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“Rauner opens door to higher income tax rate”

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Illinois

Republican governor candidate Bruce Rauner today opened the door to a potential income-tax hike, saying the 3.75 percent personal rate he would inherit if he wins this fall would be subject to negotiations with a General Assembly that’s expected to remain in Democratic hands.

Rauner, elaborating on the tax plan he unveiled last week, said voters shouldn’t get hung up on short-term budget issues and tax rates. Instead, he said, the overall goal is to make structural changes in state government that would lead to a rollback of the income tax to 3 percent by the end of his first term in office.

In releasing his proposal, Rauner called for a four-year phase out of the 2011 state income tax increase approved by Democrats and signed into law by his general election challenger, Democratic Gov. Pat Quinn. That increase, which bumped the personal rate from 3 percent to 5 percent, is scheduled to roll back to 3.75 percent on Jan. 1, before the next governor is inaugurated.

“Well, I think we’ll work out the specific rate with the General Assembly like we’re going to work out the entire budget with the General Assembly. My personal goal, (the) 3.75 (personal rate) I think is good, but we need to work out the overall plan and how we transition,” Rauner said during a campaign event at a River North restaurant.

“What we need to do is make major structural change over time so we become a growth state again. That’s the critical thing. And here’s what my commitment is. We need to roll the (personal) income tax rate back from 5 percent back to 3 percent where it started within a four-year period and I think 3.75 is a good place to step to next but we’ll work out those details with the General Assembly,” he said. [Emphasis added]

It’s just not possible to immediately get a brand new service tax up and running. No way could businesses comply right away. So you can’t use money from the service tax to plug the second half of this fiscal year’s budget. He’s gotta raise that rate from 3.75 percent. And he all but admitted he’d have to start at five. And that means a post-inaugural vote. And a bipartisan vote at that.

That’ll be fun to watch.

posted by Rich Miller
Monday, Jul 21, 14 @ 4:18 pm

Comments

Mr. Rauner: Please tell us what the state budget would look like if the income tax were 3%. Even assuming you could get the sales tax through, from where would the $7.4 billion in savings come? Please be specific.

Comment by Snucka Monday, Jul 21, 14 @ 4:23 pm
===we’ll work out those details with the General Assembly===

Details schmetails. Rauner’s a big picture guy, he’s not going to get bogged down in the details.

On the other hand, at least he recognizes there’s a whole ‘nother co-equal branch of government he’ll need to win over.

Comment by 47th Ward Monday, Jul 21, 14 @ 4:27 pm
First admission that the Constitution calls for a Legislative branch..Maybe the candidate has a clue..

Comment by NotRMiller Monday, Jul 21, 14 @ 4:29 pm
If he wins, he’ll be quietly hoping for the GA and Quinn to extend the 5% rate during the lame duck session. Not likely.

Comment by Wensicia Monday, Jul 21, 14 @ 4:35 pm
Interesting development.

Let’s be honest… Rauner’s been running the state for months. The chickens and costumes are just what fill the vacuum as the PQ people and media wait for his next move.

Comment by ChinaTown Monday, Jul 21, 14 @ 4:37 pm
It’s time that at least some realism creeps into the Rauner Campaign and the candidate. I’m glad he realizes that the state desperately needs the tax revenue.

I don’t see how a state can be “pro-growth” when its finances are collapsing, which would happen without stronger revenue.

As far as phasing out a future income tax increase, that can be a political battle for another day, just like the current tax increase was a battle this year. What else can we do? At least we would be kicking the can down the road in a more-responsible way.

Comment by Grandson of Man Monday, Jul 21, 14 @ 4:50 pm
A new tax plus not eliminating the income tax increase is a bad idea. A NEW tax of any kind is a bad idea. Once a new tax is established, it will not go away. Keep the income tax at the present rate, and a new tax will not be needed.

Comment by DuPage Monday, Jul 21, 14 @ 4:58 pm
How much buying power was taken away from the citizens of Illinois the past 3 1/2 years? How much buying power is taken away when gas costs $3.50- $4.25?

Comment by Wally Monday, Jul 21, 14 @ 5:00 pm
Wally, do you have a point, or are you asking a serious question? If the latter, you’ll have to be more specific; by inflation or what?

Comment by steve schnorf Monday, Jul 21, 14 @ 5:07 pm
Maybe I have too much of an anti-Rauner bias, but to me his language implies more of a negotiation where he believes he is either an equal to the GA or that he will have the upper hand over the GA.

Even after winning I don’t think he will be in a position of strength vis-à-vis the GA. He MIGHT get there if he learns to effectively horse trade with Madigan or he vetoes enough bills, but he won’t start out equal. I predict a rough first year if Rauner wins the election.

Comment by RNUG Monday, Jul 21, 14 @ 5:08 pm
Bruce Rauner is another name for Jim Edgar-Jim Thomspson: he wants to raise taxes. This is great news for Pat Quinn.

Comment by Steve Monday, Jul 21, 14 @ 5:11 pm
I’m very surprised by this. I figured Rauner would just beat Quinn like a rented mule on the tax increase, then, when he won, claim “things are much worse than I thought” and ask for more money.

The fact of the matter is both candidates are now on record as saying that that the tax hike needs to be extended. And Rauner wants new taxes, to boot.

Didn’t see that coming.

Comment by wordslinger Monday, Jul 21, 14 @ 5:11 pm
Maybe Bruce has a conscience. Doesn’t want to promise what he knows he can’t deliver.

