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Today’s number: 108 percent

Wednesday, Aug 21, 2019

* Ralph Martire on the governor’s proposed graduated income tax

Under this proposed income tax structure, marginal rates will vary from a low of 4.75 percent to a high of 7.99 percent. It is designed to raise around $3.6 billion in new revenue to address some of Illinois’ significant fiscal shortcomings — all while reducing the income tax burden for an estimated 97 percent of Illinois taxpayers. Increasing taxes on just the wealthiest 3 percent while cutting taxes for everyone else would in fact better align state income tax burden with ability to pay. That’s because since 1979, 108 percent of all inflation-adjusted growth in income in our state — or more than all of it — has gone to the wealthiest 10 percent of earners. Which means the bottom 90 percent of Illinois workers are taking home less today than they did four decades ago.

Martire told me his group “ran an inflation adjusted analysis of the data published by the Economic Policy Institute in its Unequal States of America report for 2018” to arrive at that number.

- Posted by Rich Miller        

30 Comments
  1. - Fax Machine - Wednesday, Aug 21, 19 @ 12:42 pm:

    It’s hard to argue that top earners shouldn’t pay an extra 1-3% of their income.

    The stronger argument against the amendment is on the corporate side, where the higher corporate rate plus the personal property replacement tax will give Illinois one of the highest corporate rates in America (some states charge zero)


  2. - Blue Dog Dem - Wednesday, Aug 21, 19 @ 12:46 pm:

    Its going to be a very long time til this vote.


  3. - City Zen - Wednesday, Aug 21, 19 @ 12:48 pm:

    Be New Mexico.


  4. - SpfdNewb - Wednesday, Aug 21, 19 @ 1:04 pm:

    -Be New Mexico-

    Not sure where you are going with this City Zen. Care to elaborate?


  5. - 47th Ward - Wednesday, Aug 21, 19 @ 1:21 pm:

    ===That’s because since 1979, 108 percent of all inflation-adjusted growth in income in our state — or more than all of it — has gone to the wealthiest 10 percent of earners===

    And to distract us from this theft, our overlords get us to fight with each other over guns, abortion, bathrooms, and whatever else will keep us at each others’ throats and not paying attention to how we allow this inequality to persist.

    We’re a bunch of chumps.


  6. - Steve - Wednesday, Aug 21, 19 @ 1:22 pm:

    In 1969, middle income earners had a lower tax burden in Illinois because there wasn’t an income tax.


  7. - Donnie Elgin - Wednesday, Aug 21, 19 @ 1:22 pm:

    ” 108 percent of all inflation-adjusted growth in income in our state — or more than all of it — has gone to the wealthiest 10 percent of earners.”

    They may simply be more productive


  8. - JS Mill - Wednesday, Aug 21, 19 @ 1:27 pm:

    =And to distract us from this theft, our overlords get us to fight with each other over guns, abortion, bathrooms, and whatever else will keep us at each others’ throats and not paying attention to how we allow this inequality to persist.

    We’re a bunch of chumps.=

    BINGO

    =They may simply be more productive=

    Dumbest comment I have read in a long time. There is no correlation to being “productive” and wealth.

    Some incredibly “productive” people make very average incomes.

    Maybe their daddy gave them $200 million to start out.


  9. - Grandson of Man - Wednesday, Aug 21, 19 @ 1:30 pm:

    A BGA analysis shows the wealthiest gained substantially after the 2011 state income tax hike.

    https://tinyurl.com/y5t8pevl

    What better examples do we need to tax upper incomes more than the former governor and the last four years? Rauner’s income skyrocketed as he attacked unions and stole from middle class state workers. As he purposely decimated the state budget, he got astronomically richer.

    If there’s remotely any consolation, it’s that the former governor flushed $95 million of his own money down the toilet, in his zealotry and cruelty. He would have theoretically spent much less paying a higher state income tax than swinging a political sledgehammer at opponents and losing embarrassingly.


  10. - Quibbler - Wednesday, Aug 21, 19 @ 1:33 pm:

    == our overlords get us to fight with each other over guns, abortion, bathrooms, ==

    The fights over these issues are symptoms of inequality, not a “distraction” from it. Also, using “bathrooms” as a shorthand for “trans people wanting to exist in public” is gross.


  11. - Nonbeliever - Wednesday, Aug 21, 19 @ 1:34 pm:

    Speaking of inflation adjustment.

    Unless I am wrong it appears that the graduated income tax proposal does not account for inflation thus eventually driving more and more people into the higher brackets.

    This is what has happened at the federal level with the AMT.

    The Governor and those supporting this proposal must know this and thus it is part of the future ‘plan.’

    One would think this would be a serious issue raised as the time nears for voting on this. It should have been addressed from the get go.


  12. - @misterjayem - Wednesday, Aug 21, 19 @ 1:35 pm:

    ” 108 percent of all inflation-adjusted growth in income in our state — or more than all of it — has gone to the wealthiest 10 percent of earners.”

    They may simply be more productive

    Or they may simply poop gold nuggets.

    There’s an equal amount of evidence for either.

    – MrJM


  13. - 47th Ward - Wednesday, Aug 21, 19 @ 1:39 pm:

    Quibbler, I don’t care what you think about my comment, and Rich would ban me if I shared what I think of yours. So focus on the topic and leave me out of it.


  14. - Last Bull Moose - Wednesday, Aug 21, 19 @ 1:56 pm:

    I agree with the shift to a progressive income tax.

