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Polling the “Rauner tax”

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Illinois
Polls

* My weekly syndicated newspaper column…

“This morning,” 1,063 respondents were told the evening of July 17th during a Capitol Fax/We Ask America poll, “Republican candidate for governor Bruce Rauner released an economic plan for Illinois.

“That plan calls for a freeze on property taxes and rolling back the 2010 tax increase. It also implements a new tax on services, such as advertising, legal services, and mini-storage centers. We’d like to know whether this type of plan would make you more likely, or less likely to vote for him.”

Rauner had most certainly tested his service tax proposal backwards and forwards before presenting it to the public last week, so I figured it had to poll fairly well. It did.

The poll found that 53 percent said they’d be more likely to vote for Rauner, while just 32 percent said they’d be less likely to vote for him and 15 percent said it made no difference.

As we’ve discussed before, Rauner has struggled a bit with women, but they actually liked the idea more than men. 56 percent said the idea made them more likely to vote for Rauner, while just 28 percent said they were less likely. The male split was 47 percent more, 39 percent less.

The highest regional support for the plan came from the suburban collar counties, where Rauner did the best in the primary. 66 percent of collar county voters said the proposal made them more likely to vote for Rauner, while 25 percent said less. The split among Downstaters was 53-27, it was 49-38 among suburban Cook County voters and he was upside down in Chicago, where he always polls poorly, 32-50.

Just 17 percent of Republicans said they’d be less likely to vote for Rauner while 66 percent said they’d be more likely. Among independents, 56 percent were more likely and 29 percent were less likely to vote for him. And among Democrats, 33 percent were more likely while 53 percent less likely.

Why does this look so popular? Well, people hate that income tax hike and they hate their property taxes. On its face, this could look like a “magic bullet” to folks.

There are no magic bullets, of course. If there were, they would’ve already been used.

Rauner specified a mere $577 million in new annual revenues via his service tax, which is nowhere near the $8 billion he wants to give up from the income tax hike.

Rauner says he’d phase out that tax hike over four years, and he’s said he could accomplish this with economic growth. According to the state’s Commission on Government Forecasting and Accountability, income tax revenue growth averaged just 6.8 percent between Fiscal Year 1998 and Fiscal Year 2013. Rauner wants to grow those revenues by almost 67 percent over just four years.

“Rauner’s plan would add more than a half-billion dollars to state coffers, but wouldn’t come close to replacing the $8 billion from the taxes he would roll back,” polling respondents were told. “Do you think the state can afford the Rauner plan?”

Illinoisans were split, with 41 percent of the respondents saying the state can afford it and 43 percent saying it can’t.

“They want the benefits of overall lower taxes, but doubt the viability,” said pollster Gregg Durham. The poll had a margin of error of +/-3 percent. 28 percent were mobile phone users.

And that second set of numbers might’ve been far worse had more specifics been used.

“Too bad [Rauner’s plan] is entirely phony and false and paid for by massive cuts to education,” texted Gov. Pat Quinn’s campaign spokesperson Brooke Anderson last week. “Wonder how that polls.”

Anderson rightly pointed out that the state budget includes around $16 billion in “non-mandated” expenditures – the rest is pretty much required and/or locked-in spending.

Without massive, unprecedented growth, Rauner would have to cut that $16 billion in spending in half - and education also makes up half of that $16 billion. “Talk about decimating public education - you’re pretty much eliminating it,” Anderson said, giving us a likely preview of the upcoming TV attack ads.

Not to mention the massive fiscal cliff created by this year’s state budget, which adds billions in deferred costs to next year’s budget. The only way to avoid that is to raise the rate back up to 5 percent after January 1st, when it’s scheduled to go down to 3.75 percent.

Rauner’s campaign refused to talk about specific phase-out percentages and timelines last week. But the cold hard reality is, that tax hike isn’t going away very soon, no matter what he says.

posted by Rich Miller
Monday, Jul 21, 14 @ 8:51 am

Comments

Always good to have a plan that polls well. Quinn’s leadership or lack thereof has resulted in the low growth contributing to lagging revenue growth.

