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* The AP looks at the graduated tax hike proposals…
Influential Democrats sponsoring legislation in Springfield say the graduated tax — a system used by the federal government and 34 of 41 other states that charge an income tax — is the fairest form of taxation. They say a majority of Illinoisans would get a tax cut from the current rate, but the financially struggling state would take in more money because the wealthiest earners would pay more.
“We hear it said that Illinois is a wealthy state, and it is, but there’s also this great disparity,” said Rep. Naomi Jakobsson, a Democrat from Champaign who’s sponsoring the measure in the Illinois House. “We should have done this a long time ago.”
But Republicans say it’s a tax increase in disguise and accuse Democrats of going back on their word that the 2011 income tax hike would be temporary. They note Democrats’ promises that the 2011 increase — from 3 percent to 5 percent for individuals — would help Illinois out of its financial crisis, yet two and a half years later, the budget has grown and the state still has a multibillion-dollar backlog of bills.
I didn’t realize that Rep. Jakobsson was so influential. Also, the budget has grown mainly because the state is finally making its full pension payments. And the bill backlog has been shrunk, but not mentioned is that there was a provision in the tax hike bill earmarking some of the new revenues to make payments on a bond to pay off the backlog. That bill didn’t pass because it required a three-fifths majority in both houses.
Also, keep in mind that a constitutional amendment for a graduated income tax will require a three-fifths vote in both chambers. It can probably clear the Senate, but the House is a far different story as long as the Republicans remain opposed.
* Jim Nowlan…
The Center for Tax and Budget Accountability in Chicago has a mission of putting a few more bucks in the pockets of the working poor. It is a good-hearted group, and I helped found it. The Center has proposed a state income tax that would be graduated from 5 percent to 11 percent, the highest rate for those with incomes over $1 million.
The Center claims that under their proposal 94 percent of Illinois workers would actually pay less in taxes, because of liberal individual exemptions from the tax, while the rich would share more of the burden
We do need to figure out how to rebuild a middle class that has eroded into working poor status in recent decades. The Center points out that between 1979 and 2010, inflation-adjusted wages for the bottom 60 percent of workers actually dropped while for the top ten percent wages went up 23 percent.
The big trouble is the CTBA proposed rates aren’t in either of the two proposed constitutional amendments. The rates would be set by statute, and they could be anything.
And the Constitution’s cap on corporate income tax rates (currently an 8-5 ratio between corporate and personal rates) would be eliminated.
* Minnesota’s recent enactment of higher progressive rates has been met with pretty strong public approval…
An income tax increase on the wealthiest Minnesotans, the centerpiece of Gov. Mark Dayton’s budget, is supported by 58 percent of those polled, compared with 36 percent opposed. […]
(T)he Legislature created a new tax rate of 9.85 percent for adjusted gross income above $250,000 for couples and above $150,000 for individuals. Income below those levels will continue to be taxed at existing rates. Dayton has said the increase applies to about 2 percent of all taxpayers.
* The Question: Should the General Assembly approve a public constitutional referendum for a graduated income tax? Take the poll and then explain your answer in comments, please. Also, “explain” doesn’t mean that you repeat somebody else’s talking points.
posted by Rich Miller
Monday, Jul 22, 13 @ 11:42 am
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Despite the guarantee that it will cost me more, I voted yes. The current IL system is ridiculously regressive and painful for the poor.
Comment by Chicago Cynic Monday, Jul 22, 13 @ 11:50 am
Absolutely. We need that option in Illinois. A progressive income tax is smarter, fairer, and raises more revenue. And I am pretty confident that it would pass when put to the voters.
Comment by Montrose Monday, Jul 22, 13 @ 11:50 am
I’d think our conservative friends would approve of voters making the final decision, instead of politicians. Why not submit the issue to binding referendum, have a debate about the pros and cons, and let the people decide?
The fact is the current IL tax system is among the most regressive among the 50 states, taking a much larger share of income from the working poor than from the wealthy. I wonder if that’s what passes for fairness among our GOP friends — basing tax burden on INability to pay.
Comment by reformer Monday, Jul 22, 13 @ 11:55 am
How much of our most recent tax increase went to paying down our bill backlog?
If memory serves, the original plan called for us to:
1.) Increase taxes
2.) Issue bonds
3.) Use the cash from those bonds to pay off our bill backlog
4.) Use proceeds from the tax increase to pay off the bonds
We got the tax increase. We did not issue the bonds.
Where has the money that was supposed to make payments on those bonds gone instead?
Because it sure hasn’t gone to paying our bills.
Comment by Formerly Known As... Monday, Jul 22, 13 @ 11:55 am
It doesnt mean a thing. Just like the federal side, even if you did get MORE actual dollars in to the state, a year over year deficit will still happen in Illinois. Then where will the money come from.
I always just ask this one question. What % of income should all levels of government be entitled to? Combine state, federal, local, property taxes, etc What should the max % be?
its easy to vote to tax “someone else” or those “evil rich”. But you can also get to a point where those that have the means can leave… Lets not squeeze the golden goose to hard.
Comment by RonOglesby Monday, Jul 22, 13 @ 11:56 am
yes
and if you will forgive the slighlty off kilter approach, while the individual state income tax for IL may be the same, most wealthy individuals do not pay the same percentage of income in taxes.
Since investment income is taxed at a lower rate, and social security is only taked on the first 106k of wages, those who make 106k or less/ and/or do not derive their income or part therof from investments already pay a higher percenateg of tax. Even though this is at the state level, it is basically capturing back ofr the State some of the tax disparity created by the federal system which taxes the wealthiest individuals at a lower over all effective rate.
So as we listen to cries for a fair system that treats everyone the same, lets remeber that wealthy individuals have access to different tax rates and tax breaks which reduce their overall taxable income below that of the middle class… if we want true tax parity we need to increase the state income tax to try and get wealthy illinoisans up to the total tax burden paid by the middle class.
Comment by Ghost Monday, Jul 22, 13 @ 11:57 am
Yes. Illinois needs a modern tax system to match its modern economy. An annual income of $1 million is an almost unfathomable amount of money for most of us. 11% plus whatever federal rate is charged, could result in an income tax bill of close to 50%. Is that confiscatory or fair?
I do not think a graduated state income tax will create a disincentive to work for those earning $1 million plus in annual income. I suspect they’ll find a way to muddle through life somehow.
We have to address the inequality problem that is creating two different Americas. This is a fair way to raise more revenue. If this ever gets to the voters to approve as an Amendment, I think it’ll fly right through.
Comment by 47th Ward Monday, Jul 22, 13 @ 11:58 am
I’d be more inclined to vote yes if it were paired with more flexibility in managing public pension systems.
Comment by grand old partisan Monday, Jul 22, 13 @ 11:59 am
eventually, a pension bill will be approved. And then it’s on to a prolonged battle over the income tax hike. It’s coming. Might as well get the ball rolling on different solutions.
Comment by horse w/ no name Monday, Jul 22, 13 @ 12:01 pm
It’s time for Illinois to join the large share of states that have an income tax that also have a progressive tax. It needs to be coupled, somehow, with spending controls as well. Our General Assembly has proven time and again that it will spend everything it gets without attention to its overdue bills or pension liabilities. I’ll gladly pay more, but only IF the money will be restricted to resolving the state’s debts.
Comment by Opa Monday, Jul 22, 13 @ 12:04 pm
I see our state’s fiscal problems as a result of taxes that are historically and currently much lower than other comparably wealthy states like NY and California. The state must not diminish pensions. Moodys and other bond rating firms dont care if deficits are fixed by reneging on pensions or by raising taxes. Either will do the job.
There is a contract with constitutional protection to fulfill pension obligations, but there is neither a contract or constitutional right to let the wealthy keep getting richer by squeezing the middle class.
