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It’s simple math: Why the wealthy would much prefer a flat tax increase

Wednesday, Oct 14, 2020 - Posted by Rich Miller

* If you click here, you can calculate what your state income tax would be if the governor’s graduated income tax plan is implemented.

The math does not favor the wealthy. For instance, if your state-based adjusted gross annual income is $100 million, your taxes will rise by $3,040,000 under the “Fair Tax.”

* Gov. Pritzker and others have long warned that if the graduated income tax fails at the ballot box, then the state’s flat income tax would likely have to be increased by at least a percentage point.

In that one-point flat-tax scenario, the aforementioned $100 million earner would see their current state income tax bill rise by $1 million, from $4,950,000 to $5,950,000. While still an increase, that’s a savings of $2 million a year over the proposed graduated income tax rate. Pretty darned sweet.

Even if the flat tax is increased by two points, that $100 million earner would still save a million bucks a year compared to the graduated income tax rate.

It’s just a no-brainer for the self-interest of the super-wealthy. I don’t blame them one bit for fighting it.

* So, color me skeptical of claims like this

Democratic Gov. J.B. Pritzker’s cousin Jennifer Pritzker donated $500,000 on Tuesday to a group pushing for the defeat of the governor’s signature agenda item on the Nov. 3 ballot — a proposed state constitutional amendment to impose a graduated-rate income tax.

“There is evidence that the tax hike amendment could eventually raise taxes on the middle and working classes. With so many families and small businesses struggling to recover from the ravages of the pandemic, raising taxes is not a financial solution Illinoisans can afford to enact,” said Jennifer Pritzker, like her cousin a wealthy heir to the Hyatt Hotel fortune.

Please.

…Adding… For the “what about” people in comments, this same argument applies to $10 million AGR or $2 million AGR. Makes no difference. They’re gonna pay less when the flat tax is increased vs. a new graduated income tax.

  57 Comments      


*** UPDATED x1 *** 2,862 new cases, 49 additional deaths, 1,974 in hospitals, 4.6 percent positivity rate, southern Illinois’ rate drops a bit, IDPH releases holiday safety guidance

Wednesday, Oct 14, 2020 - Posted by Rich Miller

* Highest number of hospitalizations since June 11. Press release…

The Illinois Department of Public Health (IDPH) today reported 2,862 new confirmed cases of coronavirus disease (COVID-19) in Illinois, including 49 additional confirmed deaths.

    Adams County: 1 female 80s, 1 male 80s
    Christian County: 1 male 60s
    Coles County: 1 male 80s
    Cook County: 1 male 60s, 1 female 70s, 1 male 70s, 3 males 90s
    DeKalb County: 1 female 60s
    DuPage County: 2 females 80s
    Ford County: 1 female 80s
    Franklin County: 1 female 100+
    Jefferson County: 1 male 70s
    Jersey County: 1 female 90s
    Jo Daviess County: 1 female 90s
    Kane County: 1 male 80s
    Knox County: 2 females 80s, 1 male 80s
    Logan County: 2 male 80s
    Madison County: 1 male 70s, 1 female 90s
    Marion County: 1 male 80s
    Marshall County: 1 male 70s, 1 female 80s
    Peoria County: 1 female 80s, 1 female 90s
    Randolph County: 1 male 80s
    Rock Island County: 2 males 60s
    Sangamon County: 1 male 50s, 2 males 70s
    St. Clair County: 1 male 80s, 1 female 90s
    Vermilion County: 1 male 80s
    Will County: 1 female 60s, 1 female 70s, 1 male 70s, 2 female 90s
    Winnebago County: 1 female 40s, 1 female 80s, 1 female 90s
    Woodford County: 1 female 60s

Currently, IDPH is reporting a total of 327,605 cases, including 9,074 deaths, in 102 counties in Illinois. The age of cases ranges from younger than one to older than 100 years. The preliminary seven-day statewide positivity for cases as a percent of total test from October 7 – October 13 is 4.6%. Within the past 24 hours, laboratories have reported 52,669 specimens for a total of 6,463,923. As of last night, 1,974 people in Illinois were reported to be in the hospital with COVID-19. Of those, 390 patients were in the ICU and 153 patients with COVID-19 were on ventilators.