Comment by LIncoln Lad Monday, Jul 21, 14 @ 5:20 pm
===“Well, I think we’ll work out the specific rate with the General Assembly like we’re going to work out the entire budget with the General Assembly. My personal goal, (the) 3.75 (personal rate) I think is good, but we need to work out the overall plan and how we transition,” Rauner said during a campaign event at a River North restaurant.===

“Mike Madigan never had to deal with me.”

“I would say 1/3 of the GOP GA is corrupt”

“Career Politicans”

“Bribed by Union Bosses”

There is no other job, hands down, that will be more fascinating to see being done than the Legislative Liaison positions directly out of the Governor’s Office.

Maybe a close second, maybe, might be “Governor Rauner’s” floor leaders.

One-third of the a Republican General Assembly is corrupt; the Democrats lead by Speaker Madigan, those Career Politicians, and President Cullerton, calling into his district to STOP the original tax from sun-setting…

I have not typed one letter…to the plan… and yet the hurdles seem high.

Comment by Oswego Willy Monday, Jul 21, 14 @ 5:30 pm
Wow…glad we did vote for Mitt in the Crossover orimary….This flip made Big Jim and Blink Jim look honest
He should have never fell for the media taunting about no details…tsk tsk

Comment by circular firing squad Monday, Jul 21, 14 @ 5:30 pm
Smart move by the challenger. Rauner continues to show that he is willing to lead even when he knows his decision won’t be easily accepted. He continues to fill the vacuum Quinn leaves wide open.

Quinn is going to bleed independents and RINOs by displaying a level of realism they’ve been demanding.

Comment by VanillaMan Monday, Jul 21, 14 @ 5:46 pm
===Quinn is going to bleed independents and RINOs by displaying a level of realism they’ve been demanding.===

How, by admitting he is going to try to raise the tax rate the first day he is inaugurated? I bet those Conservatives, and low tax Republicans won’t mind walking away from Rauner.

Quinn will veto any raise if he’s a lame duck. There won’t be enough votes to override that.

So - VanillaMan -, the voters are going to be lemmings to a man whose main campaign themes have been hammer and shake, and now wants cooperation and compromise?

I give you it takes “stones”, but stones sometimes don’t mean votes.

Comment by Oswego Willy Monday, Jul 21, 14 @ 5:55 pm
We also wonder if Mr & Ms Reboot want their cash back from Flip

Comment by circular firing squad Monday, Jul 21, 14 @ 6:13 pm
you got it Steve, the way Thompson and Edgar got whipped. JRT, the longest serving gov in the state’s history and JE, last R to win Cook County and 102 counties. You sure can spot the ones who were easy to beat.

Comment by steve schnorf Monday, Jul 21, 14 @ 6:53 pm
Will conservatives, seeing the handwriting on the wall, just stay home on election day?

Comment by Cheswick Monday, Jul 21, 14 @ 8:43 pm
Trying to get my brain around the pseudo Machiavelliian move here by Brucey. Is he now defining the election as a straight up personality difference between him and Quinn? Is he just assuming that voters don’t want to be bothered with details of budgets and percentages and just want Quinn out? Is he assuming that public employees and public pensioners hate Quinn so much that they’ll hold their nose and vote for Brucey? They did for Blago in 06 and one could argue for Quinn in ‘10.

If Brucey reaches out to the unions next, I’m buying a Harley!

Comment by Now What? Monday, Jul 21, 14 @ 9:12 pm
So Rauner wants to re-enact the temporary tax increase so he can make what’s already going to have gone away go away again?

Comment by Michelle Flaherty Monday, Jul 21, 14 @ 9:32 pm
Only took three days for someone in the press (other than Rich) to finally report this correctly. This is exactly the point 47, soccermom, me and many others made when this tax plan came out. He’s for extending the existing tax and a whole new tax. That should go over big with the base.

Comment by Chicago Cynic Monday, Jul 21, 14 @ 10:17 pm
Michelle, I wish this was one of your excellent snarky comments. However, you perfectly described this goofy paradox.

Comment by Norseman Monday, Jul 21, 14 @ 10:35 pm
Big question- how do his lemmings, such as Ives and Duffy spin this one? They scream about lowering the income tax and letting it expire. How are they going to justify his comments now? This is going to be interesting watching the “new age” Republicans take hold of the Illinois savior.

Comment by DuPage Bard Tuesday, Jul 22, 14 @ 12:11 am
Michelle -

But - and this is very important - Rauner wants you to understand that reinstating the tax hike was not his idea.

PERSONALLY, he would prefer it if the rate schedule went something like this:

2015 - 3.75%
2016 - 3.03%
2017 - 3.02%
2018 - 3.01%

Look, I get it. Policy wise, Rauner really goofed by attacking Quinn for making the tax hike permanent. Math is forcing Rauner to embrace more or less the same policy.

Politically, it could be troublesome.

Five years ago, Quinn thought a temporary tax increase and expanding the sales tax were good ideas. Rather than deny those things, he should admit them.

“Yes, I supported modernizing the sales tax five years ago — business owners across Illinois told me the Rauner Tax would crush small business, which drives job creation, and unlike Bruce Rauner, I listened.”

Might as well own it like you did term limits.

Comment by Yellow Dog Democrat Tuesday, Jul 22, 14 @ 7:19 am
Listen to Mr.Rauner he knows what he talking about he pays less taxes then most everyone if the commercials are true. If true that is on your past government that allows people making so much money to get off by paying less taxes.

Comment by NO SENSE ! Wednesday, Jul 23, 14 @ 8:50 am