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Baise is right about this

Friday, Feb 14, 2020

* The Center Square

Pritzker said the proposed rates that would follow possible voter approval of a progressive income tax are fair because it would mean lower rates for most taxpayers.

“It’s only the top 2.7 or 3 percent that will pay a little more,” Pritzker said. “Addressing income inequality is very important.”

[Ideas Illinois Chairman Greg Baise] said addressing income inequality wasn’t in the governor’s job description. He said state government hasn’t proven it can wisely spend the money it collects now.

“The flat income tax in this state makes it a little more difficult for your elected representatives, who in the last ten years have raised taxes on taxpayers in Illinois and still we have all those other problems: State debt, property taxes and a pension deficit,” Base said.

The progressive tax rates are separate from the proposed amendment. If the flat tax is done away with and the constitution allows for tiered rates with higher rates on higher earners, state lawmakers could change the rates every year.

“What this argument is about is to give an opportunity for Springfield politicians to have an easier way to raise money when they need, for whatever particular pet project they happen to be wanting to get done in any particular year and this would open that door,” Baise said.

A governor’s “job description” is whatever he says it is within the confines of the constitutions and statutes.

But I do agree with Baise on his other point. It’s difficult for legislators to raise the flat tax because they’re increasing taxes on everyone. Just look at the last 20 years. Blagojevich wouldn’t go near an income tax hike, Quinn waited until he had safely won an election and when it was abundantly clear the state was drowning in red ink during a massive recession, Rauner refused to talk about it when the tax hike partially rolled back and taxes were only raised back up to almost the status quo ante when desperate Republicans crossed the aisle to override him.

It’s a whole lot easier to just jack up the rates on the top 3 percent.

…Adding… From a commenter…

It’s a way to raise the state’s income without going to people who are just getting by for more money. Yes, it’s easier on politicians, but it’s easier on politicians because it’s easier for their constituents. That’s kinda the whole point.

* Related…

* David Borris: Fair Tax will help everyone, including our small businesses

- Posted by Rich Miller        

53 Comments
  1. - Cubs in '16 - Friday, Feb 14, 20 @ 10:44 am:

    ===It’s a whole lot easier to just jack up the rates on the top 3 percent.===

    And? I’m guessing about 97% of the populous would agree with Baise’s point and consider it a good thing.


  2. - Oak Parker - Friday, Feb 14, 20 @ 10:46 am:

    Rod tried the Gross Receipts Tax instead, which got a few votes less than 60 in the House.


  3. - jdcolombo - Friday, Feb 14, 20 @ 10:46 am:

    If it’s that easy to jack up rates on the top 3%, why hasn’t the federal government done it more often? Or all the states that have progressive rates already? Answer: it’s just not “that easy,” partly because the top 1% or 3% already have disproportionate influence in legislatures due to the money they spread around.


  4. - CommonSense - Friday, Feb 14, 20 @ 10:48 am:

    If people really thought IL politicians would make good long-term decisions (such as resolving the pension crisis) most, but not all, taxpayers/voters might support higher taxes… but the track record is so bad, that “starve the beast” is probably warranted until behavior changes.


  5. - Dan Johnson - Friday, Feb 14, 20 @ 10:48 am:

    It’s a lot easier to just not pay pension obligations and let the debt snowball. It’s a lot better to start paying down our incredible debt which is incurred largely from making easy political decisions in past decades to keep income taxes lower than they “should have been”.

    It’s always harder to pay for debt service with no current political benefit.

    It’s harder to raise income tax rates on anyone to pay down debt. It’s easier to pretend we don’t have crazy pension debt to deal with.

    (So let’s not pretend it’s easy to raise taxes on anyone. It’s hard because the anti side can *easily* make slightly disingenous arguments that those bad untrustworthy politicians are raising taxes on all of us that lots of editorial boards and advocacy groups and multi-millionaires end up amplifying)


  6. - Inflation - Friday, Feb 14, 20 @ 10:48 am:

    And the brackets are not indexed to inflation so it will be more than 3% of the population in a few years.