Comment by Apocolypse Now Monday, Jul 21, 14 @ 9:06 am
===…the state budget includes around $16 billion in “non-mandated” expenditures – the rest is pretty much required and/or locked-in spending.===

The mandatory expenditures seem to be the forgotten devil in all the details. For me, the most fascinating discussion is finding the cuts with the parameters of what can’t be cut by mandate after the political rhetoric catches up with budgetary realities.

Rauner still gets props for having moved the discussion to the realities of what a Rauner budget might look like. While that is great, the sun setting of the income tax Rauner dialed into districts supporting, is now going to be met with legislative realities of a “Day One” agenda of getting the income tax portion of Rauner’s fiscal plan passed to make all the other dominos fall.

Great column Rich. The polling married with the realities is important. Good perspective.

Comment by Oswego Willy Monday, Jul 21, 14 @ 9:10 am
=== Well, people hate that income tax hike and they hate their property taxes. ===

Call me contrarian, but I would rather pay taxes I can deduct on my Form 1040 than taxes I cannot.

Comment by Bill White Monday, Jul 21, 14 @ 9:16 am
Nice that he has a tax plan that will get him elected. Too bad it isn’t a tax plan that can be used to run the state.

But at least a service tax is now on the table …

Comment by RNUG Monday, Jul 21, 14 @ 9:23 am
Too bad Anderson and the Quinnster’s response is, like, (huff) “totally what-e-ver” and most of the press covered Rauner’s plan in a way that has him crossing a credibility threshold that’s enough for most voters.

Agree with OW though. Good column, Rich. Sadly no one persuadable reads it or this blog.

Comment by ChinaTown Monday, Jul 21, 14 @ 9:24 am
With that, and the surtax on income over 1 million per year, we might be able to phase out the temporary income tax increase in 5 or 6 years.

Comment by PublicServant Monday, Jul 21, 14 @ 9:39 am
Rauner has a campaign tax proposition that most people like. It could obviously work politically.

I’d hate to call it a “plan” while it doesn’t seriously address the state’s fiscal problem. On its face, it digs a bigger hole, even using Rauner’s best assumptions.

It’s a decent start to the discussion, and might lead to some movement on both sides toward an eventual plan.

Voters will always focus more on money in their pockets than on whatever we might say about the state of the state and all it might provide. That is for leaders and elected representatives to tackle.

Comment by walker Monday, Jul 21, 14 @ 9:44 am
“But the cold hard reality is, that tax hike isn’t going away very soon, no matter what he says.

The operating phrase being “cold hard reality.”

That’s a big hole we’re about to see without the income tax increase.

People say that the income tax increase was bad for the state. Can we imagine how much worse it will be with the loss of revenue?

Someone has to have the guts to keep revenue at the level we need to have a successful state.

“Rauner says he’d phase out that tax hike over four years”

I hope I understand this correctly: If the 5% income tax is not kept via legislation this fall, it sunsets, and then Rauner as governor would vote for a tax increase?

If true, Rauner’s been smashing Quinn for keeping the tax increase but he wants to keep it (with phase-out).

Comment by Grandson of Man Monday, Jul 21, 14 @ 9:49 am
==Good column, Rich. Sadly no one persuadable reads it or this blog.==
I read it. So persuade me.

Comment by Steve Reick Monday, Jul 21, 14 @ 9:51 am
Barring a vote by the GA and a governor’s signature, the tax hike is going away on Jan. 1.

If Rauner wins, there’s no way Quinn signs a tax hike in a lame-duck veto session. Rauner will have to sell it and put many GOP votes on it.

Comment by wordslinger Monday, Jul 21, 14 @ 9:56 am
I would think that Rauner would support a low income tax for the wealthy and an extension of the sales tax for services that’s regressive in nature to place more of a burden on the middle class. I hope middle class people understand this.

