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No more millionaire’s tax

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Illinois

* As you probably know by now, House Speaker Michael Madigan has withdrawn his idea to slap a three point surcharge on income over a million dollars. SJ-R…

Although Democrats hold 71 seats in the House, not all of them were on board with the amendment. Earlier Wednesday, Rep. Scott Drury, D-Highwood, issued a statement that he would vote “no.”

However, Madigan spokesman Steve Brown laid blame for the amendment’s failure at the door of Republican House members.

“The speaker decided this morning, because the Republicans have opted to protect and prefer the millionaires over schoolchildren in every region of the state, that pretty much brings to an end the effort to pass the millionaires amendment for this cycle,” Brown said. “I’d say an overwhelming number of Democrats are supporting this. The fact you could get zero support from Republicans who are opting to protect the millionaires is what doomed the prospects.”

* Sun-Times…

In a statement, Drury said he was troubled by the “piecemeal approach” being used to address the state’s fiscal woes.

“The proposed tax increase falls far short of addressing the full landscape of budget issues that Illinois currently faces,” Drury said.

[Rep. Jack Franks] expressed similar concerns.

“The addition of a tax on incomes over $1 million, without the planned reduction in baseline rates, and absent reforms to our tax-incentive and corporate tax policies, would simply drive a stake through the heart of our state’s economy, and I cannot support it,” Franks said. “Taking more from taxpayers will simply accelerate our state’s economic decline.”

* More from Franks…

Franks, D-Marengo, said he told Madigan on Monday that he could not in good conscience support the amendment to impose a 3 percent tax on annual incomes greater than $1 million. He went public with the decision shortly after Rep. Scott Drury, D-Highwood, did the same.

Franks had told the Northwest Herald in a March 21 interview that he was open to putting it on the ballot to let voters decide. But on Wednesday he cited Gov. Pat Quinn’s budget address five days later, in which Quinn asked to make the temporary 67 percent tax increase permanent, as one of the catalysts to make him change his mind.

“With Governor Quinn, there’s no taxation without misrepresentation,” Franks said. “When [the millionaire tax] was presented initially, it was before the governor made clear his intention to make the tax hike permanent, or to create a property tax rebate that would in fact cost McHenry County families more.”

But he also said he told Madigan that he felt the amendment was too much a political move. While Madigan said the tax would generate at least $1 billion a year for public education, critics called it a political move aimed at Republican gubernatorial candidate and self-made multimillionaire Bruce Rauner,
Franks said he had heard the same concern from his constituents.

“I think people felt, like I did, that it was a political maneuver done to help a flailing governor,” Franks said.

When asked how Madigan took it, Franks answered, “Not well.”

* Statement from House GOP Leader Jim Durkin…

“I find the announcement by the Speaker’s office a bit confusing. Speaker Madigan holds the 71 votes required to pass his constitutional amendment, apparently support from his own members fell short. There is clearly a bi-partisan coalition that knows we can’t tax our way to prosperity and job creation. His amendment offered no help to the nearly 570,000 unemployed Illinoisans looking for a job. It’s my hope the coalition can defeat the onslaught of job crushing proposals such as a graduated tax and the permanency of the ‘temporary’ income tax on families and employers. Republicans will continue to stand up for the taxpayers of Illinois.”

* Statement from Senate GOP Leader Christine Radogno…

“The Democrat majorities and their partner Gov. Quinn always try to blame someone and something else for their record high taxes, record high unemployment and record high government spending in Illinois.

“We are relieved this tax increase that would cost families and jobs has been beaten back. But now we must continue the fight against more Democrat tax increases on families and the businesses that put them to work. The Democrat majorities are still planning an assault on taxpayers that will make their temporary income tax increase permanent, create a tax structure that raises taxes on middle income families, tax soda and raise fees on job creators. That is always their ill-conceived solution to the problems they created in the state.”

