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Unclear on the concept

Tuesday, Mar 12, 2019

* Gov. Pritzker was asked by reporters today why he doesn’t support expanding the sales tax to cover services. He talked about his general opposition to flat taxes and how, although it may be necessary to increase them in some instances, he prefers progressive taxation.

He also said that some of the folks arguing for an increase in flat taxes are the same people who are advocating for the “3 percent.” You’ll recall that Pritkzer’s proposed graduated income tax would only raise taxes on the top 3 percent of earners, so he’s got a new catch-phrase.

“The bulk of a flat tax increase falls on the middle class and the working class and people that are striving to get to the middle class,” Pritzker said.

* A reporter then chimed in

I was asking about a tax on services. Is that a flat tax?

“Those are flat taxes. What do you think?” an incredulous Pritzker responded. “Everybody gets taxed at the same rate.”

Maybe the reporter just got confused for a moment. Stuff happens and he’s a bright guy, so whatever. And always remember the old saying about how there are no bad questions, just bad answers.

But what you’re seeing here is how difficult it’s going to be to explain this stuff when even experienced political reporters seem to have trouble following the thread.

…Adding… Come to think of it, a graduated sales tax might not be a bad idea. Slap an extra tax on First Class airfare, or $600+ per night hotel rooms or $70,000 cars or whatever.

…Adding… The raw audio is here.

- Posted by Rich Miller        

55 Comments »
  1. - Not It - Tuesday, Mar 12, 19 @ 10:01 am:

    “Everybody gets taxed at the same rate.”

    I fail to see why that is a problem. Everyone gets the same government services, don’t they?


  2. - wordslinger - Tuesday, Mar 12, 19 @ 10:01 am:

    –I was asking about a tax on services. Is that a flat tax?–

    Some remedial courses are in order.


  3. - Kevin Highland - Tuesday, Mar 12, 19 @ 10:03 am:

    Hopefully policy makers don’t pay any attention to that as a concept. A progressive sales tax rate would be a big impact depending on where the rates increase.


  4. - Rich Miller - Tuesday, Mar 12, 19 @ 10:07 am:

    ===I fail to see why that is a problem===

    I’ll put you down as a “No.”


  5. - Demoralized - Tuesday, Mar 12, 19 @ 10:07 am:

    ==I fail to see why that is a problem.==

    Because that flat tax rate has a greater negative financial effect on someone making $50,000 a year than it does on someone making $1 million.

    You’re advocating for the rich when you advocate for a flat tax.


  6. - BenFolds5 - Tuesday, Mar 12, 19 @ 10:07 am:

    The other tough lift is, you can say all you want about taxing the rich. But us middle class slobs KNOW some way or another we will pay. Maybe he should try to say what will be cut. That’s his biggest issue. He hasn’t said anything will be cut. Because, it probably won’t be. Same ole same ole. That’s the issue.


  7. - Anonymous - Tuesday, Mar 12, 19 @ 10:09 am:

    Not it

    I say the same thing regarding my health ins contributions
    It’s based on a progressive scale. I pay more based on my salary I don’t recieve any better benefits than those paying less


  8. - Shemp - Tuesday, Mar 12, 19 @ 10:13 am:

    If I spend more because I make more, am I not paying more?

    Anyhow, did we learn nothing from the luxury tax failure?


  9. - PJ - Tuesday, Mar 12, 19 @ 10:15 am:

    That’s, uh… a bad look for that reporter. Asking the question means he was either A. legitimately asking a governor to clarify a basic economic concept he does not understand, or more likely B. insinuating JB was dodging the question when he wasn’t, demonstrating ignorance of that basic economic concept.

    Hopefully just someone who needed more coffee that morning…


  10. - Rich Miller - Tuesday, Mar 12, 19 @ 10:17 am:

    ===If I spend more because I make more, am I not paying more?===

    Not necessarily. Low and middle income generally spend most everything they make. Higher brackets put money aside and don’t spend it.


  11. - wordslinger - Tuesday, Mar 12, 19 @ 10:21 am:

    –Anyhow, did we learn nothing from the luxury tax failure?–

    I guess not. What are you talking about? The one between Boardwalk and Park Place?


