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Question of the day

Thursday, May 23, 2019

* Finke

Gov. J.B. Pritzker Wednesday defended his proposed tax increases to pay for a capital bill against critics who said they will disproportionately hurt the poor.

Pritzker acknowledged some of the proposed taxes might be considered regressive, but he said they also represent a stable source of income.

“In order to put an infrastructure bill together, you’ve got to have various revenue sources,” Pritzker said. “It’s important that they are stable revenue sources because you need to bond them out.”

Investors want to know there is a reliable revenue source behind bonds they invest in.

Pritzker proposed more than $1.7 billion in tax and fee increases to finance the $41.5 billion program. That included doubling the state’s gasoline tax and raising license plate fees. Those two alone account for more than $1 billion of the increases.

Pritzker also proposed higher taxes on alcoholic beverages, video gaming and a new tax on cable, satellite and streaming services.

* The Question: Your thoughts on using these sorts of revenue streams to fund a capital bill? Explain.

- Posted by Rich Miller        

23 Comments
  1. - OutOfState - Thursday, May 23, 19 @ 2:29 pm:

    I think to your point on an earlier post, the alcohol, gaming, and television services taxes are choices to varying extents, so I don’t have strong qualms about their regressive nature. However, raising taxes on driving do raise more significant issues for me because most people need to drive to work, making driving effectively not a choice. That said, I think the capital situation is dire, so desperate measures are needed.


  2. - Uncle Merkin - Thursday, May 23, 19 @ 2:31 pm:

    The trouble with this bill is that half of it (transportation) has a natural funding source that can’t be diverted, but building construction relies upon either dedicating a portion of income tax receipts over the long term or scratching our heads every few years for whatever gimmick isn’t already taken.


  3. - Nieva - Thursday, May 23, 19 @ 2:35 pm:

    The middle class may not see a tax increase out of their paycheck but after they cash it the regressive taxes will be equal to or much greater than…


  4. - wordslinger - Thursday, May 23, 19 @ 2:38 pm:

    They’re a reasonable suite of bumps to back the bonds. Beats the alternative of drawing on current GRF sources.


  5. - wordslinger - Thursday, May 23, 19 @ 2:39 pm:

    –Money is fungible.–

    What is that supposed to communicate in this context? Who pays what is the issue.


  6. - Ok - Thursday, May 23, 19 @ 2:51 pm:

    I think there are two things here:

    1) There are a lot of fees and taxes in the proposal on everyday activities that are regressive by themselves.

    2) In the broader context of the capital bill, there really is nothing that focuses higher fees or taxes on the businesses and corporations that will primarily benefit from the projects they propose.

    Those two pieces make this seem really regressive. If you had some smaller regressive fees and taxes that were part of a package that primarily targeted the business side of it, then it would seem fair.

    Right now, it doesn’t.


  7. - Al - Thursday, May 23, 19 @ 2:53 pm:

    I would be happy with a $1.7 billion a year pay as you go capitol plan. No need for Illinois to issue more bonds. Do that in the next recession.


  8. - Steve - Thursday, May 23, 19 @ 2:54 pm:

    It’s hard not to feel empathy for low income workers. Increased fees and gas taxes really do hurt their standard of living.


  9. - Skirmishero - Thursday, May 23, 19 @ 3:15 pm:

    The problem I have is that by a long margin the wear and tear on our highways are caused by ever heavier traffic by greatly oversized trucks. But this is an industry which can afford to lobby our politicians to place the maintenance burden on the drivers of family cars. Same old story - Money talks in Springfield.


  10. - Big Jer - Thursday, May 23, 19 @ 3:31 pm:

    First I second OK’s comment. Especially that businesses and corporations need to pay up their share of capital funding.

    === “It’s important that they are stable revenue sources because you need to bond them out.”===

    Sooo, non- regressive revenue sources are not stable??? That seems to be what Pritzker is saying.

    I have said in comments on other posts that while the progressive tax is a start, the high rate is not high enough. Also there should be a wealth tax.