Comment by forwhatitsworth Monday, Jul 21, 14 @ 10:10 am
forwhatitsworth…

I don’t see how Advertising Agencies, Armored Car services, Commercial linen supply,Investigation services,Telephone answering services nor custom computer programming services or golf club membership fees really impact the middle class…

So how about instead of just parroting the Quinn campaign, you offer some real examples of how (ideally with specific service taxes) this will impact the middle class…

Comment by OneMan Monday, Jul 21, 14 @ 10:18 am
At least he finally put a plan on the table that everyone can look at and pick apart, which is expected, rather than laughs and cat calls from every corner. At least the newspapers are not ripping it to pieces as being a joke. Maybe we might be able to see some real substance in this race for the Governors office. Hope so.

Comment by Ginhouse Tommy Monday, Jul 21, 14 @ 10:22 am
===If Rauner wins, there’s no way Quinn signs a tax hike in a lame-duck veto session. Rauner will have to sell it and put many GOP votes on it.===

That is real.

Depending on how MJM and Cullerton feel about how Rauner mends fences, and how Rauner decides the tone of the first weeks of a Rauner Administration will be, that is going to dictate how many GOP votes are going to be needed to pass his new tax structure.

A “Day One” built-in problem for “Governor-Elect Rauner, and then “Governor Rauner”. No real avenue for a lame duck GA passing Rauner’s plan with Veto-Proof votes over a lame duck Quinn’s probable veto.

Comment by Oswego Willy Monday, Jul 21, 14 @ 10:23 am
The service tax will cause a lot of additional paperwork for small businesses, and produce a relatively small amount of revenue.

Comment by DuPage Monday, Jul 21, 14 @ 10:23 am
It seems to me that consumption/service/VAT taxes come up almost yearly as a possible solution to the state’s fiscal problems–even Blago had some type of VAT tax proposal–but they always die on the vine.I guess in the end, change makes folks nervous. And the services facing taxation no doubt can make their voices and their campaign contributions known to the general assembly. A Governor Rauner would have to move fast while everybody is in shock, because it’s unlikely the Democrats who run the GA would want him to actually improve the fairness and progressivity of our state tax system. That’s what they are supposed to be doing–or supposed to have done, actually, since they have been in power for over a decade.

Comment by Cassandra Monday, Jul 21, 14 @ 10:35 am
Over the first five years of Rauner’s tax plan, there would be no difference on the total income tax dollars collected between his pan and the current sunset provision. Over the four years of his single term he actually collects more income dollars in total. The increase in property taxes is very real, resulting in a net increase in tax burden under a Rauner governorship.

Rearranging deck chairs is not a plan, and taking in more money is not reducing taxes.

Comment by Toure's Latte Monday, Jul 21, 14 @ 10:45 am
How does a governor freeze property taxes? Is that something a governor can realistically do?

Then if it can be done, what about the effect on local school, fire, park, library, county, township and other taxing body districts? I would expect pain for not only those taxing body districts, but also the people those districts serve.

Comment by Joe M Monday, Jul 21, 14 @ 10:54 am
People are “for” progress. Incremental progress is enough. If this moves in the direction of stopping the bleeding or kicking the can in the opposite direction, it’s a step or a kick in the right direction. In Illinois….that’s news.

Comment by A guy... Monday, Jul 21, 14 @ 10:57 am
OneMan, dude, the majority of those services impact small businesses heavily, and using conservative logic (businesses don’t pay taxes, customers do) those taxes will hit the little folks like you and me. These services were chosen because they don’t seem to affect the little folks, but they do. Coupled with a reduction in income tax (all the way to 3% instead of 3.75%) and Rauner and his buddies end up paying much less while the rest of us pay a bit more for things (but it doesn’t look like taxes we’re paying, jut higher costs for goods and services from businesses passing their costs on to us).

Comment by Jimbo Monday, Jul 21, 14 @ 11:08 am
== If this moves in the direction of stopping the bleeding or kicking the can in the opposite direction,==

Problem is it doesn’t. It makes the problem worse. I would fully support this if it weren’t combined with lowering the income tax. Anybody who has even an elementary understanding of math knows that does not stop the bleeding. It makes the bleeding worse.