* From Americans for Prosperity Illinois…

In a victory for working families and businesses through the state, the so-called ‘millionaire tax’ has been declared dead by Speaker Madigan’s spokesman as Democratic Reps. Scott Drury and Jack Franks declared their opposition to the tax hike.

When Speaker Madigan proposed the ‘millionaire tax’ last month, Americans for Prosperity-Illinois quickly launched a campaign against the tax by airing cable TV and online ads, generating hundreds of constituent calls to priority legislators’ offices, mobilizing activists throughout districts and other grassroots activities to give voice to thousands of Illinoisans who oppose increased taxes.

“Rep. Drury and Rep. Franks should be commended for siding with taxpayers and small businesses by taking a courageous stand against this proposal,” said AFP Illinois State Director David From. “Illinois resident aren’t fooled by the false promises of Springfield politicians, and through this effort they communicated directly with legislators in their district.”

Discuss.

posted by Rich Miller
Thursday, Apr 10, 14 @ 9:50 am

Comments

This did not surprise me, given the rigor of needing a supermajority.

Now there are three options, letting the income tax increase sunset, passing a permanent extension of the tax increase or doing the so-called Fair Tax, which could be another insurmountable legislative burden.

If it comes down to extending the current income tax or doing the Fair Tax, I can’t see how legislators could not support giving a tax break to thousands of earners via the Fair Tax.

Comment by Grandson of Man Thursday, Apr 10, 14 @ 9:57 am
I am disappointed in Radogno and Durkin for spreading the false (and pandering) theme that Illinois taxation is the cause of Illinois employment weakness.

One reason Illinois employment is lagging is because public sector employment is lagging in our state.

That said, there were other problems with the surcharge proposal.

Comment by Bill White Thursday, Apr 10, 14 @ 10:04 am
Downer.

The wealthiest .01% are getting more of the state’s income as regular wages stagnate. Equality of opportunity through public education is one of the great things about our country and the 3% surcharge to directly fund school districts would have been the right policy to counterbalance the powerful trends of inequality.

It’s too bad none of the Republicans from poor districts without any millionaires were willing to side with their school children. I was hoping a few of them were open to it.

Besides the 3% surcharge would have been fully deductible off federal income taxes paid, so the net increase would have been more like 1.8%.

It’s great policy. I hope there is an effort by others to convince rural Republicans and the recalcitrant Dems to back it for the 2016 ballot. Particularly by the IEA and representatives of school districts who understand the issue of investing in children and their teachers better than most.

Comment by Dan Johnson Thursday, Apr 10, 14 @ 10:05 am
Franks can not in “good conscience” tax millionaires, but apparently he can in good conscience cut the modest pensions of middle income public employees, make them pay more for the reduced pensions, and allow their property taxes to increase. Some conscience he must have.

Ditto for Durkin.

Comment by truthteller Thursday, Apr 10, 14 @ 10:06 am
Madigan took the news “not well.”

I think the understatement of the year award goes to Franks.

Comment by In the Middle Thursday, Apr 10, 14 @ 10:06 am
I know a couple guys won’t be getting Christmas cards, or literally anything else from the Speaker any time soon. I commend their guts, but it was not a good move on their part. I can’t wait to see the fallout.

Comment by Jimbo Thursday, Apr 10, 14 @ 10:06 am
And I thought Madigan controlled everything.

That’s what many critics like to repeat.

To say this “would drive a stake into the economy” is just plain wrong. To think that any tax, at any rate, for any group, is automatically a “job killer” of any significance, is choosing to be blind to reality for political purposes.

It also would not impact any middle class families, or any but the top very few small business owners or family farmers.

Comment by Walker Thursday, Apr 10, 14 @ 10:18 am
As I said many times before, as a public employee, I generally don’t mind helping the state in dire times by taking some concessions and pension cuts. It depends on the reform, but I try to have a good attitude about it.

Now that I see again how those who have the financial means to help the state a little wage wars to not do so, including spreading misinformation, it also makes me want to dig in more and be more stubborn. Why should I and people like me bear a disproportionate share of the problems?