    I am still cautious when I read summaries of these studies. They seem to use income and wealth interchangeably. And I don’t know how much of the income is capital gains. As we learned in 2008, that can shift quickly.

    Two additional changes since 1979 are the percentage of GDP going to medical costs and the percentage of population over 65. These have squeezed those who work.

    I don’t need more studies to support my decision. I do hope they don’t oversell and then see it backfire.


  15. - Lucky Pierre - Wednesday, Aug 21, 19 @ 1:56 pm:

    Grandson,

    Raising the income tax rate in Illinois did not lead to the wealthy making more money.

    The stock market went up, so investors did better each year. Correlation is not causation.

    2011 2.1
    2012 16.0
    2013 32.4
    2014 13.7
    2015 1.4
    2016 11.9


  16. - OutOfState - Wednesday, Aug 21, 19 @ 1:57 pm:

    Nonbeliever - people don’t need to vote on the issue of indexing brackets to inflation. If the amendment is passed, the legislature has free reign to address that or not at its own will.


  17. - City Zen - Wednesday, Aug 21, 19 @ 1:57 pm:

    ==Care to elaborate?==

    It’s one of the least inequitable states, per the study.

    There are states with no income tax that are more equitable than us. There are states with flat income taxes that are more equitable than us. There are states with progressive income taxes less equitable than us.

    Context is key.


  18. - The Way I See It - Wednesday, Aug 21, 19 @ 2:04 pm:

    “More than all of it” could just be shorthand for Republican public policy over the last 40 years.


  19. - Pick a Name - Wednesday, Aug 21, 19 @ 2:06 pm:

    The top 1% of federal taxpayers pay 37.3% of taxes, more than the bottom 90% combined that pay about 30.5%. The top 50% of taxpayers pay about 97% of total individual income taxes.

    Guess it all depends on the definition of pay your fair share.


  20. - Just Observing - Wednesday, Aug 21, 19 @ 2:10 pm:

    If we’re talking about $60 a year in savings for the majority of taxpayers, let’s be honest and say it will result in an increase for the richest and remain static for everyone else.


  21. - Grandson of Man - Wednesday, Aug 21, 19 @ 2:17 pm:

    “Raising the income tax rate in Illinois did not lead to the wealthy making more money.”

    I didn’t say it did. The BGA analysis supports that the wealthy have made great gains in Illinois. Raising the state income tax in 2011 absolutely did not hurt the wealthiest or cause them to leave, which is a main right wing talking point against a graduated income tax.

    The former governor’s income went way up in 2015-2017 from what it was before: $333 million. This happened as he was waging class warfare against unions and state workers, severely damaging the entire state in his quest to make middle class workers poorer and weaker. Thankfully because of a compassionate new governor and cooperative GA, state workers are now starting to get back the steps/longevity pay Rauner illegally took from them.


  22. - SpfdNewb - Wednesday, Aug 21, 19 @ 2:43 pm:

    -City Zen-

    Thank you for the elaboration. Looks like I need to read the study first before continuing on this topic.


  23. - horseplayer - Wednesday, Aug 21, 19 @ 2:43 pm:

    the best way to help the poor people is to not be one of them.


  24. - City Zen - Wednesday, Aug 21, 19 @ 2:47 pm:

    ==108 percent of all inflation-adjusted growth in income in our state — or more than all of it — has gone to the wealthiest 10 percent of earners.==

    How is “earner” defined, individual or household? In Illinois, 10% of the tax returns have income $150,000 or more. That could qualify as two working parents both making $75,000. That’s hardly a windfall. So school teachers marrying accountants is a bad thing?

    Context is key.


  25. - Nonbeliever - Wednesday, Aug 21, 19 @ 2:48 pm:

    - OutOfState - Wednesday, Aug 21, 19 @ 1:57 pm:

    “Nonbeliever - people don’t need to vote on the issue of indexing brackets to inflation. If the amendment is passed, the legislature has free reign to address that or not at its own will.”

    Obviously you are purposely missing the point!


  26. - Nonbeliever - Wednesday, Aug 21, 19 @ 2:56 pm:

    When this whole idea was proposed as a ‘Millionaires Tax’ I believe it had a great chance to be passed.

    Once it went down to a 1/4 of that and then with no inflation adjustment- well it may or may not pass.

    The DEMS should have stuck with the Millionaires Tax concept


  27. - City Zen - Wednesday, Aug 21, 19 @ 3:19 pm:

    ==Unless I am wrong it appears that the graduated income tax proposal does not account for inflation thus eventually driving more and more people into the higher brackets.==

    That’s a feature, not a bug.

    ==If the amendment is passed, the legislature has free reign to address that or not at its own will.==

    There’s already legislation. They chose not to address it.


  28. - JS Mill - Wednesday, Aug 21, 19 @ 4:46 pm:

    =That’s a feature, not a bug.=

    I am sure you can get the IRS do go along with your idea.


  29. - Da Big Bad Wolf - Wednesday, Aug 21, 19 @ 5:45 pm:

    ==How is “earner” defined, individual or household?==

    According to the study “tax units” meaning an individual, a married couple filing together and a married couple filing separately total four “tax units.”


  30. - Blue Dog Dem - Wednesday, Aug 21, 19 @ 8:21 pm:

    I blame baseball. Sabermetrics. Analytics.

    Now everything is evidence based, data driven or an inflation adjusted analysis.


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