  12. - qualified someone nobody sent - Tuesday, Mar 12, 19 @ 10:21 am:

    Regressive is the proper description of the current sales tax. Very high sales tax in Cook County/Chicago is extremely regressive. Services utilized by more affluent people could be a target for inclusion. However, haircuts, preventative health care or lawn care would be adding to Illinois’ already extremely regressive tax structure.


  13. - not sacrosanct - Tuesday, Mar 12, 19 @ 10:22 am:

    keeping in mind that IL already has a Service Occupation Tax and a Service Use Tax for taxes imposed upon occupations that also transfer property incident to the sales of service


  14. - Just Observing - Tuesday, Mar 12, 19 @ 10:23 am:

    So… JB is against sales taxes?


  15. - Merica - Tuesday, Mar 12, 19 @ 10:25 am:

    That time when you’re trying to legalize pot and create the State’s first graduated income tax, and you go off on a random unrelated tangent talking about a hypothetical graduated sales tax (facepalm). Talk about tripping over your own feet.

    But when you are using a team of Republicans to push a liberal agenda, that’s what you get.


  16. - Rich Miller - Tuesday, Mar 12, 19 @ 10:26 am:

    ===you go off on a random unrelated tangent talking about a hypothetical graduated sales tax===

    Huh? I did that, not him.

    Reading comprehension is important.


  17. - Rich Miller - Tuesday, Mar 12, 19 @ 10:27 am:

    ===JB is against sales taxes? ===

    Again, reading comprehension skills are important. He didn’t say that.


  18. - Last Bull Moose - Tuesday, Mar 12, 19 @ 10:27 am:

    Flat and regressive are not synonyms when applied to excise taxes. What is taxed can make a flat excise tax progressive or regressive.

    Illinois taxes unprepared food at 1% and prepared food at a higher rate. The idea is that if you can pay to have your food prepared you can afford higher taxes.


  19. - Norseman - Tuesday, Mar 12, 19 @ 10:30 am:

    Anyone for creating flash cards? Or, should we have Dick and Jane do a new primer?

    This is a good example of why it’s so easy for the propagandists to mislead the folks.


  20. - Skeptic - Tuesday, Mar 12, 19 @ 10:32 am:

    “He hasn’t said anything will be cut. Because, it probably won’t be. Same ole same ole.” Speaking of “same ole, same ole” what specifically would you cut?


  21. - Grandson of Man - Tuesday, Mar 12, 19 @ 10:33 am:

    A graduated sales tax is a great idea, with the key being greater reliance on those who can more easily afford it. Those making the highest incomes have fared better as a whole than everyone else, so it’s right that they pay more.

    In so many cases factors beside just effort are responsible for wealth. It’s fair that we get more revenue from those who benefit more from built-in social and economic advantages.


  22. - Rich Miller - Tuesday, Mar 12, 19 @ 10:33 am:

    ===Same ole same ole===

    State operations have been hollowed out for a very long time here. You folks who argue for unnamed cuts never seem to grasp that very real fact.


  23. - City Zen - Tuesday, Mar 12, 19 @ 10:40 am:

    Does anyone have the graduated union dues structure for the teacher unions?


  24. - Demoralized - Tuesday, Mar 12, 19 @ 10:46 am:

    ==Does anyone have the graduated union dues structure for the teacher unions?==

    What does that have to do with anything? You bring in the most absurd tangents sometimes.


  25. - Annonin' - Tuesday, Mar 12, 19 @ 10:52 am:

    Usually media is bad at math…may not even do own tax returns. So no clue about details or impact


  26. - Nanker Phelge - Tuesday, Mar 12, 19 @ 10:56 am:

    There is a lot of covetessnous out there as people think that people who have more money should simply pay a higher share (percentage) in taxes just because they have more. That is not a good argument for a graduated tax structure. I wonder how many of those arguing for that if they saw themselves as being rich.


  27. - Rich Miller - Tuesday, Mar 12, 19 @ 10:58 am:

    ===That is not a good argument for a graduated tax structure===

    Um, that IS the argument.