Comment by cod Monday, Jul 22, 13 @ 12:07 pm
If we must have an income tax, I am a fan of a flat tax. Each of us has the same accessibility to state services, and so each of us should be paying a proportionate amount
Comment by Fan of the Game Monday, Jul 22, 13 @ 12:08 pm
==Yes. Illinois needs a modern tax system to match its modern economy. An annual income of $1 million is an almost unfathomable amount of money for most of us. 11% plus whatever federal rate is charged, could result in an income tax bill of close to 50%. Is that confiscatory or fair?==
Considering federal rates on such an amount of money were once 80 and above 90 percent, 50% of marginal above $1 million sounds mighty fair, especially if you consider all the tax avoidance schemes the rich can afford to engage in that little people cannot.
Comment by Precinct Captain Monday, Jul 22, 13 @ 12:08 pm
I voted yes. A graduated income tax is a fair income tax that relies on income that would otherwise not be spent. Since the graduated tax being proposed would actually give a tax cut to those with lower incomes, and since those at a lower income level will spend that tax cut as opposed to just adding to their net worth as do those with higher income rates, it will be a boon to the Illinois economy. Put it on the ballot. Debate the merits. Let the public vote. Illinois is in the severe minority when it comes to its regressive flat tax, and that flat tax is the main reason that Illinois was hit hard by the recession that hit the middle class the hardest.
Comment by PublicServant Monday, Jul 22, 13 @ 12:10 pm
I’m like Cynic in my taxes will go up under a graduated state income tax but it’s still the most fair thing to do.
Comment by Chavez-respecting Obamist Monday, Jul 22, 13 @ 12:12 pm
cod moodys and other bond rating firms have nothing to do with the States fiscal outlook, they give higher ratings to canadian cities with a muche worse fiscal picture; and to companies with a lot worse debt to income ratios.
Comment by Ghost Monday, Jul 22, 13 @ 12:12 pm
I voted yes, but I would feel better about it if I believed that the money would be managed responsibly. I haven’t seen that happen, yet.
Comment by Aldyth Monday, Jul 22, 13 @ 12:15 pm
Their dangerous assumption is that the high earners won’t move. I personally do know of high earners who have already established residence (>50% of time) in Florida to avoid state taxes here. Increasing the tax rate will also increase the incentive for others to do likewise. I’m not sure that Illinois has much to hold someone who has the means and ability to live elsewhere. Some would undoubtedly stay; so I can’t simply say a smaller percentage of something is a lot more than a higher percentage of nothing; but the higher percentage may not result in more revenues if it is on less people.
Comment by Logic not emotion Monday, Jul 22, 13 @ 12:16 pm
I voted yes simply because i believe that the progressive tax is fairer. When i say fairer, i mean it is more distributive, and I dont mind if you call me a socialist.
Comment by anon Monday, Jul 22, 13 @ 12:18 pm
I voted yes with reservations. Illinois needs more revenue and this is the fairest way to raise it. But I’m worried that, given a new bucket of cash, just like in 1971 - 1973 the General Assembly will go on a spending spree instead of paying down bills and funding pensions.
It would be a better proposal if the change included requirements that (1) the actuarial pension fund payments be paid, (2) the structural backlogs be paid, and (3) growth of the State budget outside those items be limited to CPI or less. Once all that is met, then and ONLY THEN, could the State start new progams or grow beyond CPI.
Comment by RNUG Monday, Jul 22, 13 @ 12:19 pm
I voted yes. It’s fair to have those with higher incomes pay a larger share of taxes.
==Because it sure hasn’t gone to paying our bills. ==
Um, yeah it has. What do you think the bill backlog would have been without the tax increase? And as Rich pointed out, they are paying the full pension payment now. Do you not consider that paying a bill?
==What % of income should all levels of government be entitled to?==
I don’t know. Why don’t you tell us? Illinois doesn’t have enough revenue to pay even the most basic obligations so I would say it needs more revenue from somewhere, along with more cuts (though I’m not sure where you are going to get big cuts without decimating some basic services). A flat tax just doesn’t cut it from a fairness standpoint. 5% on somebody who doesn’t make a lot of money is a far greater burden than 5% on somebody making $500,000.
Comment by Demoralized Monday, Jul 22, 13 @ 12:20 pm
@PC
—
Considering federal rates on such an amount of money were once 80 and above 90
—
What most who quote that rate fail to understand is no one paid that rate. 90%? everything was a write off, shoes, asprin, etc.
No one would work for a dollar (even if it was their 1 millionth) if the government for took 90% of it.
Comment by RonOglesby Monday, Jul 22, 13 @ 12:23 pm
Adding … IMO, the bill will need the guarentees I listed above to get past the voters who feel they were fooled by / lied to re the temporary income tax increase.
Comment by RNUG Monday, Jul 22, 13 @ 12:23 pm
Why do liberals continue to promote this concept of the evil rich, and that we need to stick it to them to make things fair? How about a flat tax on everyone with no special breaks for anyone. If the wealthy get breaks for things like interest, then go after the breaks, don’t increase the taxes.
And this idea that a tax has to be graduated to be fair is not based on logic. Lets do some math. 5% of $100,000 is $5,000. 5% of $10,000 is $500. So in this example, the wealthier person DOES pay 10 times more already. So tell me again why that’s unfair and it needs to be even higher to be fair? If anything, it’s unfair to the wealthier person. Is that person getting 10 times the return on investment in terms of public services from the their state? So please quit saying it’s not fair unless it’s graduated.
And of course, to talk about tax increases keeps ignoring the fact that we have a spending problem, not a revenue problem. I don’t get to go to my employer and demand a pay increase just because I want to spend more money. I have to live within my means. Why should any government be different? When is enough enough? Why can’t we just pick a number, say 5%, for example, and say that’s a fair rate for a state to collect, instead of constantly increasing the number so that politicians can keep making promises so they can keep getting re-elected?
Comment by flat-taxer Monday, Jul 22, 13 @ 12:24 pm
-Demoralized-
Would you say an 11% state income tax top rate, plus FICA , plus 42% marginal tax rate, plus high property taxes is a good deal for the self-employed??? Just a reminder: California does have much better weather so they can get away with much more.
Comment by Steve Monday, Jul 22, 13 @ 12:25 pm
No. Not unless a school funding scheme is devised first or made part of the amendment to remove most of the cost off of residential property owners. If a fixed income tax rate is regressive, what is the property tax?
Also, a progressive tax scheme creates a whole new world of regulations. I lack the confidence in the current legislature to even handedly legislate a new tax code.
Also, I need to see far reaching public pension reform. I don’t go for the “it’s the fault of government for not funding” argument. First, I have’nt seen numbers presented by a third party to back this claim. Second, I wonder how much sooner government services would have deteriorated if state, county and local governments had funded pensions all along. Third, gov employee pensions have created a fundamentally unfair situation in Illinois and other states where struggling provate sector employees, with no retirement security, are forced to subsidize a political class retirement security in a style unavailable to them in the market at a cost they could afford.
Absent funamental changes in the afore-mentioned areas, this smells like a money grab.
Comment by Cook County Commoner Monday, Jul 22, 13 @ 12:26 pm
Logic not Emotion,
IDOR has some formulas that take, among other things, revenue flight and straight tax avoidance / evasion, they use when doing projections. Most the numbers being thrown around in the newspaper reports are from the Martire proposal, and those numbers were generated by Martire working with IDOR.
Comment by RNUG Monday, Jul 22, 13 @ 12:26 pm
A graduated state income tax is the most fair way to raise the revenue needed to bring fiscal solvency back to Illinois government. This shared sacrifice also needs to include a graduated state income tax for retirement income.
Comment by Ruby Monday, Jul 22, 13 @ 12:28 pm
flat-taxer,
Go study the Matire report and then come back and identify what spending you would cut. There ain’t really much of anything left in the State budget to cut. Illinois has a revenue problem …
Comment by RNUG Monday, Jul 22, 13 @ 12:29 pm
We voted yes just to drive the whack jobs nuts…
btw Chase is about to pay a $400 million fine for crooked energy trades in CA a few years back..that is the same JP Morgan Chase that …..