    The brackets should be indexed to inflation.


  7. - PeoriaDem - Friday, Feb 14, 20 @ 10:48 am:

    If they do that, let the electorate punish them for it if they wish. It’s not a cogent argument for why we shouldn’t have a progressive income tax. The gentleman acts as if there wouldn’t be a remedy for a General Assembly that raises income taxes.


  8. - wildcat12 - Friday, Feb 14, 20 @ 10:48 am:

    ===It’s a whole lot easier to just jack up the rates on the top 3 percent.===

    Meaning that it will still be equally difficult to raise taxes on middle class and low-income Illinoisans. It gives the state a way to generate revenue and flexibility in the tax code. The argument that this will suddenly make it easier to raise taxes on the middle class is disingenuous.


  9. - @misterjayem - Friday, Feb 14, 20 @ 10:52 am:

    ““What this argument is about is to give an opportunity for Springfield politicians to have an easier way to raise money when they need”

    Well, good.

    – MrJM


  10. - Oswego Willy - Friday, Feb 14, 20 @ 10:53 am:

    === “The flat income tax in this state makes it a little more difficult for your elected representatives, who in the last ten years have raised taxes on taxpayers in Illinois and still we have all those other problems: State debt, property taxes and a pension deficit,” Base (sic) said.===

    That’s true, but it’s inherently against every single former GOP thought on taxes these past 20 years, and the realities of those thoughts too.

    The former GOP use to harp about Dems “raising your income tax” lots, and how “they” were the firewall.

    Actually, political will and political realities were the firewall as Rich makes the point;

    === It’s difficult for legislators to raise the flat tax because they’re increasing taxes on everyone. Just look at the last 20 years. Blagojevich wouldn’t go near an income tax hike, Quinn waited until he had safely won an election and when it was abundantly clear the state was drowning in red ink during a massive recession, Rauner refused to talk about it when the tax hike partially rolled back and taxes were only raised back up to almost the status quo ante when desperate Republicans crossed the aisle to override him.===

    Why I’m slow walking this around the barn is I don’t disagree with the premise, nope. The political will and the politics to any legislature and governor spending more political capital to raise taxes, “over and over” on the 3% is as much folly as the flat tax, even if it makes more sense that the logic to raise it is easier.

    Pritzker right now has the best scape goat in this; voters.

    Voters need to approve the structural change, and the brackets and cutoffs are in place, no need to vote on those (why it was politically critical that those rates were approved before this amendment, no bad votes coming up on it).

    Again, however, it’s the “protect the 3%” argument, no matter the new frosting and decorations on this new cake.

    Abuse ain’t wrong, but the political will and the politics to get the votes and the signature still remain.

    === The progressive tax rates are separate from the proposed amendment. If the flat tax is done away with and the constitution allows for tiered rates with higher rates on higher earners, state lawmakers could change the rates every year.===

    … the legislature and governor has that same path with a flat tax. Why won’t they do it every year?


  11. - Jibba - Friday, Feb 14, 20 @ 10:54 am:

    Might be better to frame this as a “modernization” of our tax code, since there were hardly any billionaires in 1970. Illinois would just be taxing the way the federal government and most of the rest of the states do it.

    Income inequality is a bit of a loaded phrase to some people, and correcting it can sound ominous.


  12. - George - Friday, Feb 14, 20 @ 10:54 am:

    Everything sound great when someone else is paying for it.


  13. - SAP - Friday, Feb 14, 20 @ 10:55 am:

    I think the Constitutional Amendment would have been a much easier lift if it limited the spread between rates. See also the 8 to 5 ratio between Corporate and Individual rates.


  14. - Oswego Willy - Friday, Feb 14, 20 @ 10:58 am:

    === I think the Constitutional Amendment would have been a much easier lift if…===

    “97% of taxpayers will not see a tax increase”

    Pretty simple selling point, with respect.

    Baise is worried about the 3%, same worry as before…

    Pritzker will like that counter argument, especially with $20-25 million behind it.