Comment by Grandson of Man Thursday, Apr 10, 14 @ 10:25 am
Regarding the Speaker’s disappointment, I say “Meh”

There is some serious kabuki jujitsu going on here and the “millionaire’s surcharge” had a great many other flaws.

I Scott Drury just got a much appreciated dose of vaccine to ward off Tea Party fever.

Comment by Bill White Thursday, Apr 10, 14 @ 10:26 am
I presume the legislature could also extend the tax increase, all or part, temporarily on both individuals and corporations. In fact, that might be the safest approach politically–”until the backlog of bills is paid off,” or some such reason. So folks would believe there might tax relief some day. If Rauner is elected, he almost certainly would have to do something like this to keep the lights on while he reforms whatever; Pres. Preckwinkle kept the sales tax she campaigned against for a while after she took office, with apparently no negative political consequences.

Comment by Cassandra Thursday, Apr 10, 14 @ 10:31 am
Bill White — what flaw? While it did have a political component to it (reminding people that Rauner is a billionaire and his plan to cut the state income tax to 3.75% will mean teachers are laid off and class sizes go up), I think the policy is just about flawless. The wealthiest who can afford to pay more do so. The money goes to school districts. Where’s the flaw in that?

Comment by Dan Johnson Thursday, Apr 10, 14 @ 10:33 am
The demand for a comprehensive plan instead of a partial one is an inveterate argument against reform. It is making the perfect the enemy of the good. Nothing much would change if we required a comprehensive solution before we addressed any problem.

In addition, the millionaire’s tax would have been adopted only with approval from the voters, to whom Drury and Franks don’t want to give a voice.

Comment by cicero Thursday, Apr 10, 14 @ 10:34 am
The old tired but liberal awe inspiring “the schoolchildren’s needs” I see is at play again Mr. Madigan. Well it’s really a simple thing to fix. Just cut it out of those bloated pensions you of the political class are always so happy to take. A good place then to start would be the ones that are taking multiple public pensions. I guess many of your cronies would not like that but you know, it’s for the children

Comment by Overtaxed Thursday, Apr 10, 14 @ 10:37 am
@Dan Johnson -

Because of inflation, making $1,000,000 a constitutionally prescribed rate bracket assures future problems.

Also too, does the $1,000,000 apply to gross income or net income?

I like the underlying idea but as written, there are problems.

Comment by Bill White Thursday, Apr 10, 14 @ 10:42 am
Should have been put to the Voters.

Comment by x ace Thursday, Apr 10, 14 @ 10:46 am
–“The Democrat majorities and their partner Gov. Quinn always try to blame someone and something else for their record high taxes, record high unemployment and record high government spending in Illinois.–

Talk about a broken record.

Weren’t Senate Republicans complaining a few weeks ago that the House had low-balled revenue estimates and there was actually a lot more money to spend?

And for the record, the Illinois unemployment rate is bad enough, but it is not at a “record” level. It’s been much higher many times before.

Comment by wordslinger Thursday, Apr 10, 14 @ 10:46 am
The definition of Over $1 Million in income for C Corps and small businesses is different than the people they’re trying to target with this. It was also a huge disincentive for job creators. It’s fundamentally dishonest to “target tax” people. It’s a complete fallacy that the GOP is the party of the rich. Every single Rep and Senator had people who would be disproportionately affected negatively by this. This mentions 2 relatively bold Democrats. I’m sure there a good number more. At best, this was an effort to smoke out positions. Class warfare isn’t the answer to our problems.

Comment by A guy... Thursday, Apr 10, 14 @ 10:47 am
@Bill White - thanks for laying out the problems as you see it.

The inflation issue is a problem we can solve in 20 or 30 years with another constitutional amendment. Given our tax policy is unfortunately constitutional, we should not shy away from relatively frequent constitutional amendments on tax rates.