Comment by Demoralized Monday, Jul 21, 14 @ 11:08 am
TL, can you re-make your point with some real dollar assumptions, because so far I can’t make what I thin you’re saying add up?

Comment by steve schnorf Monday, Jul 21, 14 @ 11:12 am
Even if we could say that these proposed service taxes won’t be regressive or hurt John Q. Public, everyone should understand that most of these services are used by small businesses and taxing them would be bad for growth. Doesn’t everyone always say that growing small businesses is the key to our economic success?

Comment by Jimbo Monday, Jul 21, 14 @ 11:15 am
Steve Schnorf, I think he’s assuming level incomes through those years, currently taxes are set to go to 3.75. I think he’s assuming that Rauner’s tax rates are phased out over five years, meaning that the average tax rate would be 4% for all of those years. The math is bad though, because Rauner isn’t proposing keeping rates at 5% the first year, and I was under the impression they were phased out over three years with a cut the first year, so the average for those years would be the difference between the first year rate and 3%. Is he proposing 0.5% cuts? I don’t recall. I thought they were 0.75% cuts, but that math doesn’t work. It makes more sense that it would be 4.5% for year 0, then 4%, then 3.5%, then 3% which would mean rates would be a 3% after 3 years.

Comment by Jimbo Monday, Jul 21, 14 @ 11:21 am
Problem is it doesn’t.

No. The problem is Quinn hasn’t sold voters on an alternative and he has had five years to do so. He has been blocked by Mr. Speaker’s political needs and his own hope that somehow everything will return to normal without having to do anything.

It is 2014 and we’re still economically stagnant in the minds of too many voters. Shout all the facts at them you want, but they are not seeing things getting better in their neighborhoods and towns.

It is weird. We’ve had seven years of economic stresses and while the dams are no longer being breached, there is a feeling that the dams will not continue to hold. There is a malaise in 2014, no one would have guessed would still exist back in 2010.

It wasn’t unrealistic to believe in 2010 that the Illinois economy would have rebounded by now, because history showed that happening in the past. Yet, it is what it is and Quinn needs to have some political plans in place to get reelected. Quinn needs to get lipstick on this pig and smile like he just discovered love at first sight.

Voters want to see something that looks different. If you are the incumbent, that requires you go out of your way to produce something that looks really different. Challengers have a natural advantage, but incumbents can portray themselves as the agents of change too - even if it is a stretch.

Quinn has to stop hoping outside events will get him lucky once more. His luck isn’t ours if it isn’t really much more than an election win for him.

That is the problem. Rauner can promise anything. Pointing out that it isn’t true, or feasible, or rational, or unworkable isn’t enough for Quinn to tell us.

You can’t beat something new with something proven to be a failure, or nothing at all. Popping holes into Rauner’s plans won’t deflate them when he keeps inflating them faster and has the bucks to sell those plans.

Comment by VanillaMan Monday, Jul 21, 14 @ 11:32 am
Unless I’m mistaken, the Ill. SC held a service tax on legal fees unconstitutional back in the 1980s…

Comment by D.P.Gumby Monday, Jul 21, 14 @ 11:54 am
Our state needs more revenue, period. How to get it? People like Rauner will make sure we get it but that those in that income bracket don’t have to pay it.

Comment by Just Trying to Survive Monday, Jul 21, 14 @ 12:40 pm
Whether or not you support Rauner, his tax plan is not irresponsible- Quinn can attack him all he wants but no one can honestly say the State is not in dire need of a new direction- Zillow reported today that housing prices in the Chicago metro area are the slowest to recover in the top ten markets in Zillow’s study-According to Zillow, Chicago area Housing prices are not going to recover their pre-crisis pricing until 2026- The one and only reason for the local housing mess is the area economy is so perilous as is the employment outlook-All of this is not Pat Quinn’s fault but his continuation of the same policies and inability to reign in the public sector union stranglehold is killing the economy and in turn all of us are paying for it in terms of housing values

Comment by Sue Monday, Jul 21, 14 @ 1:30 pm
@Sue:

Care to tell all of us how replacing billions in revenue with $600M in revenue is somehow a good thing? I think Rauner’s plan on the service tax is good. Getting rid of the current income tax rate isn’t good. It’s a recipe for disaster.