Comment by CircularFiringSquad Monday, Jul 22, 13 @ 12:32 pm
@Steve:
The question wasn’t what the rate should be, it was whether there should be a constitutional referendum to approve a graduated income tax. I said yes. I don’t know what the top rate should be. You don’t have to agree with it but my opinion is, and will remain, that a graduated tax is far more fair than a flat tax.
Comment by Demoralized Monday, Jul 22, 13 @ 12:33 pm
Yes, definitely. The dramatic reduction in taxes for the wealthy that dates from the Reagan era has left us with a shrinking middle class, a concentration of wealth in the hands of fewer and fewer people, and periodic government budget crises. When our income tax rates were far more progressive in the 1950s, the economy boomed and the middle class grew. It’s past time to try that again.
Comment by OldSmoky2 Monday, Jul 22, 13 @ 12:34 pm
@flat taxer:
That $500 on the person making $10,000 a year is FAR MORE onerous than the $5,000 on the person making $100,000 a year. It’s not a hard concept to understand.
And I would love to see you list of cuts. I’m not talking about the pork and other ridiculous stuff that we all agree on. I’m talking about cuts to programs where you would actually get money. How exactly would you solve our “spending problem?” People love to say cut, cut, cut but rarely say how they would accomplish it.
Comment by Demoralized Monday, Jul 22, 13 @ 12:36 pm
I have nothing against rich people per se, but Illinois desperately needs more revenue to pay its contractual obligations and that is where the money is, at least up to a point. Obviously, if you make the income tax rate too high it may become counterproductive, but I seriously doubt that anything up to around 10% would not generate substantial incremental revenue gains even if some of those affected move out of state.
Comment by Andrew Szakmary Monday, Jul 22, 13 @ 12:41 pm
I voted yes but I’d also be in favor of increasing the rate and the personal exemption to accomplish a similar result. For instance, a $50k four person household gets an 8k exemption so owes 5% on $42k or $2100. You could increase the rate to 10% and exemption to $7.5k per person which would yield a tax of $2000 while generating far more income on the wealthy. This can be done with a simple majority and no constitutional amendment, I believe.
Another option would be a net worth tax instead of or in addition to an income tax. Or a more broad sales tax with a flat rate combined with a flat refund each year (say 10% sales tax rate with a $100 per person per month refund).
Comment by thechampaignlife Monday, Jul 22, 13 @ 12:42 pm
I voted yes. Mr. Martire was kind enough to participate in a forum my former union local endorsed earlier this month. He gave an interesting and informative CTBA budget presentation. I learned what is Illinois’ structural budget deficit, and how a progressive income tax is a key component in correcting the problem.
Our state’s income tax is one of the lowest in the area, and the way income is distributed today, it’s only fair to raise taxes on the wealthiest residents. I have the CTBA budget presentation at home, and many workers’ income tax would actually decrease. Wealth today is highly concentrated at the top, and that’s where to go to get revenue.
Comment by Grandson of Man Monday, Jul 22, 13 @ 12:44 pm
@Demo… I think anywhere near 50% is sick.
Smaller tax bases (5% or 10 or 20% of a population paying for services 100% use) are showing problems all over. Thats the reason VAT taxes are big in Europe because they DO have hugely progressive income taxes and it doesnt work out so well.
lets say you are a top income bracket (over 150 or 250 or whatever ugly line someone draws). And you hit the 39, 40% federal range. Of course you also have a 6.25% social security (if self employed like I have had to payer its 12.5%) add in a local income tax of 5% or take it to 10 or 11 like NY, NJ, CA, etc. and not even counting property taxes you could easily get up to 50%.
Fair? Set a flat tax. no deductions. Then draw a line like 15 or 20K and below that No income tax. Above that a flat rate (whatever that needs to be). Someone making 35k with a 20K poverty line and a 10% income tax pays what? $1500. Someone with 150K and the same line pays 13,000… plenty fair to me.
But the problem is it doesnt allow politicians to carve out special rules for the RICH and for the poor… our current system sticks the middle. sorry, thats the truth.
Comment by RonOglesby Monday, Jul 22, 13 @ 12:46 pm
No.
Not without comprehensive, broader-scale reform.
If a flat income tax is considered regressive (which it is), then so is everything else from a flat sales tax to a flat car sticker tax.
Comment by Formerly Known As... Monday, Jul 22, 13 @ 12:53 pm
i voted no, I think we need to look at reforming our sales tax system before looking into a progressive tax. I believe applying sales tax to services (and lowering the sales tax) will essentially do what progressive tax would do, which is bring in new revenue and have rich people pay more.
Additionally, I don’t trust the legislature to create a “common-sense” progressive tax, I see them doing something stupid like creating a top tier of 11% and chasing rich people (wealth and tax dollars) out of Illinois.
Comment by Ahoy! Monday, Jul 22, 13 @ 12:56 pm
This would help Illinois become less of a regressive tax State. An over-reliance on local property taxes to fund education and a flat income tax cause Illinois to be extremely regressive in taxation methods. An ability to pay should be a determining factor in all taxation related changes to how Illinois gets its revenure.
Comment by anonymous Monday, Jul 22, 13 @ 12:57 pm
NO- First, why would I trust the same politicians who passed the “temporary” income tax to pay off the bills with making up fair tax brackets… and why would I give them anymore of my money?
Also, this would give IL the highest corporate income tax in the nation when the PPRT is included. That hardly seems to be the way to lower our second-highest in the nation unemployment.
Finally, if you follow CTBA’s rates, marginal tax rates would be higher for everyone making over $5000/ year. 5% is higher than 3.75% Do they really expect us to believe that 94% of taxpayers will receive a tax cut, but the state will take in billions in more revenue?!!
Comment by JOC Monday, Jul 22, 13 @ 12:58 pm
I voted NO. I was told there is a problem with opening up the Constitution. What is to stop them from changing other parts of the Constitution while they are there? If they can only change the income tax, I see no problem. This may or may not be true, I don’t know. But if it is, you may be opening up Pandora’s box.
Comment by Mix-It-Up Monday, Jul 22, 13 @ 1:05 pm
Yes, given that at least currently Detroit’s bankruptcy is unconstitutional in Mich. because of pension obligations and we have a similar clause in our constitution. A graduated tax may be the only route to funding the pension obligation that the state has accrued.
Comment by Jack Monday, Jul 22, 13 @ 1:09 pm
Not without a guarantee that retirement income, pensions, and social security will not be taxed. I do not trust Illinois state government to make things better, only worse!
Comment by Anonymous Monday, Jul 22, 13 @ 1:16 pm
I voted NO on the constitutional amendment to move to a graduated income tax structure. My concern, and it may well be unfounded, is that it would be a very tempting opportunity to change or eliminate the constitutional protection to retirees. Sorry, I’m too close to take chances with legislators with agendas.
Comment by Very Anon Monday, Jul 22, 13 @ 1:17 pm
*I was told there is a problem with opening up the Constitution. What is to stop them from changing other parts of the Constitution while they are there?*
*My concern, and it may well be unfounded, is that it would be a very tempting opportunity to change or eliminate the constitutional protection to retirees.*
Stop. Just stop. This proposal changes one specific element of the constitution. The language is spelled out. No more, no less. This is not a constitutional convention. Stop the rumor mongering. Stop.
Comment by Montrose Monday, Jul 22, 13 @ 1:23 pm
Currently, for someone in Illinois with $20,000 of taxable income, they will pay 5% or $1000 for Illinois state income tax, and have $19,000 leftover to live on and to pay their federal taxes, etc. That $1000 in taxes takes a major bite out of their ability to put food on the table, pay for their housing, etc.
Someone with $150,000 of taxable income will pay $7500 in Illinois income taxes and have $142,500 to live on. They might have to skip a new car every year.
Comment by Joe M Monday, Jul 22, 13 @ 1:28 pm
=== This proposal changes one specific element of the constitution. The language is spelled out. No more, no less. This is not a constitutional convention. Stop the rumor mongering. Stop. ===
I don’t know that they were claiming this is a constitutional convention.