Wouldn’t the gross/net question get figured out from legislative intent, the record on the floor and, if necessary, a court case?

Comment by Dan Johnson Thursday, Apr 10, 14 @ 10:48 am
Still waiting on the Republicans to supply their brilliant budget proposal that correlates to their desire to let the current tax rate expire. I find that to be just a dishonest.

Comment by Demoralized Thursday, Apr 10, 14 @ 11:01 am
@Bill white
“One reason Illinois employment is lagging is because public sector employment is lagging in our state.”

That’s total nonsense, Bill. Every dollar that goes to public sector employment takes money out of private sector capital available for hiring in the private sector. That’s a zero sum game unless you borrow, and the debt in Illinois, that hasn’t helped our unemployment or poor economic growth here, has already reached catastrophic proportions.

The problem here is that we’ve made poor “investments” in public spending in Illinois that haven’t paid dividends as they should have.

For decades we engaged in terrible public policies like the education pension benefits we gave to employees at the state level. There was no reason to create programs that would allow teachers and staff to retire in their mid fifties at essentially full pay (after “end of career” bumps) for fully vested employees. It took professionals for which we assigned the highest value away from providing service far before their value diminished. Either we were overpaying them for their value, or we lost assets early without gaining value. Both are bad policy results.

Our “investment” in K-12 education in Illinois has been a total bust. Between 1994 and 2011, IIRC, the amount of spending per pupil in Illinois imncreased by 83% while inflation was only 40%. Virtually all of this went to bloating staffing,salaries and benefits, which had virtually no measurable benefits to the kids. If we limited total compensation increases to the rate of inflation, the increased funding could have expanded our school contact days from around 180 to 220, now THAT would have been a good investment, but kids and taxpayers don’t have a union to bribe legislators through campaign contributions to act in their interests as the educational bureacracy does.

According to the latest NEA “Rankings and Estimates” report, Illinois teachers are the 13th highest paid, we spend the 18th hihgest amount per pupil, yet the NAEP scores for Illinois are far below those rankings.

We paid for top quality education, but got mediocrity in return.

We should refuse to raise taxes another dime for these corrupt “investments” until we get sound spending policy in education and infrastructure that’s based on serving the those receiving the services from the state, not just those providing them!

Comment by Arizona Bob Thursday, Apr 10, 14 @ 11:07 am
I think it might be unconstitutional and challenged as a progressive tax.

Comment by DuPage Thursday, Apr 10, 14 @ 11:07 am
==Every dollar that goes to public sector employment takes money out of private sector capital available for hiring in the private sector. ==

That’s just nonsense. You don’t think public sector employees contribute to the economy? The money they spend throughout the economy qualifies as as support of “private sector capital” in my mind.

Comment by Demoralized Thursday, Apr 10, 14 @ 11:13 am
So Madigan is Willing to raise taxes on all of us with no GOP support but not willing to raise taxes on Millionaires without GOP support. Interesting

Comment by fed up Thursday, Apr 10, 14 @ 11:15 am
@ Arizona Bob

This is the crux of the debate between the “Austrian Austerians” and the “Keynesians”

=== Every dollar that goes to public sector employment takes money out of private sector capital available for hiring in the private sector. ===

I assert this statement is false in an objective and scientific sense of the word “false”

Comment by Bill White Thursday, Apr 10, 14 @ 11:25 am
===Every dollar that goes to public sector employment takes money out of private sector capital available for hiring in the private sector.===

Ever been to Springfield? Ever been to a restaurant near a school? Etc., etc., etc.

Comment by Rich Miller Thursday, Apr 10, 14 @ 11:26 am
Arizona Bob

I know a lot of teachers, and they have seen more and more high priced administrators hired over the last couple of decades, and less money left for teacher’s aides, teachers, updated equipment. What they think is they need more funds on the front line, and less money at high priced analysts, administrators etc. One teacher I know said they hired an administrator at 3 times the cost of a teacher for transportation. Really? And this guy bought some expensive software to figure out bus routes that were going to save some gas?

