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* House Republican Leader Tom Cross was in Peoria and Decatur yesterday to tout his “jobs” package, which was mainly comprised of a $379 million reinstatement of the net operating loss deduction, which disappeared this year. The list of proposals got a great reception in the Peoria paper…
Peoria-area companies would see significant benefit from an extension of the research credits, “with about $1 billion of research done every year” in the area, said state Rep. David Leitch, R-Peoria.
That proposal drew plaudits from Caterpillar Inc., which operates its main research and development facility in Mossville.
“Companies like Caterpillar . . . typically don’t do business planning on a short-term cycle,” company spokesman Jim Dugan said, noting the benefits of “a stable tax climate and predictability” when making decisions for the future. “A permanent R&D tax credit in this state is exactly the kind of thing that can help provide that stability.”
There’s no doubt that the R&D credit is helpful. But restoring that credit is only $25 million out of the entire plan.
* Cross also wants to increase the inheritance tax exemption to $5 million, from the current $2 million. From his proposal…
The estate tax falls heavily upon family farms and their owners and heirs. The current price of Illinois farmland means that Illinois farmers who try to bequeath their land to their children, following the traditional pathway through which a farm is moved from parent to child, must pay a heavy “death tax” that is so heavy that the next generation must either mortgage the land or leave the farm.
Farmland is now pushing $10,000 an acre here in Illinois. So, only the first 200 acres would be tax-free upon a farmer’s death, and that doesn’t include all the equipment and buildings. Job creation, however, may be tangential to this. Cross has a lot of very wealthy campaign contributors who would certainly benefit. Total cost to the state with this proposed: $88 million a year.
* Cross also wants to extend the life of all existing enterprise zones for 20 years, even though both legislative chambers are now examining whether some of those zones ought to be eliminated.
* So, how does he intend to pay for it? Well, he says, it’ll pay for itself, although he doesn’t exactly say how…
Cross said the plan, estimated to cost the state just shy of $500 million to implement, has been projected to generate between $600 million and $700 million in revenue - making it a net money-gainer for state coffers - and create as many as 60,000 jobs if it were fully implemented. That could lower the overall unemployment rate by as much as a full percentage point.
More on that point…
“When more people are working and re-investing in our communities, our economy is stronger. For every point we reduce our unemployment rate, the state generates around $600 million in new revenue to fund state programs and services. We can’t afford not to enact these proposals,” said Cross.
* The bill itself is here. Why didn’t he go even bigger?…
“We picked five things we think the Democrats might be open to doing because there have been discussions about these in the past,” said Cross. “I would love to do that, I don’t run the place.”
Discuss.
posted by Rich Miller
Tuesday, Sep 20, 11 @ 3:01 am
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Can Cross also do something for family law firms and family construction companies and family restaurants and . . .?
Comment by Skeeter Tuesday, Sep 20, 11 @ 6:53 am
–Cross said the plan, estimated to cost the state just shy of $500 million to implement, has been projected to generate between $600 million and $700 million in revenue - making it a net money-gainer for state coffers - and create as many as 60,000 jobs if it were fully implemented. –
Oh, those multiplier formulas. They solve everything.
There’s certainly merit to the proposals, as there are to most proposals, but let’s call them what they are, in our current fiscal situation: they’re borrow-and-spend schemes masquerading as tax cuts. Someone gets a break (spend) when the state has no money (borrow).
Comment by wordslinger Tuesday, Sep 20, 11 @ 8:33 am
This is the same Tom Cross right that voted to pass 300 tax and fee increases at the beginning of Blago’s first term in 2003 that did all sorts of damage to business, including pretty much destroying the trucking industry in Illinois?
Just checking.
This plan is perfect for Tom Cross. It’s just like him. Worthless window dressing.
Comment by just sayin' Tuesday, Sep 20, 11 @ 8:48 am
It would be $500 million each year I imagine, not just to implement. Who projected the revenue that it would generate?
Comment by Anon Tuesday, Sep 20, 11 @ 9:14 am
Also, with a little bit of planning, a farmer could pass 400 acres tax free. Upon death, a person can pass property onto their spouse completely tax free. So he would give 200 acres to his kids, the rest to his wife. When the wife dies, she can give another 200 acres to the kids tax free. (Once again, only factoring the land and not other property they own.)