It seems the implication and cause of concern focused moreso on the fact that this sets a dangerous precedent in their eyes.
Change the Constitution a first time, it becomes that much easier and accepted to change it a second time, third time, fourth time, etc.
Comment by Formerly Known As... Monday, Jul 22, 13 @ 1:37 pm
Not without a minimum tax that everyone must pay (say the pre-increase 3% rate), not without an amendment to the Constitutional provision protecting pensions, and not without an 8/5 ratio for corporate taxes tied to the median nominal rate in the progressive schedule.
Comment by Alexander Cut the Knot Monday, Jul 22, 13 @ 1:37 pm
LOL, or perhaps one of Illinois’ infamous shell bills.
“Yeah, so we’re going to amend the Constitution to enable a graduated income tax.
Surprise! We’re swapping out some of the language on the last day to also restrict and diminish pension benefits!
You know, just part of the legislative sausage-making and all that.”
Comment by Formerly Known As... Monday, Jul 22, 13 @ 1:40 pm
When comparing the three economic factors of economic growth per capita — median household income — and the average unemployment rate, the nine states with the highest state income tax rates have often outperformed and at least did as well as the nine states with no income tax.
States have to keep their bills paid and invest in education, infrastructure, services, and safety if they want their state’s economy to thrive.
Comment by Joe M Monday, Jul 22, 13 @ 1:43 pm
Yes. It’s really pretty simple — if you don’t have the money, you can’t pay the bills. Illinois has had a structural deficit for years, and a graduated income tax would bring in revenue from those who are best able to pony up.
Comment by olddog Monday, Jul 22, 13 @ 1:44 pm
For the record, RonOglesby’s proposal at 12:46 is a graduated income tax plan. Admittedly, it only has two brackets…
In all seriousness, if it is ok to have two brackets, where the lowest income benefit from lower (or zero) rates, then it rings hollow to say that differences in upper rates should not be allowed. If it’s unfair in general, it’s unfair to make any exceptions.
I vote yes because I think it IS fair to have different rates. Progressive increases all the way up make sense. Richer residents may benefit the “same” from their local garbage services, but they also get the added benefit of access to legislators. I mean, just by definition a person with higher income is benefiting more from living here than someone making less.
Comment by For the Record Monday, Jul 22, 13 @ 1:50 pm
Well, if the Democratic nominee for guv gets behind this and the Repub nominee doesn’t, that should make for an interesting debate. But will either nominee want to take the risk? Especially since if the Democrats try and it doesn’t pass, they could not only lose votes but also the opportunity to try again in the near future.
Maybe a promise that they’ll only do a millionaire’s tax once the constitution is changed, plus an expanded earned income credit. But who would believe them? And despite all the talk about millionaires, the middle class is probably where the money is.
I voted yes but with reservations, as I share RNUG’s concerns about what our Illinois pols might do with a pile of “extra” cash.
Comment by Cassandra Monday, Jul 22, 13 @ 1:56 pm
I’ve had good years and I’ve had bad years.
In the good years, I would be OK paying a higher percentage of income in tax. When I was over $300,000, I could afford to pay a higher percentage than when I had some tough years.
This assumes of course that the brackets will be similar to the feds.
Knowing Chicago Dems, I could of course imagine them making the top bracket at $75,000 or something. If they put the top bracket too low, it would be nothing more than a tax increase on most people.
Comment by VonKlutzenplatz Monday, Jul 22, 13 @ 1:56 pm
@for the record
—
I mean, just by definition a person with higher income is benefiting more from living here than someone making less.
—
Uh… I dont think that is the case. Are you saying that I benefit more from living in Illinois than someone that makes less than I do. From the mere fact of just being in Illinois? I pay taxes for programs that I cannot access (program for the poor/ less well off).
They can use the same street, garbage services, police and fire services, court system, etc that I do.
Fair as defined here is a feeling. If you took 10 people in your neighborhood and said “we are all going to show our 1040’s and those with more pay more in association dues and the bottom 3 will pay nothing” I think you might get a bit out of whack on that.
I believe we can have a safety net. But I also believe that there is no unlimited pool of money and taxing 5% of the population and reducing taxes for 95% has nothing to do with “fair” Its like a football game where the Browns play New England and you by default the browns get 7 points per TD and NE gets 2…
if you make 20K you should pay less… but it shouldnt be nothing. and if you make 100k it should be 5x what the 20k paid.
Comment by RonOglesby Monday, Jul 22, 13 @ 2:08 pm
A conditional “no” for now. Giving this or any recent General Assembly the power to play even more shell games with tax rates lands somewhere between scary and horrifying. I’m sure it will raise more revenue until it doesn’t raise enough and we’re far past the top 2% or so. If it goes the Fed route, you’ll eventually have a similar grid with some lower wage earners paying no state income tax. Significant reforms and behavior could influence my support, but until then; I’m a no.
Comment by A guy... Monday, Jul 22, 13 @ 2:11 pm
Any Constitutional amendment presented to the voters in a referendum has to (a) already been passed by the General Assembly and (b) spell out the exact language in the bill. The actual ballot entry can have a summary, but the complete language will be known before the public gets a chance to vote on it. Previously, such referenda have been both published in the newspapers and mailed to every registered voter.
And yes, just removing the flat income tax provision and replacing it with language for a progressive income tax may allow the brackets / rates to be changed, it doesn’t permit any OTHER changes to the State Constitution UNLESS those changes are also in the language presented to the voters.
Comment by RNUG Monday, Jul 22, 13 @ 2:13 pm
This would be Obama v. Romney, Act II. They’ll demonize success and argue the “fair share” issue.
We were sold a bill of goods with the income tax increase. Told that it would (1) eliminate the state debt, (2) reduce pension debt, and (3) be temporary.
They’ve raised $15 billion in two years. During that time, pension debt has grown by 33 percent and our state debt remains.
All of the normal tax eaters will be supportive. Taxpayers and fiscal conservatives will oppose.
Comment by 1776 Monday, Jul 22, 13 @ 2:14 pm
Formerly Knows As…
A) The slippery slope argument gets you no where.
B) I suggest that you and others read the specific process for amending the Illinois constitution.
Comment by Montrose Monday, Jul 22, 13 @ 2:16 pm
Montrose
A.) No slippery slope argument being made by me. Just my interpretation of their comments, as noted in my comment.
B.) I suggest you read the “LOL” in capital letters that preceded my comment.
It is common knowledge that proposed amendments to the Constitution must be approved via legislation and then ballot measure or take place at a Constitutional Convention, etc.
I don’t know how replacing the language on a shell bill could possibly work in this scenario, since it must go to the voters. It makes no sense. Thus the LOL reference.
Comment by Formerly Known As... Monday, Jul 22, 13 @ 2:42 pm
I voted, yes. Cynically, I would love to see the democrats explain why the wealthiest people are leaving the state, after a progressive income tax is put in place. Folks, Illinois isn’t California, with its beautiful coast, mountains and climate.
Comment by Downstater Monday, Jul 22, 13 @ 2:43 pm
No, no, and no. Isn’t the definition of insanity doing the same thing over and over and expecting a different result ? In this case, giving the GA more tax money, expecting it to spend it in a responsible manner ? Make an HONEST effort to eliminate waste, and implement some form of zero-based budgeting, and you will find that any form of tax increase is no longer necessary.
We do need to amend the Illinois constitution, we need to remove those ridiculous pension and benefit guarantees that are the root cause of this problem.
Comment by boog Monday, Jul 22, 13 @ 2:44 pm
Yes, let’s drive more of the successful people from Illinois.
That’s a good idea!
And to those who falsely say there is no waste left to cut in state budget, let me give you one example.
Illinois is about to launch a second multi-million dollar “weatherization” program. The first one came from stimulus funds and was deemed by a federal audit to be a complete waste of money, riddled with fraud.
So what does the bankrupt state of Illinois do? It starts another boondoggle.