Comment by 3rd Generation Chicago Native Thursday, Apr 10, 14 @ 11:28 am
====Every dollar that goes to public sector employment takes money out of private sector capital available for hiring in the private sector. ==

Since IL ranks as a low-spending state, with the smallest state burocracy per capita, why isn’t our state economy doing better as it should under your theory?

== So Madigan is Willing to raise taxes on all of us with no GOP support but not willing to raise taxes on Millionaires without GOP support. Interesting. ==

The millionaire’s tax requires a three-fifths majority to put it on the ballot, while making the temporary tax permanent only requires a simple majority. There’s an 11-vote difference between the two.

Comment by cicero Thursday, Apr 10, 14 @ 11:29 am
Also, there are great piles of private capital lying around idle. Lack of investment capital is NOT a problem we face.

How do I know this?

My local bank wants to pay me less than one percent (1%) for a 5 year CD and Bank of America just offered me a credit card advance at zero percent interest for 14 months with a 2% fee up front. Money (capital) is cheap and customers are scarce.

Comment by Bill White Thursday, Apr 10, 14 @ 11:32 am
Dan - the flaw I saw was that it was distributed on a per student basis, regardless of need. So it wouldn’t help close the gap of education quality or student performance across the state.

Comment by TCB Thursday, Apr 10, 14 @ 11:49 am
Drury ran on a platform to protect Social Security, and to protect retirees. Then he voted for the bill that cut retirees pensions (SB 1), and now he blocks the 3% income tax surcharge on those earning more than $1,000,000 per year!

Sheesh! I wonder what his platform for the next election cycle will look like. Save the millionaires, crush the seniors?

Comment by Anonymous Thursday, Apr 10, 14 @ 12:08 pm
===Every dollar that goes to public sector employment takes money out of private sector capital available for hiring in the private sector.===

Ever been to Springfield? Ever been to a restaurant near a school? Etc., etc., etc.==

Sure have, Rich. Ever been to restaurants outside a factory or private sector office building?

If you’re trying to make a point that public employees spend the money we give them, there’s no disagreement. We could say the same about restaurants outside places where people pick up their welfare and other public assistance checks. The difference is the “value added” by the service they produce. The person working in the office or the factory produces things of greater value than their labor, wealth is created and we’re all richer for it.

A $120K per nine month suburban gym teacher whose students are no more fit or healthy because of it, or a math teacher who’s paid the same amount, yet students leave their classroom mathematically illitertate, has not created value. Those are “bad investments” that don’t deserve continued support.

In the private sector resources go to where the most value is created. In the public sector the resources go where the resources best serve the interests of self serving pols.

The private sector builds the wealth and prosperity in a state or nation. The public sector rarely does, at least the way resoures are allocated in Illinois.

Believe me, if public sector spending here was effective, fair and grew the wealth of Illinois at a rate more than its cost, I’d support it. The problem is that the corruption here makes public spending largely a bad “investment”.

Comment by Arizona Bob Thursday, Apr 10, 14 @ 1:09 pm
Now that we can’t pick on those who are able to pay more, we really need to resume stalking the usual prey……actual real working folks (with kids to raise, aging parent to help out) and seniors with health problems, prescription bills. That’s who pays the bills in this state. Why change the game now? Tax the homeless and unemployed too but do NOT ask a penny more of multi millionaires. I have no idea why we entertain ourselves with the notion that this is a representative democracy. I guess we can continue to dream. The wealthy are running our government and use it to protect themselves. Stop thinking anyone else actually matters. Waste of time.

As for public employees not contributing to our economy…..don’t make yourself look so stupid. I think publics eat food just exactly like you do, drive cars like you do, you get my drift. Must one stoop so low to explain to you? Do you understand? And AZ Bob—you, your kids or your grandkids must have been real dumbos in school or been “non-compliant” and in trouble all the time because you sure do have a huge chip on your shoulders about the trough you fed from.