  15. - City Zen - Friday, Feb 14, 20 @ 10:59 am:

    ==It’s a whole lot easier to just jack up the rates on the top 3 percent.==

    Or the top 14 percent, which includes everyone over $100,000. That $100-250K bracket wasn’t an accident.


  16. - Perrid - Friday, Feb 14, 20 @ 11:00 am:

    It’s a way to raise the state’s income without going to people who are just getting by for more money. Yes, it’s easier on politicians, but it’s easier on politicians because it’s easier for their constituents. That’s kinda the whole point.


  17. - DIstant watcher - Friday, Feb 14, 20 @ 11:03 am:

    Baise is part of the reason it was so hard to raise income taxes to pay state obligations. Which income tax hike did Baise support? And that he’s losing relevance, he’s still complaining.


  18. - ZC - Friday, Feb 14, 20 @ 11:06 am:

    If voters don’t like the progressive tax rates Springfield politicians set, simple: vote ‘em out.

    The reality is that a progressive income tax would be desperate manna from heaven for a state with its ongoing pension crisis, and possibly a political headache for Democrats. If the GOP ever want to get back in power and then be able to meaningfully govern once they are there, they should be covertly supporting this referenda to pass.

    Opposing an actual enacted progressive tax structure would be their ticket back to political relevance in Lake County and the affluent Cook suburbs.


  19. - 47th Ward - Friday, Feb 14, 20 @ 11:08 am:

    ===“What this argument is about is to give an opportunity for Springfield politicians to have an easier way to raise money when they need, for whatever particular pet project they happen to be wanting to get done in any particular year and this would open that door,” Baise said.===

    The following is a complete list of the tax increases Baise has supported over the years to address the state’s structural deficit:


  20. - mike - Friday, Feb 14, 20 @ 11:20 am:

    1. as a married resident this isn’t at all equitable to me
    2. only 3% are seeing increases now. that won’t last.

    I don’t find it a benefit to making raising taxes on ANYONE easy.


  21. - Oswego Willy - Friday, Feb 14, 20 @ 11:22 am:

    === that won’t last===

    When do you expect it to rise?

    Show your political will to it, too.


  22. - Anyone Remember - Friday, Feb 14, 20 @ 11:22 am:

    ==Baise is right about this==

    Disagree.

    https://www.youtube.com/watch?v=KbU7c6tqdQ4


  23. - Lucky Pierre - Friday, Feb 14, 20 @ 11:24 am:

    The following is a list of spending cuts Democrats have proposed to lower the tax burden on working families in Illinois


  24. - JIbba - Friday, Feb 14, 20 @ 11:25 am:

    “they should be covertly supporting this referenda to pass”

    This has been the Republican playbook for years. Vociferously oppose any tax increase no matter how desperate the financial situation is, make the Dems do it alone or nearly, then spend every dime.


  25. - Grandson of Man - Friday, Feb 14, 20 @ 11:34 am:

    “What this argument is about is to give an opportunity for Springfield politicians to have an easier way to raise money when they need”

    I don’t think states with progressive income taxes raise taxes very often. I think there was something on this blog about this not very long ago. Our neighbor states hardly ever raise taxes.

    So anti-Fair Tax people spin the propaganda wheel again, and it lands on frequent tax hikes. On the wheel is the middle class will be hurt, the rich will leave, economic growth will be hurt, etc. We have shining examples next door, our neighbor states, where most if not all of these things are not happening.


  26. - MG85 - Friday, Feb 14, 20 @ 11:34 am:

    ==It’s a whole lot easier to just jack up the rates on the top 3 percent.==

    So we would rather have a tax system that requires legislative leaders to place undue burdens on people with little means so we can somehow make the rich feel like there’s some of justice for them in paying more?

    Give me a break.

    The fact is, the top 10% in our state has seen their wealth increase by 108% since the 1970’s while the bottom 90% has seen theirs go down by about 8 points.

    I’ll just also say, if your income is 1 million dollars or more annually, and you can’t get by on $993,000.00 a year, then maybe you should budget better. Maybe you should pull yourself up by your bootstraps, meal prep, take a 2nd or 3rd job, sell your car and get a clunker, and do all the tough things folks with lesser means have had to do.


