under Edgar’s( I support JB)pension RAMP
- Taxedoutwest - Monday, Oct 1, 18 @ 2:31 pm:
Whatever, like Mr. JB, you must not know what a Subchapter S Corp. is. A business with this structure pays income tax on the “pass-thru” income to the induvual. It may look like the indivual paid herself a half-million dollars because of her W2, but the vast majority of that “personal inccome” which JB will tax, goes right back into capital investments to keep the business growing and on-going. So, yes, businesses will leave and/or layoff personnel to pay for the increased tax burden.
- anon2 - Monday, Oct 1, 18 @ 2:36 pm:
=== The voting public is entitled to know exactly what the marginal tax rates will be ===
The voting public is entitled to know exactly how Rauner would balance the budget after rolling back the income tax rate to 3%.
- Lucky Pierre - Monday, Oct 1, 18 @ 3:54 pm:
A business’ income is taxed by Illinois to the extent it is earned from transactions with Illinois customers. Unless they move or change their customers, moving their business location will not reduce their taxes.
Indiana companies pay taxes on their income to Indiana not Illinois
Where did you get this whopper from?
- JB13 - Monday, Oct 1, 18 @ 5:09 pm:
Something to look forward to under Gov JB Pritzker: Almost all of us will suddenly become rich.
- Whatever - Monday, Oct 1, 18 @ 7:51 pm:
Lucky Pierre ==Where did you get this whopper from? ==
From Section 304(a)(3) and (h) of the Illinois Income Tax Act, of course. Where else?
- theCardinal - Tuesday, Oct 2, 18 @ 8:15 am:
If the formula is even close to what was in a graph ( I saw someplace on Cap Fax ? ) Ask yourself what services does the “once great state” provide you that you really need or want, to give them another
$ 3,000- 4,000 ( or more) of your money to do?