Spare me the crocodile tears about lean state government.
Illinois is headed toward financial ruin because of overspending. Detroit just got there first.
Comment by BuzzKill Monday, Jul 22, 13 @ 2:46 pm
@BuzzKill:
I don’t think anybody would say that there is nothing to cut. What I would say, however, is that there is nothing that will save you any significant amount of money left to cut without completely devastating some major program. If you are OK with that, then that’s fine. Tell us which of those major programs you would cut.
Comment by Demoralized Monday, Jul 22, 13 @ 2:53 pm
I suspect that most people claiming that if we have a graduated income tax high income people will leave are not at risk for paying the top rate.
Personally, if my income gets back high enough that I would qualify for a top rate — assuming as noted before that the top rate is similar to the feds — I will be pretty pleased and more inclined to stay.
When business is good, I’m not packing up to leave because of an extra percentage point or two on the income tax.
There are political reasons I might decide to leave — generally fed up with the fact that IL continues to perform worse than other states — but paying a bit more if I do well would not make that list.
Comment by VonKlutzenplatz Monday, Jul 22, 13 @ 2:53 pm
And enough with the Detroit comparisons. For a while it was the asinine comparisons to Greece and now the Detroit drumbeat is starting.
Comment by Demoralized Monday, Jul 22, 13 @ 2:55 pm
According to CoGFA estimates, the tax increase was projected to generate:
FY2011: $2.409 Billion additional net revenue
FY2012: $7.669 Billion additional net revenue
FY2013: $7.465 Billion additional net revenue
FY2014: $7.695 Billion additional net revenue
That is $25.238 Billion in addditional net revenue due to the recent tax increase.
And Illinois has paid down how much of our bill backlog since the tax hike? Roughly $2 billion?
Our esteemed leaders have not earned the trust to further amend our tax code.
Comment by Formerly Known As... Monday, Jul 22, 13 @ 2:55 pm
@Formerly:
You are completely failing to take into account what the bill backlog WOULD HAVE BEEN if the tax increase had not passed. At least be honest in your assessment.
Comment by Demoralized Monday, Jul 22, 13 @ 2:57 pm
@Formerly:
You have also failed to take into account that full pension payments are now being made.
Comment by Demoralized Monday, Jul 22, 13 @ 2:58 pm
Yes. A progressive replacement to the current regressive system is Illinois’ only hope to get out of the current tax death spiral that we are in, for most of the good reasons I see already posted below. It’s been proven over and over that the economy depends upon the masses living paycheck to paycheck on spending that money, not by shifting it to the wealthy, through tax regression or otherwise. Put a progressive system in place for individuals and for businesses.
Comment by Frank P Monday, Jul 22, 13 @ 3:01 pm
Assuming a modest (say 2%) growth, when does additional revenue meet the obligations curve? Perhaps we can bridge the gap by increasing revenues through pro-growth policies and attracting new businesses? And remember, Illinois does not tax pensions, while taxing unemployment insurance payments.
Comment by Cincinnatus Monday, Jul 22, 13 @ 3:06 pm
No way. The lies are just to many. I will veto any increase over 4%. Or the whopper it’s a temporary tax increase. All the current leadership does is lie to the tax payers. They cannot be trusted with more money. Pass a gambling bill if you want some cash. Improve business conditions by fixing workers comp. don’t make Illinois less competitive.
Comment by Fed up Monday, Jul 22, 13 @ 3:10 pm
@demoralized
You appear to be asserting that essentially the entire amount of new revenue from the tax hike is going to make increased pension payments.
That is blatantly, laughably and demonstrably false.
At least be honest in your assertions when accusing others of being dishonest about theirs.
Comment by Formerly Known As... Monday, Jul 22, 13 @ 3:11 pm
Apparently Rich has a lot of millionaires reading the blog. Maybe he should consider a graduated subscription rate.
Comment by 47th Ward Monday, Jul 22, 13 @ 3:15 pm
This is an indispensable ground-level step in stimulating business, prosperity and economic growth in Illinois.
Comment by taxpayer in Illinois Monday, Jul 22, 13 @ 3:16 pm
Illinois cannot provide necessary services without taxpayer participation. I value safety, education, environment, thriving economy, up to date infrastructure, and other areas where government focuses on residents and their needs rather than relying on businesses to determine our fate. Increased taxation is long overdue and I need to pay my share!!!
Comment by mollysmom223 Monday, Jul 22, 13 @ 3:32 pm
==It’s been proven over and over that the economy depends upon the masses living paycheck to paycheck on spending that money, not by shifting it to the wealthy, through tax regression or otherwise.==
@Frank P. I don’t see the state reducing the tax rate on anyone, only increasing it for some. How will increasing the income tax rate on wealthy people give the “masses” more money to spend?
Comment by Fan of the Game Monday, Jul 22, 13 @ 3:35 pm
47th,
maybe we arent millionaires. maybe some of us see policies that hurt even those that aren’t millionaires. I know politicians like to say “millionaires and billionaires” but then their hikes start at like 100k or 150… sorry. that is not a millionaire.
Comment by RonOglesby Monday, Jul 22, 13 @ 3:35 pm
No problem with a progressive tax especially if coupled with full tax reform. Let’s shift some of the cost burden for education from the property taxes. Many people have to set aside each month for taxes almost as much as more than their monthly mortgage payment.
Comment by illinifan Monday, Jul 22, 13 @ 3:40 pm
Yes. At the risk of sounding unoriginal, it’s a revenue problem. I think the hardest part of selling a change in taxes is explaining the math.
Comment by Earnest Monday, Jul 22, 13 @ 3:49 pm
The citizens will fear that the graduated income tax is intended to cover the pension problem. So state govt. has to “correct” its pension problems before going to the public for a graduated income tax.
And seniors should pay taxes - there is an Il. Dept on Aging, among other services and programs targeted at seniors and grandparents. Seniors are also one of the fastest growing segments of our society — myself included.
A graduated income tax, taxing seniors, and expanding the sales tax onto many more services as a user fee ( as most states do - Illinois is fourth from the bottom on sales tax applied to services) will go a long way towards modernizing our revenues system to reflect our current economy and society.
Comment by Capitol View Monday, Jul 22, 13 @ 3:50 pm
@VonKlutzenplatz
I am at risk of paying more… The temporary increase that is going to turn permanent was one step and another increase will speed my move out. Right now a home similar to mine is about 20% less in property taxes and I will get about 5% raise just not being in Illinois. The school district is top rated… What keeps me here? Family. that’s it. I’m in Tech. I can work anywhere.
All else being equal I would maybe stay in Illinois. But the state’s future looks ugly, the current political class doesnt change yet every year says they are saying they can fix the problem..
As to those that push detroit vs Illinois. City vs State. City dependent on a small specific business, vs an entire state.
That said the only valid comparison is the state constitutional similarities. One thing those suing to stop bankruptcy of the city will learn (and Illinois may learn) is the government can pass a law or change the constitution to require every citizen get a new car and a free house, but if they dont have the money what happens? no new car. No free house, no matter what they promised.
Comment by RonOglesby Monday, Jul 22, 13 @ 3:51 pm
Perhaps the graduated tax amendment should include a provision that any increase in any of the income rates or brackets must go out for binding referendum. That would at least quell the fear of the unknown and slippery slope arguments.
Comment by thechampaignlife Monday, Jul 22, 13 @ 3:57 pm
What a marvelous idea. Tax hike amendment goes on the ballot in November. Angry, unhappy voters, state employees, unions, etc. send it down in flames along with Daley or Quinn. Madigan once again reigns as the undisputed most powerful Democrat in Illinois.
Comment by Anonymous Monday, Jul 22, 13 @ 4:04 pm
== each of us should be paying a proportionate amount ==
The IL state and local tax system is highly regressive. It imposes a much higher effective rate on those with the least income. Does that bother you or not? Or is it just when those with the greatest ability to pay are asked to do more that it’s unfair?