  27. - All This - Friday, Feb 14, 20 @ 11:43 am:

    “ Everything sound great when someone else is paying for it.”
    Everyone pays taxes. Who is this someone else you are referring to?


  28. - walker - Friday, Feb 14, 20 @ 11:46 am:

    To say that it might become easier to raise taxes on the top 1% or top 3% is not a sound argument to support the claim that it is a smokescreen allowing for more taxes on everyone else.


  29. - MG85 - Friday, Feb 14, 20 @ 11:48 am:

    ==I don’t find it a benefit to making raising taxes on ANYONE easy.==

    It’s constitutionally NOT easy. A tax increase will still have to go through committee, the House, agreed upon by the Senate, and signed by the Governor.

    Perhaps, and I’m just spitballing here, if someone wants to run on lowering taxes for the super wealthy…they can do that.

    Again, it seems easy to you because the side who opposes this is a super minority thanks to crazy policy ideas that is tantamount to spend like a mad person, don’t raise any revenue, then blame poor people for needing social services.

    Turns out, that doesn’t sell too well in this state.


  30. - Anotherretiree - Friday, Feb 14, 20 @ 11:51 am:

    == Everything sounds great when someone else is paying for it.”== Quite right George..After all,you’ve had a low tax rate for 50 years and that was paid for by not setting aside the money for we relatively small number of retirees. You’re welcome for the free ride…now pay up…


  31. - Annonin - Friday, Feb 14, 20 @ 11:52 am:

    Yikes
    Now SpankyBaise can start printing mugs, ballons, billboards say “Capitol Fax says I was right” Quite the achievement. Wonder if anyone will acknowledge the Fair Tax also means a cut for lots of folks?


  32. - Boog Alou - Friday, Feb 14, 20 @ 11:53 am:

    ==The flat income tax in this state makes it a little more difficult for your elected representatives, who in the last ten years have raised taxes on taxpayers==

    So, despite the fact that it’s “a little more difficult”, it’s happening anyway. Maybe the game isn’t worth the candle, then.


  33. - Boog Alou - Friday, Feb 14, 20 @ 11:57 am:

    ==most, but not all, taxpayers/voters might support higher taxes==

    Are you sure they don’t? They certainly haven’t been voting the “starve the beast” guys in with functional majorities.


  34. - RH - Friday, Feb 14, 20 @ 12:08 pm:

    Last I saw the proposed plan raises single and joint filers above 250K to 7.75%. Is this really the top 3%? I cant support giving more money to folks with such a dismal track record. Clean up your act then ask us to trust you with more.


  35. - Oswego Willy - Friday, Feb 14, 20 @ 12:14 pm:

    === Is this really the top 3%===

    They have a whole calculator to it…

    shorturl.at/hxNOZ

    You can read how “they” came about that 3% but I get a feeling that tin foil hat will block any facts from seeping in…

    === I cant support giving more money to folks with such a dismal track record. Clean up your act then ask us to trust you with more.===

    Yeah, my felling on that is rated “Mostly True”


  36. - Thomas Paine - Friday, Feb 14, 20 @ 12:15 pm:

    “It makes it easier to raise taxes on people at the top.”

    Or

    “It makes it easier to lower taxes on people at the bottom.”

    Or

    “It makes it easier to balance the budget long term.”

    Greg is wrong and right.

    Because what’s true about a flat tax is that while politics makes it harder to raise taxes, math makes it hard to lower taxes.

    Eventually one of those things has to give, and it is never, ever, ever math.

    Because as we see with The Edgar Ramp, the math always catches up with you. Ask Amanda Kass.

    And, as we have seen with property taxes, politicians never want to lower the tax rate when there is a surplus, because raising it back is never easy…so they resort to all kinds of gimmicks providing all kinds of “targeted” tax breaks that cost a lot to manage and never deliver as expected.

    A flat tax = a static tax, when a dynamic tax structure that evolves and adapts to the economy is what you want.