Beginning today, IDPH is adjusting how data for Region 6, east central Illinois, is reported to most accurately capture spread across the region. Champaign County and its data will continue to be included in Region 6, but University of Illinois at Urbana-Champaign saliva testing will be broken out separately. This will allow us to better identify testing needs and trends in the region.

Starting tomorrow, IDPH will begin including both molecular and antigen tests in the number of statewide total test performed in Illinois. Previously, due to the limited number of antigen tests and limited information about antigen test accuracy, antigen tests were not included in the total number (which comprised less than 1% of total tests performed). Antigen tests, like BinaxNOW™, are now becoming more readily available, therefore, IDPH will include both molecular and antigen tests in its total number of tests starting October 15, 2020.

Following guidance from the Centers for Disease Control and Prevention, IDPH is now reporting separately both confirmed and probable cases and deaths on its website. Reporting probable cases will help show the potential burden of COVID-19 illness and efficacy of population-based non-pharmaceutical interventions. IDPH will update these data once a week.

*All data are provisional and will change. In order to rapidly report COVID-19 information to the public, data are being reported in real-time. Information is constantly being entered into an electronic system and the number of cases and deaths can change as additional information is gathered. Information for a death previously reported has changed, therefore, today’s numbers have been adjusted. For health questions about COVID-19, call the hotline at 1-800-889-3931 or email dph.sick@illinois.gov.

* Southern Illinois’ Region 5 hit the 8 percent positivity rate yesterday, but it dropped back down to 7.7 percent today. Gov. Pritzker warned today that three days above an average 8 percent positivity rate would trigger mitigations.

* Related…

* These Chicagoans Had Coronavirus And Never Got Better: ‘Long-Haulers’ Face Bizarre, Painful Symptoms After Recovery

* IDPH: Holiday Season Safety Tips

*** UPDATE *** Press release…

The Illinois Department of Public Health (IDPH) today reported 26 counties in Illinois are considered to be at a warning level for novel coronavirus disease (COVID-19). A county enters a warning level when two or more COVID-19 risk indicators that measure the amount of COVID-19 increase.

Twenty-six counties are currently reported at a warning level – Cass, Christian, Clay, Clinton, Coles, Crawford, Effingham, Fayette, Henderson, Jackson, Jefferson, Johnson, Knox, Lake, Lee, Mason, Massac, Pulaski, Richland, Saline, Shelby, Union, Vermilion, Whiteside, Winnebago, Warren.

Although the reasons for counties reaching a warning level varies, some of the common factors for an increase in cases and outbreaks are associated with large gatherings and events, bars and clubs, weddings and funerals, university and college parties as well as college sports teams, family gatherings, long-term care facilities, correctional centers, schools, and cases among the community at large, especially people in their 20s.

Public health officials are observing businesses blatantly disregarding mitigation measures, people not social distancing, gathering in large groups, and not using face coverings. Mayors, local law enforcement, state’s attorneys, and other community leaders can be influential in ensuring citizens and businesses follow best practices.

Several counties are taking swift action to help slow spread of the virus, including increasing testing opportunities, stressing the importance of testing to providers, hiring additional contact tracers, working with schools, and meeting with local leaders.

After learning of an individual who tested positive for COVID-19 and visited a bar, the Whiteside County Health Department (WCHD) worked with the business and quickly alerted the community of potential exposures, helping limit spread of the virus. Additionally, WCHD provides pre-event consultations for establishments planning events that may draw larger crowds. Pre-event consultations include, educating businesses about the importance of masking and social distancing, as well as reviewing emergency rules, and guidance, and other ways to keep attendees and the community safe.

IDPH uses numerous indicators when determining if a county is experiencing stable COVID-19 activity, or if there are warning signs of increased COVID-19 risk in the county. A county is considered at the warning level when at least two of the following metrics triggers a warning.

    New cases per 100,000 people. If there are more than 50 new cases per 100,000 people in the county, this triggers a warning.
    Number of deaths. This metric indicates a warning when the weekly number of deaths increases more than 20% for two consecutive weeks.
    Weekly test positivity. This metric indicates a warning when the 7-day test positivity rate rises above 8%.
    ICU availability. If there are fewer than 20% of intensive care units available in the region, this triggers a warning.
    Weekly emergency department visits. This metric indicates a warning when the weekly percent of COVID-19-like-illness emergency department visits increase by more than 20% for two consecutive weeks.
    Weekly hospital admissions. A warning is triggered when the weekly number of hospital admissions for COVID-19-like-illness increases by more than 20% for two consecutive weeks.
    Tests performed. This metric is used to provide context and indicate if more testing is needed in the county.
    Clusters. This metric looks at the percent of COVID-19 cases associated with clusters or outbreaks and is used to understand large increase in cases.