Comment by reformer Monday, Jul 22, 13 @ 4:07 pm
== we have a spending problem, not a revenue problem ==
Illinois is consistently among the lowest spending states, on either a per capita basis or as a percent of state GDP. For example, we rank 50th in the number of state employees per capita.
If you really believe everyone should pay the same share of their income in taxes, then you should be livid about the status quo in Illinois, where the effective tax rate (of all state and local taxes/fees) on the bottom 20% is three times higher than on those in the top 1%. Does your principle apply when taxes are regressive, or only when they’re progressive?
Comment by reformer Monday, Jul 22, 13 @ 4:16 pm
yes please. This is a fair way to deal with Illinois’ revenue problem.
Comment by davidh Monday, Jul 22, 13 @ 4:21 pm
the poor get poorer and the rich get richer. It is way past time for the rich to pay their fair share.
Comment by Me Monday, Jul 22, 13 @ 4:29 pm
I believe that “to whom much is given”, much should be expected. Therefore, the wealthy should feel good about paying a higher tax rate.
Comment by Gwen Monday, Jul 22, 13 @ 4:40 pm
I think that why should us poor and the middle class people keep suffering paying our hard earned money and the rich can enjoy theirs. Its time to be fair and let the rich pay their taxes as well.
Comment by shay Mac Monday, Jul 22, 13 @ 4:43 pm
@Formerly:
That is NOT AT ALL what I said. Try reading it again. I said that was PART OF IT. Reading comprehension is a wonderful thing.
Comment by Demoralized Monday, Jul 22, 13 @ 4:54 pm
It is way past time to get smart in Illinois. Right now we tax our poverty instead of our wealth. Dumbest - policy - ever. If we could only be smart about how we fix it - but no - the power struggles will have the rhetoric turned up to deafening - UGH
Comment by collar observer Monday, Jul 22, 13 @ 4:54 pm
== Is the property tax regressive? ==
Indubitably. It’s not based upon current income and ability to pay. In addition, property owners get a deduction on their income taxes for property taxes, while renters don’t, even though their rent reflects property taxes.
== the rich will move ==
Four of the five contiguous states to IL have a higher top income tax rate than we do. (IA,WI,KY,MO), while the fifth (IN) lets counties impose their own income tax. I haven’t heard that all the rich people have moved out of all those other states.
Comment by reformer Monday, Jul 22, 13 @ 5:06 pm
Adam Smith, “the Father of Capitalism,” favored a graduated tax.
Comment by reformer Monday, Jul 22, 13 @ 5:08 pm
Additionally, the last several sets of tax increases (Alcohol, tobacco, gambling, income tax) have NOT generated the amounts of revenues promised nor have they solved the problems that they were intended to solve.
You want to cut spending? Let’s start with our $100 Billion pension problem. Let’s do a little back of the envelope calculation.
Currently, you take +/- 10% of a worker’s pay for let’s say 30 years. So that nets out to 300% of a worker’s pay. That is good for 3 years of retirement pay. The State lets a worker retire at 55 and they have a payment for life. The average age has been extended from 65 when this started to now it is 80.
Bottom line is this. You have saved enough for paying this person for about 3 years and they are living for about 25 years. You have a 22 year funding gap for EVERY state worker that gets a pension.
You have to get rid of the defined benefit model!! Switch to a defined contribution model. Large businesses the size of the State of Illinois that have switched to this model have thrived. Those that have not switched have gone bankrupt. (aka General Motors)
Our Legislators have written checks that we cannot cash. The sad thing is that the Legislators are beneficiaries of this system and we the taxpayers are left holding the bag.
Comment by BIG R. Ph. Monday, Jul 22, 13 @ 5:11 pm
Yes.
Just as research has shown that raising the minimum wage does not lead to mass unemployment, despite the Doomsday predictions of employers, raising the income tax does not lead to wealth flight.
The key is to ensure revenues are well invested in efforts that deliver measurable results, like improving our public schools. There are nearly 70,000 millionaires in Chicago alone; unlike Bruce Rauner, they can’t ALL get their kids clouted into a magnate school.
Comment by Juvenal Monday, Jul 22, 13 @ 5:17 pm
Yes it is a fair way to deal with Illinois
revenue problem.
Comment by la lizzard Monday, Jul 22, 13 @ 5:19 pm
==You have to get rid of the defined benefit model!! Switch to a defined contribution model.==
You could do that for all new workers but you couldn’t do that for existing workers, at least for the benefits they have already earned. You would still have a defined benefit plan until every worker in the current system left employment.
Comment by Demoralized Monday, Jul 22, 13 @ 5:37 pm
a lot of junk on here today, huh? Since the state income tax is deductible from the federal one, the effective rate higher earners pay in state income taxes is overstated. Yes, people did in fact once pay marginal rates of 80 and 90% on marginal income, but even today the feds subsidize a substantial portion of the state income taxes upper income tax Illinoisans pay.
Deliberating and designing a major revamp of Illinois’ tax system is a much better use of time than quibbling over how much of the current tax surcharge should be extended, and for how long, and its the only real solution to the financial problem our state faces.
Comment by Steve schnorf Monday, Jul 22, 13 @ 5:37 pm
THE TAX SYSTEM SHOULD BE EQUAL FOR ALL STRAIGHT ACROSS THE BOARD.
Comment by ALICE Monday, Jul 22, 13 @ 5:52 pm
No way this would ever, ever happen. I’ll never forget the time I heard Paul Harvey say that democracy like this was comparable to the mob killing Jesus. This will never be allowed to happen by the politicos.
Comment by Flan Monday, Jul 22, 13 @ 5:54 pm
One scenario where it could happen would be if the courts shoot down any upcoming pension changes passed by the General Assembly as unconstitutional - which seems to be the way they are heading. Then the General Assembly will be forced to figure out ways to come up with the revenue they should have been generating all along.
Comment by Joe M Monday, Jul 22, 13 @ 7:05 pm
Given the regressive nature of sales taxes (in practice) it would make more sense to eliminate the sales tax, even if it means a higher income tax
Comment by reformedformerlibertarian Monday, Jul 22, 13 @ 7:23 pm
It should not be suprising that most commenters on this blog are in favor of raising taxes on someone else. I wonder how many of them are receiving some form of state benefits. If this issue becomes framed as necessary to pay pensions, I doubt that it will pass. And I’m reasonably certain that no one will feel good about paying higher taxes.
Comment by capncrunch Monday, Jul 22, 13 @ 7:43 pm
Steve, yes. But there have been a couple of good suggestions about caps / restrictions on any new spending before all the old bills, including pensions, are paid.
Comment by RNUG Monday, Jul 22, 13 @ 8:04 pm
I say no. Since Naomi left the house floor when the Illinois Teachers needed her most on the afternoon of the SB1/HR2404 (Excused) was debated and then back to the floor as soon as vote was taken, I can not agree with her on this tax increase. This was her biggest chance in 20 years to have help all of us; this one day we really needed her.
Comment by Big Jim Monday, Jul 22, 13 @ 8:05 pm
“Put it on the ballot. Debate the merits. Let the public vote.”
Hummmmm…..Will the 50%+ of the population that pays no income tax get to vote? Of course they will and of course they will vote to raise taxes on someone else. Not only do they pay no taxes but they get an earned income tax refund (payment).
The highest wage earners already pay the vast majority of the income taxes in this state. Why do they need to pay more? This foolishness is exactly why so many people moved out of New Jersey. Business people have been moving out of Illinois for the past four years, this will only speed things along.
Comment by Muffin Man Monday, Jul 22, 13 @ 8:18 pm
Yes. I believe that once our tax system is repaired, everyone would be able to maintain a suitable financial way of living. People will begin to abundantly enjoy the fruits of their labor.
Comment by Lola Monday, Jul 22, 13 @ 8:42 pm
Yes.
We all are responsible for what happens in our State. We are the “Government Body”,and we have to take better care of our Finances as a whole.