  28. - City Zen - Tuesday, Mar 12, 19 @ 10:59 am:

    ==What does that have to do with anything?==

    I take it that means no?


  29. - Demoralized - Tuesday, Mar 12, 19 @ 11:02 am:

    CZ

    First, you can look it up yourself I’m sure.

    Second, no matter how cute you think you are being your little tangent has absolutely nothing to do with anything.


  30. - James - Tuesday, Mar 12, 19 @ 11:04 am:

    I think JB might be open to a service tax in about 4 years. I assume he wants a second term. So it might be that it’s one tax at a time with him, the tax he campaigned on that should come at no surprise, that he can claim is a mandate from the voters, and that helps him respond to the inevitable label of tax’nspend liberal.


  31. - Stuntman Bob's Brother - Tuesday, Mar 12, 19 @ 11:13 am:

    A way to “graduate” a tax on services may be to provide a tax credit that would exempt the first X hundred (thousand?) dollars of services purchased, and phase out the credit with increasing income. The downside is that it would require an additional worksheet to prove that taxed services were actually purchased in order to get the credit, and that puts the onus of keeping records on the taxpayer. Maybe certain services should be non-taxable (medically-necessary health care, for example).


  32. - BenFolds5 - Tuesday, Mar 12, 19 @ 11:15 am:

    The cuts that can be made are not ones that will happen or popular. Higher Ed has been gutted. Students have have voted with their feet. Let them fend for themselves. You are supposed to be guaranteed a k-12 education. No more. No less. How about we consider what we HAVE to do not WANT. As as a state we drive a new car every year. I drive an old one, I can afford it. Blast away at me, but, the sky has been falling, right?


  33. - Henry Francis - Tuesday, Mar 12, 19 @ 11:18 am:

    Only the richest 3% will pay more taxes.

    That seems like a pretty good argument for a democracy where every person’s vote is equal.


  34. - BenFolds5 - Tuesday, Mar 12, 19 @ 11:19 am:

    Or, do we bail out WIU, SIU, and EIU? Because WIU is the first test of several.


  35. - NoGifts - Tuesday, Mar 12, 19 @ 11:23 am:

    A graduated sales tax would be (nearly?) impossible to implement. The person at the cash register would have to know your income to know what sales tax rate to charge.


  36. - Rich Miller - Tuesday, Mar 12, 19 @ 11:24 am:

    ===would have to know your income===

    Um, no.


  37. - d. p. gumby - Tuesday, Mar 12, 19 @ 11:29 am:

    The notion that a “flat tax” is fair is a myth. It’s regressive as those w/ less pay more in relation to income/financial capability.


  38. - Pelonski - Tuesday, Mar 12, 19 @ 12:04 pm:

    If we expanded sales tax to cover most services but reduced the overall sales tax rate, it would reduce the impact on the poor who tend to buy more products than services. You could also impose a low rate or establish exemptions for what are deemed essential services.

    I think the governor should explore these options instead of just dismissimg the idea.


  39. - Flapdoodle - Tuesday, Mar 12, 19 @ 12:05 pm:

    “A graduated sales tax would be (nearly?) impossible to implement. The person at the cash register would have to know your income to know what sales tax rate to charge.”

    OMG. That’s all, just OMG.


  40. - Rich Miller - Tuesday, Mar 12, 19 @ 12:14 pm:

    ===OMG. That’s all, just OMG.===

    lol

    I know. Talk about unclear on the concept.


  41. - JS Mill - Tuesday, Mar 12, 19 @ 12:39 pm:

    =Or, do we bail out WIU, SIU, and EIU? Because WIU is the first test of several.=

    You make no sense whatsoever. It isn’t “bailing them out” they are state universities not GM, Chrysler, or Wall Street investment companies that gambled with people money. State universities depend on state money to operate. They were denied that money for two years and have experienced declining support (in real dollars) from the state over the years.

    Maybe do some reading to catch up before your next post.


  42. - A guy - Tuesday, Mar 12, 19 @ 12:39 pm:

    Miller’s got more posts here than Willy. That’s got to be a record.