These metrics are intended to be used for local level awareness to help local leaders, businesses, local health departments, and the public make informed decisions about personal and family gatherings, as well as what activities they choose to do. The metrics are updated weekly, from the Sunday-Saturday of the prior week.

A map and information of each county’s status can be found on the IDPH website at https://www.dph.illinois.gov/countymetrics.

  18 Comments      


*** LIVE COVERAGE ***

Wednesday, Oct 14, 2020 - Posted by Rich Miller

* Follow along with ScribbleLive


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*** UPDATED x2 *** “Fair Tax” roundup

Tuesday, Oct 13, 2020 - Posted by Rich Miller

* Zorn takes a look at the constitutional amendment passage requirement of 60 percent of those voting on the measure or over 50 percent of all those voting in the election

The either/or requirement makes interpreting the results feel like one of those vexatious story problems from junior high math. If 6 million people go to the polls, and half a million of them leave the referendum question blank on their ballots, what share of the yes/no votes needs to be “yes” for the amendment to pass?

The answer is 54.5% because the “majority of all votes cast” requirement would be achieved first with 3,000,001 votes, even though it is a lot lower than the three-fifths (60%) of yes/no votes cast — the other path to passage.

And, not uncoincidentally for the purposes of this column, it is approximately the percentage of the vote that Gov. J.B. Pritzker received when he beat incumbent Gov. Bruce Rauner in the 2018 general election in a campaign marked by his strong support of switching to a graduated-rate system.

The basic idea behind this unusually convoluted requirement is that the more the public is engaged with a referendum question, the more the constitution wants to honor the principle of majority rule. But the more the public is tuned out — doesn’t care or doesn’t feel informed enough to vote either way — the more the constitution wants to raise the standard for passage so that reforms that are obscure, complicated or actually unpopular don’t slip in under the radar.

Go read the rest.

* In a related development…


* The Wall St. Journal’s editorial board is, not surprisingly, opposed to the measure

Illinois voters will decide next month whether to enact a progressive income tax, paving the way for a new top rate of 7.99%. In addition to the direct damage higher rates would inflict on bottom lines, voters should consider the high-tax neighborhood they’d be moving to.

The Tax Foundation ranks states by tax competitiveness, and its latest analysis is bad news for Illinois Gov. J.B. Pritzker and other progressive-tax backers. The Prairie State currently ranks 36th worst in overall tax burden because its flat individual rate of 4.95% offsets very high property and other taxes. (See the nearby table.)

But its proposed slate of new individual income tax rates, along with a corporate tax hike tied to the same ballot measure, would drop the state’s rank overall to 47th. That would move Illinois into Dante’s ninth ring of tax hell, ahead of only New Jersey, New York and California.

* And it’s little surprise that the Sun-Times editorial board is for it

Millionaires and billionaires don’t like paying higher taxes any more than the rest of us, though they are in a much better position to do so. It’s in their bald self-interest to kill the Fair Tax proposal, meaning Illinois would remain stuck with its regressive flat tax — no matter what harm is done, down the road, to middle-class and low-wage earners.

And you can count on that: If Illinois does not approve a graduated income tax, the likelihood that ordinary working people will have to pay higher taxes will only grow.

The states’ finances are in crisis and additional revenue is necessary. Cutting expenses alone won’t do the trick. If that additional tax revenue is not paid by the very wealthiest taxpayers, as set out in the Fair Tax plan, it will be paid by everybody else — every carpenter, hair stylist, accountant and store clerk.

* Hannah Meisel

But what the fate of Pritzker’s so-called Fair Tax will mean for Chicago’s financial future is less clear cut. The potential for extra revenues at the state level doesn’t make a significant dent in the city deficit, and isn’t a silver bullet for fully funding items Lightfoot campaigned on last year.

The mayor has been far less vocal than the governor about where she stands on the graduated income tax, endorsing it when prompted, but not leading on the issue.