  11. - Six Degrees of Separation - Thursday, May 23, 19 @ 3:36 pm:

    I do like that the vehicle registration fees are proposed to be stepped by the age of the car, helping low income folks who tend to have older vehicles…and I was the only one here on CapFax that I saw make such a suggestion. Maybe the gov’s people do read my comments, after all. :-)


  12. - FDR Democrat - Thursday, May 23, 19 @ 3:37 pm:

    Unless you tax luxury goods and services only,
    Almost all other consumption taxes are regressive.

    The satellite tax for example impacts lots of
    Consumers in rural Illinois with no other choice


  13. - Responsa - Thursday, May 23, 19 @ 3:41 pm:

    There is a fantastic book titled Evicted that won the Pulitzer prize. Anybody who has not read it should. A key theme in the debilitating circular nature of poorness and homelessness is often the inability for people who do have a job to keep that job due to transportation unreliability–which can include not enough money for gas, bald tires, unpaid license fee, etc. all of which contributes to absence and tardiness. This proposed vehicle and gas tax will play right into that for many people in all areas of Illinois who are already on the edge. I think it is regressive and needs to be reconsidered.


  14. - TheInvisibleMan - Thursday, May 23, 19 @ 3:53 pm:

    ==
    Consumers in rural Illinois with no other choice
    ===

    When I first moved out on my own, I felt cable TV was a utility. Then I matured and realized that it is not. I was just spoiled as a kid that TV always existed.

    They could maybe… read.


  15. - Earnest - Thursday, May 23, 19 @ 4:04 pm:

    I support. These seem like they would produce a fairly consistent level of income which is necessary for long-term planning. I continue to support any of our elected officials who will propose specific revenues or cuts. If there are other specific revenue proposals to generate that level of funds for capital I have missed them.


  16. - SAP - Thursday, May 23, 19 @ 4:12 pm:

    As a few other commenters have said, the fuel tax is a tough one because a lot of people need to purchase fuel to get to work. However, all the fuel in the world won’t do you any good if the roads are so bad that you bust your tires or the bridge collapses.


  17. - Bogey Golfer - Thursday, May 23, 19 @ 4:24 pm:

    The years this state has neglected to properly fund its infrastructure (both roads and state-owned buildings) is the reason we are needing to tax multiple sources. The MFT bump while severe, is a LONG time coming.


  18. - Left of the Lake - Thursday, May 23, 19 @ 4:24 pm:

    Fine with me. The fact the Gas Tax hasn’t changed since 1991 in astonishing. I would agree these will be stable revenues. Plus whats 20 more cents. Gas just went up 40 cents last week and we all still had to buy it…..

    Also, It’s not like you can escape a to a different place to avoid a streaming tax. At only a few cents on the dollar itll be worth the benefits of better infrastructure.


  19. - Blue Dog Dem - Thursday, May 23, 19 @ 4:35 pm:

    Democrats are notorious for taxing the working poor and middle class
    This should have been expected.


  20. - MG85 - Thursday, May 23, 19 @ 5:19 pm:

    We either are against regressive taxes or we aren’t. Why are we raising the gas tax when we can increase the estate tax, create a wealth tax, or a mansion tax.

    Undermines his argument for a “Fair” Tax.


  21. - Wensicia - Thursday, May 23, 19 @ 5:56 pm:

    It’s disingenuous to claim only those making over $250K will pay more in taxes when you plan to hit the lower middle class and poor with these regressive fees and taxes.


  22. - anon2 - Friday, May 24, 19 @ 5:44 am:

    None of those proposed taxes is as regressive as doubling the state cigarette tax, yet that proposal got enthusiastic support here. Objections to regressive taxation, in other words, are not based upon hard and fast principle.


  23. - A Jack - Friday, May 24, 19 @ 8:38 am:

    I am fairly certain that if gas and registration fees are raised it will bolster the argument that the GA cannot be trusted with a progressive tax. I think that they should have thought this through and did the progressive tax first.

    Anyway, while I can afford these increases, I won’t be voting for a progressive tax if these increases pass because I won’t trust the GA to not lower the top bracket.


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