More taxsplaining is apparently needed
Monday, Mar 11, 2019
Um, the story quotes precisely one tax expert questioning whether it’s enough. And that’s Ralph Martire at the Center for Tax and Budget Accountability.
The Institute for Illinois’ Fiscal Sustainability at the Civic Federation, which also studies these things, proposed a revenue increase last month of about $3.1 billion in Fiscal Year 2021 and $3.4 billion in FY22, which is about what Pritzker is proposing. The Civic Federation wants to get to the same destination by taxing retirement income and expanding the sales tax - the first of which is political death and both of which are opposed by Pritzker.
And when you factor in Pritzker’s proposed tax hikes for next fiscal year, you add another $733 million to the $3.4 billion Pritzker’s tax hike would bring in, for a total of $4.1 billion (that figure doesn’t include one-time taxes and fees, like the sports wagering and recreational cannabis licensing fees).
* Crain’s Chicago Business editorial…
Which “outside experts” are these? I asked and haven’t yet heard back. The only entity I can find which has proposed such a thing is the Civic Committee of the Commercial Club of Chicago. That group isn’t so much known for being a fiscal expert as it is for being a propaganda outlet. They’re the ones who beat the drum for years for unconstitutional pension reforms and then put up “LOL Illinois” billboards all over the state.
The group wants an extra $2 billion a year from various taxes to inject into the pension funds to bring down long-term costs. It’s a good idea. Martire has a similar proposal. But Pritzker wants to get there a different way: by transferring state assets into the funds. We’ll circle back to that idea later today or tomorrow.
Is more revenue needed than Pritzker is proposing? I’d say so. But how much can you realistically get?
* Meanwhile, once again we see a not-great way to describe the proposed graduated income tax…
Still unclear on the concept of marginal vs. effective rates.
* A much better way of describing the proposal…
* One more…
I asked the Illinois Policy Institute last week how they came up with their projection and was promised an explanation and never heard back. The Pritzker administration says it devised its projection by working with the Illinois Department of Revenue and others.
Also, “dynamic” scoring can be twisted to do whatever the scorer wants. It’s more magic than math.