“I’m a for,” Lightfoot told reporters last week when asked about her position on the tax change. “I’ve been fortunate enough in my life to make a substantial amount over time. And I think people recognize the need for everyone to pay their fair share, but I think we have to do it in an equitable way and I think that’s what the Fair Tax, as it’s known, seeks to accomplish.” […]

But State Sen. Rob Martwick (D-Chicago), who championed a progressive tax for years and sponsored the graduated tax amendment in 2019, was not shy about his belief that the city’s finances would be devastated without voter approval of the tax, as it would “stabiliz[e] the state revenues that flow through to the city.”

“As bad as the state’s budget is, the city’s is immeasurably worse,” Martwick said. “If [the graduated income tax amendment] doesn’t pass, it could be catastrophic all around, especially for the City of Chicago.”

* The Illinois Policy Institute gonna Illinois Policy Institute

There are 2 million Illinoisans of retirement age, and currently the state does not tax their retirement income. But there is significant reason to believe the “fair tax” amendment to the Illinois Constitution would bring retirement taxes if passed.

And then there might be 10,577 fewer of those seniors in Illinois if its experience with a progressive tax matches Connecticut’s.

I love how they project down to the person. You can pretty much figure a projection is phony when you see that.

* Butler has it right

Governor J.B. Pritzker is assuring voters that a proposed graduated income tax will not impact their retirement income. Pritzker said late last week that opponents of the “fair tax” are planning to tax retirement income. Republican opponents say Pritzker’s statement isn’t true. Republican lawmaker Tim Butler says that it is unlikely that legislation will be proposed to change rules on taxing retirement income, whether the graduated income tax passes or not.

…Adding… Rep. Butler says he doesn’t know where WJOL got that info and pointed to this story

Rep. Tim Butler, R-Springfield, opposes the proposed tax amendment.

“From the House Republican perspective, we in no way support taxing retirement income,” Butler said. “I don’t know where the governor comes up with that statement.”

Redfield said whether this tax is passed or not, the legislature has always had the power to tax retirement income, but he said he thinks it’s unlikely that there will be a legislation change to that.

“What stops from taxing retirees today is that we have a flat tax in Illinois. If we tax one retiree, we have to tax all retirees,” Butler said. “That’s the firewall against raising taxes.”

…Adding… WJOL updated

A previous version of this story attributed comments to lawmaker Tim Butler that were not accurate. We regret the error.

*** UPDATE 1 *** I told you last week that a judge had denied IPI’s motion for a TRO against part of the official Fair Tax explanation language. The final order was released today. Excerpt

While Plaintiffs have a clear right to a free and equal election, they have not demonstrated a clear right to corrective action on an emergency basis, for it is not patently clear the language on the ballot or pamphlet is so rnisleading that it abridges a constitutional right in need of protection. Like it or not, the proposed amendment does give the State the ability to impose higher tax rates on those with higher income levels and lower income tax rates on those with middle or lower income levels, just as the ballot describes. Plaintiffs have not shown on the clearest of grounds that this language is so misleading and confusing to give rise to a constitutional violation. Plaintiffs merely conclude and speculate that the language is deceiving and confusing to voters without any specific evidence demonstrating confusion or obstruction to a particular individual or group of voters.

*** UPDATE 2 *** Press release…

COL (IL) Jennifer Pritzker, ARNG (Ret.) has donated $500,000 to the Coalition to Stop the Proposed Tax Hike Amendment as a measure to help protect the citizens of Illinois. Jennifer Pritzker believes the proposed graduated tax will only hurt already overburdened Illinois taxpayers and removes any political barrier to impose a tax on retirement funds.

“There is evidence that the tax hike amendment could eventually raise taxes on the middle and working classes. With so many families and small businesses struggling to recover from the ravages of the pandemic, raising taxes is not a financial solution Illinoisans can afford to enact,” said Jennifer Pritzker, President and CEO of TAWANI Enterprises, President and Founder of the TAWANI Foundation and the Pritzker Military Foundation, and Founder and Chair of the Pritzker Military Museum & Library.

  54 Comments      


*** LIVE COVERAGE ***

Tuesday, Oct 13, 2020 - Posted by Rich Miller

* Follow along with ScribbleLive


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* Reader comments closed for the weekend
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* LIG initially recommended no expulsion proceeding against Benton - One complainant claimed 'inaccuracies' in the report
* Speaker Welch statement (Updated x2 with Pritzker statement)
* LIG report released
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* Today's must-read
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