  37. - Adroit Opiner - Friday, Feb 14, 20 @ 12:24 pm:

    ==Is [above $250K] really the top 3%?==

    Yes. Yes, it is. The level of poverty and income inequality in the state (and nationally, for that matter) is unbelievable, isn’t it? and it’s 7.75% only on each dollar above $250K, not on the entire income. So the effective tax rate for say, a couple with 2 children making $300K net income a year, will go up by approx 0.35%.


  38. - Lester Holt’s Mustache - Friday, Feb 14, 20 @ 12:29 pm:

    Baise would have a point only if he were making a good faith argument, and some of you seem to be mistakenly assuming that he is. He is not. He’s not dumb, he knows taxes have to go up - after all, if he and his people thought they could fix the problem through budget cuts alone, he would have talked Rauner into proposing it. He also knows the argument isn’t between “higher taxes on the wealthy” vs. “no tax increase at all” - it’s between “higher taxes for the wealthy” vs. “higher taxes on everybody”. If the dem plan was just to hike the flat tax, he wouldn’t be fighting this nearly as hard. In fact, he’d probably be giddy that the dems would float such a plan just before an election.

    His only focus at this point is to force the dems to raise taxes on everybody, as opposed to allowing dems to raise taxes just on his wealthy pals. He knows that Pritzker’s plan polls well, while his preferred plan does not.


  39. - A Guy - Friday, Feb 14, 20 @ 12:41 pm:

    ==It’s a whole lot easier to just jack up the rates on the top 3 percent.==

    We’ll see if that holds when it’s the top 30% or more…
    This removes a protection from the Constitutional Convention they were wise to anticipate.


  40. - Oswego Willy - Friday, Feb 14, 20 @ 12:46 pm:

    === We’ll see if that holds when it’s the top 30% or more…===

    Political will is still… political will.

    Still need the votes and a governor that will sign.

    This is folly speculation, rates and timetables, given a new map, gubernatorial re-election, and an unclear look at how those majorities would want to run with that vote and raise with a new map…

    But, scaring folks is a thing.


  41. - Ebenezer - Friday, Feb 14, 20 @ 12:52 pm:

    @ Common Sense =that “starve the beast” is probably warranted until behavior changes.=

    Starve the beast has been the de facto policy for decades, and the response has been to run up debts rather than either raise revenue or cut services to a level commensurate with actual revenues.

    You’ll remember that Rauner pretended to draw a line in the sand by not signing a budget, but kept spending the money.


  42. - theCardinal - Friday, Feb 14, 20 @ 12:55 pm:

    Baise is not wrong on the spending part, which justifies his belief that this will provide a blank check to increase taxes on whomever whenever. The state has not shown an ability to control its spending nor do a decent at budget forecasting. There have been to many budgets that fell short of financial projections.


  43. - A Guy - Friday, Feb 14, 20 @ 12:57 pm:

    ==But, scaring folks is a thing.==

    Do the math. Given the obligations this state has, and the severity of poor fiscal management, you could tax the top 3% at 100% and still not get close to the revenue we need.

    There’s no appetite to change spending habits here. Or truly find great efficiency. Even with new revenue streams, unexpected revenue bumps the past few years, the budgeting process continues to “begin” spending more than we anticipate taking in. And the hole gets deeper.

    The real revenue in taxing is half way down that ladder from the rich. That’s where all the loyal subjects who pay the biggest block of tax are. 80-100K. Don’t worry, they’ll get there pretty quickly. There won’t be a choice. (Just like now, no choice) ugh.


  44. - RNUG - Friday, Feb 14, 20 @ 1:03 pm:

    Baise is more right than wrong. I posted the following on a different tread, but it is just as applicable here.

    == Saving money and improving efficiency is always good. It is nice to see the State actually operating again.

    But in terms of the overall State budget, this is the equivalent of digging around in the couch for change … less than 1% of the overall budget.