Comment by Anonymous Thursday, Apr 10, 14 @ 1:10 pm
cicero
====Every dollar that goes to public sector employment takes money out of private sector capital available for hiring in the private sector. ==

=Since IL ranks as a low-spending state, with the smallest state burocracy per capita, why isn’t our state economy doing better as it should under your theory?=

I could certainly challenge that “low spending state” statement, but the real answer to the question is that Illinois has created one of the most hostile business environments in the nation.

It’s not just spending, it’s the toxic regulatory environment, the unfair and unbalanced tilt towards organized labor in state law, and the costly and unfair legal environment created by the campaign contributions from the Trial Lawyer Assocation here.

You’d have to be nuts to grow your business here, or start a new one.

That’s another reason that there’s a “brain drain” out of Illinois by the best and brightest from our impressive private, and some public,
universities.

I recently read that there’s a VERY substantial difference in the income of people leaving Illinois from those who are coming in, and not in our favor.

This is all correctable, but won’t be with the current Illinois voter mentality.

Comment by Arizona Bob Thursday, Apr 10, 14 @ 1:17 pm
@3rd gen
I can’t disagree with you about the adminstrative fat added to public ed. High Schools in Orland park average 17 administrators per school, and that doesn’t include administrative clerical and support staff. One high school has FIVE deans!

Most of the admins I’ve known are former teachers who did political favors to get the promotion, and do little good.

It’s politics, not good school policy.

Comment by Arizona Bob Thursday, Apr 10, 14 @ 1:22 pm
Just as the Speaker planned. Snark.

Comment by Befuddled Thursday, Apr 10, 14 @ 1:27 pm
–You’d have to be nuts to grow your business here, or start a new one.–

Here’s to the nuts!

Jeez, Bob, you’ve got all the usual talking points today.

http://www.siteselection.com/issues/2014/mar/metros.cfm?s=mp

Comment by wordslinger Thursday, Apr 10, 14 @ 1:28 pm
@Arizona Bob:

Consumer spending makes up the vast majority of the economy. I don’t consider jobs of any sort to be a bad investment. Any job is an investment in the economy, no matter how you try to spin it.

I know it’s popular to make bold blanket statements that the public sector is all bad. It’s the “in” thing to do. But your blanket belittling of the public sector ignores the many benefits it provides you - education, public safety, transportation, etc. You may think those are bad investments. On that we would disagree.

Comment by Demoralized Thursday, Apr 10, 14 @ 1:29 pm
=And AZ Bob—you, your kids or your grandkids must have been real dumbos in school or been “non-compliant” and in trouble all the time because you sure do have a huge chip on your shoulders about the trough you fed from.=

Huh? Sorry. I was in the top 8% of my HS class, top 5% in my ACT, got two engineering degrees from the #1 engineerng school in the country in my discipline, and actually taught as asubstitute as a “public service” in over a dozen public HS when I had a felxible schedule in consulting.

This was largely in spite of what I got from the bureaucracy, rather than because of it. I also taught Math and Science at the HS and college level for 3 years. I’ve seen what’s happening in Public education up close and personal, and that’s why I’m a zealot for reform.

I believe that those who know what’s going on have a “Nobles Oblige” to fix that which is dishonest and wrong.

Sorry if that bursts your liberal bubble, cowardly anon

Comment by Arizona Bob Thursday, Apr 10, 14 @ 1:29 pm
@TCB - fair point, but I think that’s a feature not a bug. Distributing to all students on a per capita basis doesn’t close the inequities in education spending (as the Senate Dems are trying to do led by Senator Manar) but it does narrow the gap as the revenue comes exclusively from wealthy districts (almost by definition) and flows everywhere, not just to wealthy districts (as the status quo).