@VMan:

Nice to see you are still on your bandwagon. But I’ll say it again - doesn’t make it true. And I know that you aren’t a political novice, though your argument makes you seem like one. Candidates can and do indeed win by pointing out the foibles of the other candidates plans. Oh, and in case you’ve lived under a rock Quinn has put forward several plans. Just because they didn’t pass doesn’t mean he didn’t have a plan. He had the cajones to come out and say we need to keep the current tax rate. That’s pretty bold in an election year. But apparently you were asleep when that happened.

Comment by Demoralized Monday, Jul 21, 14 @ 1:44 pm
Rauner is taking on the tax cut tea party types by acknowledging we can’t roll back the income tax hike immediately - He is showing more leadership then he is being given credit for-How he gets more revenue will be an unfolding story but at least he admits the State needs $$ from somewhere

Comment by Sue Monday, Jul 21, 14 @ 1:58 pm
I’ve been pretty surprised by the muted response to Rauner calling for an extension of the income tax increase. Yeah, you can say you want to roll it back over four years, but the fact is, as things stand now, it rolls back on Jan. 1.

Comment by wordslinger Monday, Jul 21, 14 @ 2:03 pm
@Sue:

I agree with you. I’m pleasantly surprised by Rauner’s latest tax plan. The fact that he is even talking about taxation is a huge deal. But it doesn’t assuage my concerns about the revenue shortfall that will happen when the current tax rate expires. His “budget” was a sham so I’m waiting for the rest of his plan. He’s got 3 months to convince me. He hasn’t yet.

Comment by Demoralized Monday, Jul 21, 14 @ 2:04 pm
===Rauner is taking on the tax cut tea party types by acknowledging we can’t roll back the income tax hike immediately===

But Rauner’s plan leaves the revenues $5-6 Billion (with a ‘B’) short of expenditures. I have been impressed he gave us something, but it’s missing the point of governing, and needs the GA to get it to 5% again.

Big asks left to govern.

Comment by Oswego Willy Monday, Jul 21, 14 @ 2:04 pm
When will Rauner give details to his gradual tax rollback scheme? It hs been pointed out that 5% rate drops to 3.75% on Jan. 1. Is that consistent with his gradual rollback? Or will he try to extend the 5%? When will let us know?

Comment by Anon Monday, Jul 21, 14 @ 2:13 pm
I’m not a political novice.
My advice for Quinn takes into consideration what seems to me to be where voters are in 2014. Fed up. They aren’t buying the idea that incumbents can just bash their challengers.

Quinn has to campaign showing that Illinoisans have the right guy in office right now by showing and trumpeting a positive and optimistic message they can believe in.

He isn’t doing that. He isn’t even keeping up with Rauner. He might think he can catch up with Bruce with three months to go, but this is not the year he should be playing catch up.

Quinn needed to have run like folks want to kick him out of office as soon as he got the nomination. He needed to prove himself harder than his challenger needed to. Quinn had to run like this election is a referendum on him.

If it isn’t, then he can win. If it is, then he can still win.

My calculations is that 2014 is going to be about booting out as many incumbents as possible, especially those with (D) behind their last names.

Run scared, with a big grin, and make this campaign one voters will be remembering as the one that you believed in yourself - even in the face of bad times. If you go down, go down as a champion.

I’m not seeing Quinn doing this and he needs to.

Comment by VanillaMan Monday, Jul 21, 14 @ 2:33 pm
===Quinn had to run like this election is a referendum on him.===

lol. No he doesn’t.

There are now two plans on how to govern in Illinois voters choose of the two.

Yikes!