Comment by Anon Tuesday, Sep 20, 11 @ 9:22 am
Does Cross’ plan use the magic beans?
Comment by Anonymour Tuesday, Sep 20, 11 @ 9:37 am
I see how this scheme would generate more donations from rich Repiblicans. How would lowering the inheritance tax generate more revenue for the state?
Comment by reformer Tuesday, Sep 20, 11 @ 10:33 am
A tax reduction doesn’t cost the state money. It allows employers to keep more of their own money to reinvest and hire.
If anyone believes raising taxes creates private sector jobs, please first begin by explaining the job loss Illinois has suffered during the first 8 months of this year.
Comment by Easy Tuesday, Sep 20, 11 @ 10:50 am
===A tax reduction doesn’t cost the state money. ===
So, reduce taxes to zero and it costs no money? Yes, I know that’s a silly thing to say, but so was your point.
Comment by Rich Miller Tuesday, Sep 20, 11 @ 10:53 am
Also, much of the job losses this year were in local governments.
Comment by Rich Miller Tuesday, Sep 20, 11 @ 10:53 am
Assuming these jobs pay $54k, the median household income for Illinois, that’s $3.24B in increased wages. At 5% income tax and 1.5% effective sales tax (some simple math shows this to be the case for our 6.5% rate’s revenue versus total personal income), that’s just over $200M in increased revenue. I guess that means they’re going with a 3x multiplier. I’m not a multiplier expert but, based on some estimates listed at http://en.wikipedia.org/wiki/Fiscal_multiplier, it seems to be at least double what it should be. Unless I’m missing something.
Comment by thechampaignlife Tuesday, Sep 20, 11 @ 10:55 am
Cross voted to raise taxes and fees in 2003, also again in 2009 with the so called capital bill.
Raised sales taxes on many items and fees. Plus he’s a huge gambling expander which is all about the state getting more tax revenue.
Idea that Cross is some kind of tax fighter is a joke.
Comment by too obvious Tuesday, Sep 20, 11 @ 10:55 am
How extremely tone deaf of Cross to introduce this. We are in a budget crisis due to extremely reduced state revenues and he wants to reduce them even more?
Comment by Seriously??? Tuesday, Sep 20, 11 @ 11:41 am
As I recall, early in Blago’s administration, Cross voted to decouple the IL estate tax from the federal tax, which prevented the state tax from dropping.
Comment by reformer Tuesday, Sep 20, 11 @ 2:54 pm
Let’s not forget a fairly salient point: if Cross were speaker and able to pass this or a similar jobs bill, he would also try to push through larger spending cuts than we saw in Spring 2011. So he would make up for the business tax reduction by cutting more in spending. Granted, Cross himself may not support additional cuts, but he has enough members in his caucus who support the cuts, and future GOP candidates are also likely to support steeper cuts in state spending.
Comment by Team Sleep Tuesday, Sep 20, 11 @ 3:36 pm
–if Cross were speaker and able to pass this or a similar jobs bill, he would also try to push through larger spending cuts than we saw in Spring 2011.–
“If” is an awfully powerful word.
Comment by wordslinger Tuesday, Sep 20, 11 @ 3:40 pm
I know, Word. I’m merely tying the two things together. If the HRO had recruited better for the 2010 election cycle, Cross would’ve been close but I don’t see him coming close again for a while. I think we can pick up Dan Beiser’s seat and Lisa Dugan’s seat, but we may lose one or two in the suburbs (if not more).
Comment by Team Sleep Tuesday, Sep 20, 11 @ 3:54 pm
since there doesnt seem to be much sympathy for farmers and other small business owners who have worked their whole life to build a business which is their retirement….how about taxing the pensions and benefits of union retirees? seems fair to me….
Comment by way south of chicago Tuesday, Sep 20, 11 @ 6:13 pm
Way to go, Way South. Keep asking for that government handout. Ever hear of bootstraps? Farmers would be much better off if they would stand up for themselves and not lean on The Government all the time.
Comment by Skeeter Tuesday, Sep 20, 11 @ 8:24 pm
Borrow and spend Rupubelicans!
Comment by chicagoan wanting to move out of IL Tuesday, Sep 20, 11 @ 10:43 pm