@Arizona Bob, demand causes business growth, not the regulatory environmental or potential tort cases. Our demand isn’t high enough here because people aren’t making enough money. Firing tens of thousands of public sector employees hurts that cause. True, the pension benefits are too high relative to the revenue coming in, but the GA is fixing that. Higher wages would do more for business growth than just about anything else on your list. If you really think there’s an unfair tilt towards organized labor, why is the % of the private sector workforce that is organized going down? More talking points than data, I think.

Comment by Dan Johnson Thursday, Apr 10, 14 @ 1:31 pm
==bursts your liberal bubble==

A disagreement with your thoughts doesn’t necessarily make one a liberal. Sheesh.

Comment by Demoralized Thursday, Apr 10, 14 @ 1:32 pm
AZ Bob

Would’ve been impressed if you’d done that on your own but instead you used teachers and the system you feel so much disdain for to get what you needed for you. Now that you’ve got yours….By the way, sounds like your education and all those who spoonfed you did a bang up job. But you could never give anyone credit but yourself.

Comment by Anonymous Thursday, Apr 10, 14 @ 1:38 pm
@Demoralized

I’m not criticizing consumer spending, the problem is that too often public spending doesn’t create the value commensurate with its cost.

For example, you can hire a streets and san guy to dig a hole in the morning, then fill it in in
the afternoon. No real value has been added to the econonomy, but they still get money and spend it.

A private sector worker creates a valuable service or product all day and circulates the same amount of money. In the latter case, the people are better off for the private sector’s work. In the first case, the public have gained nothing.

In the private sector, if you stop producing the company goes out of business and your labor goes elsewhere where you can be more valuable.

In the public sector (especially in the Fed) the value of what you produce is irrelevant and the service continues regardless of this fact, and the worker doesn’t move on to more vaulable pursuits.

If you can’t understand that this is why its better to keep the money in the private sector rather than tax it to the public, I guess I’m not eloquent enough to make the case.

Comment by Arizona Bob Thursday, Apr 10, 14 @ 1:39 pm
@Arizona Bob:

Essentially what you are saying is that the public sector is worthless, or at least that’s the impression I get. You claim there is no value in the public sector. That is just plain nonsense. The public gains plenty from public sector activities, and I can’t believe you are so blind as not to see that. Are there some that probably aren’t productive? Sure. But that’s doesn’t warrant your assertion that the public sector provides no value. You are simply wrong.

Comment by Demoralized Thursday, Apr 10, 14 @ 1:44 pm
@Dan Johnson
=demand causes business growth, not the regulatory environmental or potential tort cases.=

Dan, the growth doesn’t have to be in Illinois to grow business here, but the production needs to be to increase our wealth and employment. Regulatory and tort costs ae business expenses that make it less deirable to prooduce here. YOU don’t get this?

=Higher wages would do more for business growth than just about anything else on your list.=

I agree, but higher value of labor has to come before “gifting” the higher wages. You improve productivity and expense and address the unfair pension burden on businesses and this can happen.

=If you really think there’s an unfair tilt towards organized labor, why is the % of the private sector workforce that is organized going down?=

Because the labor environment here is driving the unionized jobs out of state to places like Tennessee. If the labor arrangments here were fair and market driven, there would more companies like Caterpillar building their faciories and expansions here. They aren’t, and labor power here is the reason why.

Remember the Hostess labor debacle? Greedy labor killed the company then the union workers lost their jobs and the company was taken over as non-union and hired people at far less wages than the union workers would’ve gotten if they agreed to the cutbacks.

Perhaps there’s no better illustration of how labor has shot itself in the foot than that example.

Comment by Arizona Bob Thursday, Apr 10, 14 @ 1:51 pm
@Arizona Bob

Right now, the greatest drag on our economy is idle money and idle capital. Money being kept in giant piles and not being spent. Kinda like the board game Monopoly when at the end one player owns all the properties, with hotels, and has all the cash.

Game over.

Illinois business doesn’t need tax breaks, it needs customers.