Comment by Oswego Willy Monday, Jul 21, 14 @ 3:07 pm
–My calculations is that 2014 is going to be about booting out as many incumbents as possible, especially those with (D) behind their last names.–

And my calculation is that incumbents Durbin, White, Lisa Madigan and JBT will win without breaking a sweat. Quinn may not, but he’s lost more than he’s won over the years, so it won’t be a terrible surprise if he does.

But that’s just the view from Planet Earth. I don’t know from your perspective.

I saw a new Rauner spot yesterday where he pounds lumps on Quinn for the tax increase — you know, the one he wants to keep and then “rollback” over four years.

If he can pull that off, he’s the best salesman since PT Barnum.

Comment by wordslinger Monday, Jul 21, 14 @ 3:14 pm
===And my calculation is that incumbents Durbin, White, Lisa Madigan and JBT will win without breaking a sweat.===

But, but…other than that, or …

Well played.

Comment by Oswego Willy Monday, Jul 21, 14 @ 3:25 pm
Wordslinger- Anyone who can raise Billions of investment dollars for a private equity fund is by definition a great salesman- So if salesmanship is a winning criteria, Rauner will win by a mile- Quinn can’t sell ice to Escimoes

Comment by Sue Monday, Jul 21, 14 @ 4:32 pm
===Quinn can’t sell ice to Escimoes===

He sold himself to voters four years ago, tho.

Just sayin…

Comment by Rich Miller Monday, Jul 21, 14 @ 4:33 pm
Sue, Quinn won an election he had no business winning. Historic GOP year. Recession. Blago. Taxes……

I’m just saying that if Rauner can run against the tax increase that he wants to keep, he’s a whale of a salesman.

Comment by wordslinger Monday, Jul 21, 14 @ 4:49 pm
VM, can you name just a few D incumbents you expect to lose, because I have a hard time seeing very many? I may be wrong and you may be right, but I would like to know your thoughts as to who.

Comment by steve schnorf Monday, Jul 21, 14 @ 6:48 pm
It’s really the Newest Version of the Rauner “Smoke and Mirrors Game” of simply ignoring SERIOUS Government financial ReALites and hoping that with that big smile, deep voice, and Carhartt apparel, he can pull the wool over the People’s faces once again, as he did in the GOP Primary. Somehow, I just don’t think he’s gonna get away with it this time…

The “People,” or at least a LOT of ‘em, struggle often to live from Paycheck to Paycheck and maybe have a little leftover once in awhile. They know what it is to have so many DEBTS and needing to have enough to responsibly PAY for those Debts–like their Children’s Education.

The “People” aren’t so stupid, Bruce, and with enough information about this latest attempt by you at Financial Tom-Foolery–or the “Big Lie,”–most likely will figure you and your Game-Playing out before November 4th, even if apparently Rauner’s banking on thinking the People aren’t so smart to call his Bluff…!

Comment by Just The Way It Is One Monday, Jul 21, 14 @ 8:22 pm
What will IPI, Reboot and company say if Bruce asks the GA to extend the 5% rate? Is 5% acceptable so long as a Republican is for it?

Comment by Anon Tuesday, Jul 22, 14 @ 7:26 am
Rauner says he’d phase out that tax hike over four years, and he’s said he could accomplish this with economic growth. According to the state’s Commission on Government Forecasting and Accountability, income tax revenue growth averaged just 6.8 percent between Fiscal Year 1998 and Fiscal Year 2013. Rauner wants to grow those revenues by almost 67 percent over just four years.
So already he is in la-la land. Jeez.

Comment by howmuchwasthat Tuesday, Jul 22, 14 @ 10:12 am
What most of you are missing is the spending cuts in unnecessary programs and rooting out waste and corruption. Should make a big difference. That’s why this Chicago slush fund investigation is hurting Quinn. $50+ million of our money spent to get reelected does not sit well with voters. Hard to sell yourself as a reformer, too.

Comment by snappydan Tuesday, Jul 22, 14 @ 11:07 am
–What most of you are missing is the spending cuts in unnecessary programs and rooting out waste and corruption.–

Where did you find them?

Comment by wordslinger Tuesday, Jul 22, 14 @ 11:14 am