* Civic Federation…
The Governor said the new [graduated income tax] would bring in an additional $3.4 billion per year. That is exactly enough to cover an annual operating deficit estimated at $3.2 billion plus an extra $200 million—the amount recently proposed by the administration to bolster the State’s severely underfunded retirement systems. However, the Civic Federation has not been able to replicate the $3.4 billion number and the Governor’s Office has not yet provided information about the methodology used to arrive at the figure.
* I asked what result the group had come up with and was told today that their numbers crunchers hadn’t yet completed the calculations…
The Civic Federation has not published a revenue estimate because we are still working to gather complete information. We plan to complete our analysis and update our blog when we have additional information.
They were apparently waiting on the same info I was.
The Illinois Policy Institute is claiming that its own numbers crunchers found the graduated tax would yield $2.4 billion in the first full fiscal year. The group has FOIA’d the methodology info, but the governor’s office said yesterday it would need five more days to respond.
* As I noted above, I’ve been asking for the same information, and the governor’s office just sent this to me…
The Governor’s Office of Budget and Management worked with the Department of Revenue to arrive at a realistic projection for the amount generated by the fair income tax.
The team includes longtime respected experts like Deputy Governor Dan Hynes, who served as the state’s comptroller for 12 years; Department of Revenue Director David Harris, a former Republican lawmaker who served in a leadership role for many years on both the revenue and appropriations committees; GOMB Director Alexis Sturm, who has worked in government finance for more than 20 years; and GOMB Chief of Staff Cameron Mock, who has worked in government finance for nearly a decade.
A breakdown of how many tax filers are in each income bracket can be found below.
To reach the 2021 projection, the team used data from the 2016 tax year, the most recent year for which complete data is available. They assumed filers’ income for 2021 would have grown at the most recent respective 5-year compound annual growth rate (CAGR), and to ensure the estimate was conservative, included a one-year income stagnation in the event of a slowing economy.
The team assumed that local governments would receive 6 percent of the new revenue through LGDF and that $230 million of the new revenue would be used for property tax relief and child tax credits.
The team assumed that 10 percent of filers with net income more than $1 million and less than $2 million would try to capture a lower marginal rate. This is an extremely conservative assumption. In reality, only filers who have a net income between $1,000,000 and $1,009,305 would pay more in taxes than they would receive in income above $1,000,000 when the 7.95 percent rate is applied to all their income.
* Click the pic for a larger image…