Comment by Chiquitabellumba'-Monday, Jul 22, 13@ Monday, Jul 22, 13 @ 8:52 pm
Capn,
I would suspect that well over 99% of us here have some form of state benefits.
For me, I often use roads. I also use the courthouses.
How about you, Capn? Are you living in a cave?
As I noted above, when there is a graduated income tax, I’m OK paying more. It means I’ve had a good year.
Comment by VonKlutzenplatz Monday, Jul 22, 13 @ 8:56 pm
VK, well said. I’ve often said I wished I paid a million dollars a year in income taxes.
Comment by Steve schnorf Monday, Jul 22, 13 @ 9:47 pm
@VonKlutzenplatz - I’ll second Steve Schnorf. Very well said.
I would also extend that to public safety departments (State Police), state schools, etc. and the many other public services which many of us like to avail ourselves.
Those things cost money, and it doesn’t fall from the sky.
Comment by Formerly Known As... Monday, Jul 22, 13 @ 9:55 pm
===I’m OK paying more. It means I’ve had a good year.===
I know I am all about the Reagan Rule of 80%, but I don’t know of many Republicans that is …”OK paying more.”
But, if we agree on 80% of the Republican Ideals, I guess its ok that you want to pay MORE in taxes …
To the Post,
“Should” the GA? I don’t think the GA needs to waste its time herding cats in the House to get the 3/5ths vote. Work on Pensions is probably a better use of time, then look at the budget with the likes of a - Steve schnorf - at the table, then get back to me on the “Should” a Constitutional Amendment and revamping the taxes paid bit.
Comment by Oswego Willy Monday, Jul 22, 13 @ 9:55 pm
@Demoralized
Much obliged. Appreciate you conceding that point and recognizing what the facts indicate - that the majority of the proceeds are clearly not going towards pension payments.
This now returns us to my original question:
Where is all that money going?
Because it’s sure not going towards paying down our bill backlog. And the majority of the proceeds clearly isn’t going towards pension payments or those (non-existent) bond payments.
P.S. - TYPING IN CAPS does not make your point more valid than typing in lowercase.
Comment by Formerly Known As... Monday, Jul 22, 13 @ 10:09 pm
We need a tax reform and also we need to be able to claim our kids even if they are 30 as long as they are in school and not working, my son is in his last year of University to become a Electrical Engineer and I can not claim him so I end up paying so much in taxes, I pay for his school supplies, boarding, bill gas everything. I am a single mother and we need insurance please
Comment by tita Monday, Jul 22, 13 @ 10:11 pm
I vote yes on the FAIR TAX, AND ALLOW US TO CLAIM OUR KIDS NO MATTER THEIR AGE AS LONG AS THEY ARE IN SCHOOL, IT TAKE A MAN TO THE AGE OF 27 TO FINISH THE UNIVERSITY, I pay for all his expenses and I am a single mother, I should be able to claim him on my taxes as a dependent and also be able to buy insurance with an existence illness I am diabetic and can not purchase insurance. Help us.
Comment by Nathalie Monday, Jul 22, 13 @ 10:14 pm
–Their dangerous assumption is that the high earners won’t move. I personally do know of high earners who have already established residence (>50% of time) in Florida to avoid state taxes here.–
Sure. Jimmmy John (maybe one day).
People who have lots of money live wherever they want.
I personally know that the richest people in the world like in Belgravia,London, Park Avenue, NYC, and Beverly Hills, LA. Is it for the low taxes?
Comment by wordslinger Monday, Jul 22, 13 @ 10:23 pm
OW,
Tax reform IS one of the few legal pension solutions.
Comment by RNUG Monday, Jul 22, 13 @ 10:30 pm
If our state is broke don’t you think this is a good way to help. They’re not going to even notice it ..they’re rich for gods sake!
Comment by travon martin#2 Monday, Jul 22, 13 @ 10:43 pm
- RNUG -,
I get it, but I am looking at this also as, “Can the House get a 3/5 vote passed on the Graduated Income Tax?”, and right now, I would have to say “no” the House can’t, so let’s try to get the very well respected - Steve schnorf -s in the room, and set the table ONCE to get this done, and not just think the Graduated Income Tax is the end-all, be-all, and force the issue of getting to 3/5ths unless all other avenues, including raising “revenue” (taxes) can be done without amending the Constitution …today.
Comment by Oswego Willy Monday, Jul 22, 13 @ 10:46 pm
BTW, what I really appeciate - RNUG -, is the fact you are pointing out that the Constitutional Amendment is one of the few legal ways …
Wish some of these “candidates” would realize that that pesky Constitution is a real barrier, not just a speed bump.
Thanks, - RNUG -, for looking at this realistically, no snark.
Comment by Oswego Willy Monday, Jul 22, 13 @ 10:48 pm
@ Word
—
I personally know that the richest people in the world like in Belgravia,London, Park Avenue, NYC, and Beverly Hills, LA. Is it for the low taxes?
—
See, there lies part of the problem you confuse the “Rich people” living on park avenue with who they actually tax. Sorry, you are not Paris Hilton if you make 150k in Chicago. Not near it.
And if you can live in Dallas or Austin or Nashville or something like that, get reduced property tax and income tax. those will move. I am one of them, as is my neighbor waiting for his contract to be up so he can move.
There aren’t enough Paris Hiltons to tax, thus why they draw the line at 150, and yes it does make a difference to us.
Comment by RonOglesby Monday, Jul 22, 13 @ 10:52 pm
I trust Ralph Martire and CTBA . He’s done his homework. He understands the issues. Graduated tax? Yes. Flat tax. No.
Comment by Art B Monday, Jul 22, 13 @ 10:54 pm
Typical Illinois always looking for an angle to take more money and waste it. How about before we vote on taxing anybody another penny we clean up the current mess of a fiscal situation. STOP THE BLEEDING before asking for another dime!
You do realize few wealthy are staying Illinois residents. This should get the last few that have not bought Florida homes for the tax advantage of changing residency. Many and soon all executives and others company owners will just claim they’re in Illinois less then 6 months and as such can legally claim Florida residency and pay 0%. Revenue will not go up with another tax increase. Thats what Illinois Liberals just don’t get. You are competing with zero tax states for jobs!!!!!
Lets try attracting people with wealth to live here. Lets work to eliminate our income tax not raise it. All we attract currently is link card recipients, hows that going?
Comment by Bill K Monday, Jul 22, 13 @ 10:54 pm
Yes. Ty, the civic club members and the trib editorial board sure didn’t want this topic to gain traction.
Comment by Capo Monday, Jul 22, 13 @ 11:01 pm
We can’t keep living off the backs of the poor. It’s time for the wealthy to take on more of the tax burden. It’s only fair to change the tax structure.
Comment by Pale Monday, Jul 22, 13 @ 11:26 pm
“Can the House get a 3/5 vote passed on the Graduated Income Tax?”
How bad are the odds? I believe the tallies are 71 Democrats and 47 Republicans in the house; which is exactly 60/40. Not that I’d want this to be split on partisan lines, but I think that the graduated income tax is an idea that could be sold.
Personally, I’d favor a graduated tax while lowering the corporate tax rate; and whatever the rate changes put the state 500m-1b ahead for revenue. I think that’s something that if put on the table could grab some Republicans. Maybe that’s just me being hopeful.
http://www.governing.com/gov-data/state-tax-revenue-data.html
Comment by Timmeh Monday, Jul 22, 13 @ 11:55 pm
Oswego quoted me:
“I’m OK paying more. It means I’ve had a good year.”
And then responded:
“I know I am all about the Reagan Rule of 80%, but I don’t know of many Republicans that is …”OK paying more.””"
Interesting.
Schnorf agreed with my comment.
Oswego apparently is questioning with Schnorf is really a Republican.
Comment by VonKlutzenplatz Tuesday, Jul 23, 13 @ 4:57 am
- VK -,
No, I was not questioning you or - Steve schnorf -, my point was to MAKE the point that Republicans can be in favor or things that Litmus Testers and Blood Oathers REQUIRE for memebership, like no increase in ANY taxes, and you can favor that different way of taxing, and still be a solid Republican, even in the face of what others in My Party see as “a sin”.