  43. - Chris - Tuesday, Mar 12, 19 @ 12:40 pm:

    “lawn care”

    So, just for context, we will likely pay more tax under the Guv’s income tax proposal. Just need to face the fact that for 40+ years, Illinois has been raising taxes (deficit spending is the same as a time-shifted tax) on future Illinoisans, and now is when the bill is coming due.

    That said, I consider paying another for lawn care a luxury good. I don’t know how anyone considers that a ‘necessity’ that should be exempt from sales tax, when there is sales tax on food (and, again, I don’t mind paying that, either). Just…so odd to me.


  44. - Rich Miller - Tuesday, Mar 12, 19 @ 12:42 pm:

    ===when there is sales tax on food===

    Another person unclear on the concept.

    The depth of ignorance even for a supposedly smart commenting section is simply breathtaking.

    There is no state sales tax on food and medicine.


  45. - muon - Tuesday, Mar 12, 19 @ 12:56 pm:

    Luxury sales taxes are nothing new. Some states that exempt clothes from sales tax leave the tax in place for items over a certain amount or certain non-essential items. In Massachusetts all clothing and footwear under $175 is exempt from sales tax, but items over that amount pay the full rate. In Minnesota most clothing and footwear is exempt from sales tax, but the exemption does not apply to sports equipment, fur clothing and certain accessories. Like any product subject to tax the retailer has to know the category and then sets the appropriate code for the sales terminal.


  46. - Anonymous - Tuesday, Mar 12, 19 @ 1:08 pm:

    How about a sales tax on home sales?

    That would tax the rich more than the middle class.

    Oops. Forgot. That would be a flat tax.


  47. - wordslinger - Tuesday, Mar 12, 19 @ 1:15 pm:

    –How about a sales tax on home sales?

    That would tax the rich more than the middle class.

    Oops. Forgot. That would be a flat tax.–

    Obviously, you’ve never bought or sold property, or weren’t paying attention when you did.

    What do you think a real estate transfer tax is?


  48. - BenFolds5 - Tuesday, Mar 12, 19 @ 1:28 pm:

    JS. K-12 education is guaranteed. Not University. Any dollar is a bailout.


  49. - NoGifts - Tuesday, Mar 12, 19 @ 1:40 pm:

    LOL if you want to, but this sounds like a luxury tax and not a graduated sales tax that would be related to your ability to pay. In the context of the conversation, I don’t think it is unclear on the concept.


  50. - Demoralized - Tuesday, Mar 12, 19 @ 1:53 pm:

    ==Any dollar is a bailout.==

    You can’t be serious


  51. - Todd - Tuesday, Mar 12, 19 @ 2:00 pm:

    hey Rich, buddy slow down there. My F250 pick up listed for $60 when I bought it 5 years ago. . . .


  52. - yinn - Tuesday, Mar 12, 19 @ 2:59 pm:

    Here’s something that could be a little more progressive: license plate fees. I don’t know if Indiana still does this, but when I lived there (until 1985) they would charge you a percentage of the Kelly’s Blue Book value to renew your tags. The idea always appealed to me because of the obvious relationship between the value of one’s vehicle and ability to pay.


  53. - Last Bull Moose - Tuesday, Mar 12, 19 @ 3:41 pm:

    Rich, when I Google sales tax rates in Illinois it shows a 1% rate on unprepared food and medicine. Is this wrong?


  54. - Hal4uk - Tuesday, Mar 12, 19 @ 6:37 pm:

    Rich, when ya “slap” a tax on things that are usually only purchased by rich folks, it almost always has bad consequences. Enough of those folks decide that maybe they don’t want to pay it, won’t pay it, and don’t pay it. For example, it was tried on luxury boats. Remember that? The blue collar boat builders lost their jobs. Those guys trying to feed their families wanted it repealed ASAP.


  55. - Last Bull Moose - Tuesday, Mar 12, 19 @ 8:20 pm:

    To cut through the problem of a graduated sales tax use a tool with two blades. Say you put a 10% sales tax on everything and combined that with a $1,000 payment to each adult Illinois citizen. At $10,000 of pre-tax spending, it is a wash. The person spending $80,000 has a net payment of $7,000. The result is progressive.


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