    I realize we didn’t get in this hole in a year, and it will take many years to dig out, but two things need to happen:

    1) More revenue that does NOT get spent on new initiatives and pork. I still remember the switch to the flat income tax that was designed to generate extra revenue beyond what the State was then collecting. In less than 5 years, all the ‘extra’ money had been spent and the State had to resort to propose shorting the 5 pension funds in the FY75 budget. I’m a realist and know the State budget as currently structured needs more revenue, but, based on history, I also fear it will be mostly wasted on new spending instead of reducing existing debt.

    2) Serious questioning of what services the State should be delivering and what the proper role of the State should be in delivering said services. The State isn’t doing that good of a job delivering services today; I’ll just cite DCFS and the FOID program as 2 recent examples. Another problem that hasn’t hit the headlines yet is, last I knew, IDOR not offering paper filing this year and requiring all tax returns be electronic; when you need revenue, why in the heck would you make it harder to file and pay income tax?

    Bottom line is the State needs to be a better guardian of taxpayer money. ==


  45. - Oswego Willy - Friday, Feb 14, 20 @ 1:07 pm:

    === Do the math===

    … says the “Guy” who consistently cheered Rauner and his no budgets, lol

    Give me a break, your fiscal honesty is not… honest.

    === Don’t worry, they’ll get there pretty quickly. There won’t be a choice.===

    4-5 years… political will is a factor, ignored yet again.


  46. - Grandson of Man - Friday, Feb 14, 20 @ 1:13 pm:

    “[Ideas Illinois Chairman Greg Baise] said addressing income inequality wasn’t in the governor’s job description.”

    It very much is in a governor’s job description. Recent income gains for lower incomes were made in part thanks to states’ minimum wage hikes. It’s no coincidence that states with fewer workers’ rights are overwhelmingly lower-income. It’s in large part because of government policies.


  47. - Bobby Hill - Friday, Feb 14, 20 @ 1:15 pm:

    RE: - ZC - Friday, Feb 14, 20 @ 11:06 am:
    “If voters don’t like the progressive tax rates Springfield politicians set, simple: vote ‘em out.”

    Actually, it is simpler to just move.


  48. - Froganon - Friday, Feb 14, 20 @ 1:18 pm:

    States with graduated income taxes do better, Google the stats on Minnesota, California, Wisconsin to name a few. Those states do a better job funding infrastructure, education and social services. They are not perfect but better. Minnesota and California led the nation in job creation and economic growth after they raised their rates. The “starve the beast” argument is akin to the “beatings will continue until moral improves”. Check out Kansas’ “economic miracle” under no tax Sam Brownback. The graduated income tax will pass if the majority of Illinoisians are sufficiently fed up with children dying while under DFS supervision (due to ridiculous caseloads and unfunded support services) pothole filed roads, bridges on the verge of collapse and sky high property taxes for schools. Taxes are the price we pay to school our children, have roads, support our neighbors in times of need and live in a decent place.


  49. - City Zen - Friday, Feb 14, 20 @ 1:54 pm:

    ==States with graduated income taxes do better. Those states do a better job funding infrastructure, education and social services.==

    Of the 10 states that spend more per pupil on lower education than Illinois, half have either a flat or no income tax.

    ==Check out Kansas’ “economic miracle” under no tax Sam Brownback.==

    Kansas has a progressive income tax.


  50. - City Zen - Friday, Feb 14, 20 @ 2:00 pm:

    ==pothole filed roads, bridges on the verge of collapse==

    Isn’t that why we doubled the gas tax?

    ==sky high property taxes for schools==

    Do you know something the Property Tax Relief Task Force doesn’t?


  51. - ZC - Friday, Feb 14, 20 @ 2:04 pm:

    Bobby Hill 1:15,

    Fine, leave.


  52. - A Guy - Friday, Feb 14, 20 @ 3:29 pm:

    ==… says the “Guy” who consistently cheered Rauner and his no budgets, lol===

    Never “cheered” no budgets. The truth is a convenient casualty to you. As always. Direct your ire elsewhere.


  53. - Oswego Willy - Friday, Feb 14, 20 @ 3:33 pm:

    Oh - A Guy -

    You conveniently “forget” your cheering. You cheered. Own it.

    :)


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