If you take it any other way than that, then that is on you, and if you don’t want to be seen as a Non-Litmus Tester or Blood Oather, that is on you too.
Dope.
Comment by Oswego Willy Tuesday, Jul 23, 13 @ 6:35 am
- VK -
Golly, you seem to omit the following when trying to chastise me …
===But, if we agree on 80% of the Republican Ideals, I guess its ok that you want to pay MORE in taxes …===
So, I think I addressed that, immediately.
Maybe you should run for state Rep, being a Reagan Rule Republican, but I am sure making what you said above, you wouldn’t want to take the pay cut…right?
Comment by Oswego Willy Tuesday, Jul 23, 13 @ 6:48 am
I think that Rich has it right. This will get through the Senate but it will be a real battle in the House. In principle the Dems have 60%, 71/118. However Jack Franks (who is a Democrat in Name Only–see his voting index score for Illinois Policy Institute) has already defected, so at least one Republican must come over. This will be tough if the Republicans hold to the position that opposition is a caucus position, since they showed with the Bill Black case that they really will punish any Republican who votes against a caucus position. The key to Republican votes will be to convince some Republicans’ constituencies that their interests will be served by passage of this amendment, to the point of jeopardizing re-election. This makes it really tricky, because the Speaker would perhaps rather make a Republican vulnerable than pick up a vote for the Amendment. But the Speaker is clearly not totally opposed to the amendment–otherwise Barbara Currie would not have signed on. I would put the whole enterprise in the difficult-but-not-impossible category, less than 50% odds but not hopeless.
Comment by jake Tuesday, Jul 23, 13 @ 8:11 am
Formerly Known As …
You asked where all the money is going. A good summary can be found in the graduated income tax proposal put together by Martire. It, along with a lot of other good budget analysis information, is available on their web site at www.ctbaonline.org
Comment by RNUG Tuesday, Jul 23, 13 @ 8:16 am
jake,
If they put some caps / limits on the rates and do a proper job of explaining it, I’m sure it can be sold. It may take some horse trading in the House, but at the end of the day the State will be in better shape and there will be some more money to spread around the State. That may be the price that has to be paid for the change.
Comment by RNUG Tuesday, Jul 23, 13 @ 8:20 am
Oswego,
Speaking of Reagan, “There you go again.”
Comment by VonKlutzenplatz Tuesday, Jul 23, 13 @ 8:30 am
This is getting Progressive-ly tiring, but I would want to label someone… Maybe you make too much money to help Reagan Republicans(?)
I will let you sort this all out…
Comment by Oswego Willy Tuesday, Jul 23, 13 @ 8:36 am
*wouldn’t
Comment by Oswego Willy Tuesday, Jul 23, 13 @ 8:38 am
OW,
The first general election I voted in was the one with the 1970 Con-Con changes on the ballot. Read all the material about it then, and I’ve re-read a lot of it the past 5 years, especially all the pension debate stuff. Those transcripts are a good political history lesson in how to compromise and achieve 80% - 90% of your goal.
For the record, I voted to approve it … and now that I’m a state retiree, I’m glad I did.
Comment by RNUG Tuesday, Jul 23, 13 @ 9:00 am
That would be a fun read, insofar as understanding the context of the framing of the 1970 Constitution, and further, the forsight to the issues a new Constitution may face including the Constitutional guarantees of the Pensions, and how that has played out now …
Thanks for the follow up Post, - RNUG -, always good to get your take…
Comment by Oswego Willy Tuesday, Jul 23, 13 @ 9:05 am
Well said Bill K! Already have the Florida house and ready to switch residency!
Comment by Anonymous Tuesday, Jul 23, 13 @ 9:06 am
VK
I was referring to financial benefits, salary, pension, etc. I live in Urbana which is kind of an upholstered cave where most of us wear Birkenstocks, drive a Prius with an Obama sticker on the bumper, and eat organic food. I, too, am OK paying more taxes at the current rate, which means I’ve had a good year. I’m also OK paying a higher rate if it applies to all of us.
Comment by capncrunch Tuesday, Jul 23, 13 @ 9:24 am
Oswego, assume for a second that your hunch is correct. Let’s assume I’m some north side progressive posting about the GOP. It would be wrong, but assume it for this post.
If so, how much time did you spend reviewing old posts trying to find that out? And for what gain?
Where is the pay off for you? Was that really an effective use of your time?
I’m the first to admit I waste time here. But at least I waste time making and responding to arguments. I don’t waste time trying to sort out whether a person today might be to the right and yesterday might be to the left.
Know what kind of person would waste that much time on something that doesn’t matter at all, ever? Yeah, I think you know the label.
Now get back to bashing Republicans and telling Plummer jokes. Stick to what you do best.
Comment by VonKlutzenplatz Tuesday, Jul 23, 13 @ 9:34 am
Illinois wants to spend like a blue state and tax like a red state. We have a structual deficit. The spending of pension dollars on programs has delayed the need to raise revenue. If we are going to be law abiding and honerable, then taxes neeed to go up to pay for the programs that the people collectivily keep voting for. Pensions are a contractual obligation that must be paid.
Comment by facts are stubborn things Tuesday, Jul 23, 13 @ 9:40 am
You told me we had a discussion, I looked … just saying …
Comment by Oswego Willy Tuesday, Jul 23, 13 @ 9:43 am
===Let’s assume I’m some north side progressive posting about the GOP. It would be wrong,===
Interesting …
You crack me up - VK -, I will just sit back and read, I guess you know if you are or aren’t flying under false colors, but to bash others for the specualtion, that is bad form …
I guess when I read what you post, I will keep in mind my search, that you told me about a discussion …otherwise, I probably wouldn’t have looked… but, it is going to be quite fun reading …
It is really up to you … not me…
Comment by Oswego Willy Tuesday, Jul 23, 13 @ 9:59 am
Willy, I don’t bash at you for speculation. I laugh at you for speculation.
I bash you for claiming to be a Republican and then coming here every day and doing nothing other than bashing Republicans and praising Democrats.
That’s an important distinction, Willy.
Comment by VonKlutzenplatz Tuesday, Jul 23, 13 @ 10:04 am
=== I guess you know if you are or aren’t flying under false colors, but to bash others for the specualtion, that is bad form …===
Do. Not. Feed. Trolls.
Comment by Oswego Willy Tuesday, Jul 23, 13 @ 10:05 am
No federal income tax deduction for state tax paid for those subject to AMT. So the fed won’t be subsidizing this proposed tax increase for many.
Comment by Anonymous Tuesday, Jul 23, 13 @ 10:25 am
To those dreamworlders who claim rich people won’t leave Illinois if they are taxed higher.
My tax preparer says it already is happening big time. Lifetime Illinoisans moving to Florida and other states with no or lower income taxes. He said it already is a huge trend.
Wait until a progressive tax hits.
Only crazy people deny laws of nature. Only crazy people purposely drive their most successful people away.
Comment by BuzzKill Tuesday, Jul 23, 13 @ 10:57 am
Right on Buzz Kill. When the successful people are gone, who will pay the states bills?
Comment by Anonymous Tuesday, Jul 23, 13 @ 11:20 am
Yes
Comment by Anonymous Tuesday, Jul 23, 13 @ 5:00 pm
Illinois is 1 of 7 states with a flat income tax. Illinois is fiscally unsound and can’t provide residents with the basics — good schools with smaller class sizes, fully supported police and firefighters, access to healthcare at a reasonable cost, and care for our most vulnerable, children and the elderly. We have a revenue problem problem and it is high time everyone pays their fair share. I just hope enough loopholes are closed as well to insure a progressive income tax actually collects.
Comment by Liz Brown Tuesday, Jul 30, 13 @ 1:09 pm
Yes
Comment by LADYOUTT Tuesday, Jul 30, 13 @ 4:57 pm