===

As for workers comp reform - one of the biggest drivers of high workers compensation premiums are medical payment reimbursement rates higher than what most health insurance plans pay.

In other words, doing a knee replacement earns a doctor more when covered by workers comp than when covered by plain ordinary health insurance.

But everyone - on both sides of the aisle - receives campaign donations from the private sector medical industry to make sure that gravy train keeps on running.

Single payer medical coverage combined with moving medical pay out of the workers comp arena would cause those premiums to drop like a rock.

Comment by Bill White Thursday, Apr 10, 14 @ 1:52 pm
@Arizona Bob

I don’t understand how you reconcile allegedly unfair labor power with ‘fair’ market-driven labor arrangements. If you want the marketplace to set all wages, then if workers get together and amp up their bargaining power, why is that suddenly anti-market? It’s like you’re saying market-driven rates means there isn’t any labor power. If you’re all market-driven, if a labor union does a good job in the marketplace of labor and organizes workers, then good for them.

We’ve added productivity. Productivity is already up huge. The gains from that productivity haven’t been shared with labor, by and large. It’s largely been enjoyed by capital (which is largely owned by the top 1%).

And on workers comp, I’m getting increasingly intrigued by the idea that this is more an insurance problem than a causation or benefits problem. Almost all businesses buy workers comp insurance. The insurance carriers enjoy the benefits of paying out less benefits and paying providers less, but they don’t have any obligation or requirement to pass those savings on in the form of lower premiums. So even though health providers get paid less and benefits are cut, the employers aren’t seeing a reduction in their workers comp premiums commensurate with those cost reductions, because the insurance carriers take it as windfall profit.

Maybe something like Obamacare’s requirement that 85% of all premiums be paid out in claims would be the right step for the state to take to ensure workers compensation insurance premiums get reduced. Most businesses see workers compensation costs as insurance premiums. That’s it. A few of the biggest ones self-insure, so they have enjoyed the benefits of lower costs from the 2011 reforms. But we still need to tackle reducing workers compensation insurance premium costs, not just workers compensation costs.

Comment by Dan Johnson Thursday, Apr 10, 14 @ 2:08 pm
@Dan Johnson

But, it’s so much more fun beating up on those nasty unions. Why would we want a sensible “win-win-win” solution to issues such as workers comp reform?

/snark

Comment by Bill White Thursday, Apr 10, 14 @ 2:27 pm
Bob, thanks for the amusement. Let’s ask those Europeans how austerity has worked out thus far. Facts can be such as pesky thing.

Comment by Jorge Thursday, Apr 10, 14 @ 2:37 pm
How about a constitutional amendment that bans politicians from giving handouts and welfare to millionaires and their businesses and bans government from subsidizing professional sports and entertainment?

Comment by Jeff Trigg Thursday, Apr 10, 14 @ 2:43 pm
“Taught Math and Science at the HS and College level for 3 years”

AZ Bob didn’t get tenure! All is explained.

Comment by Arthur Andersen Thursday, Apr 10, 14 @ 5:52 pm
@Arthur Anderson
=“Taught Math and Science at the HS and College level for 3 years”

AZ Bob didn’t get tenure! All is explained.=

Ummmm…I was never on a tenure track. I just took a three year sabatical when my kids were young to be around while they were pre-schoolers, and because I believe that professionals should be engaged in selfless sacrifice for the education of our children.

Sorry if that doesn’t fit your conception of the greedy public “educator” you know and love, Arthur!

Comment by Arizona Bob Friday, Apr 11, 14 @ 8:00 am
@JOrge
=Bob, thanks for the amusement. Let’s ask those Europeans how austerity has worked out thus far. Facts can be such as pesky thing.=

Yes they can. You should try learning some. Jorge. Europe hasn’t reduced spending at all. They’ve increased spending every year through this mess, but they just reduced the rate of growth of public spending.

Try learning a little about the facts before you post…..

Comment by Arizona Bob Friday, Apr 11, 14 @ 8:02 am