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“The straw that breaks the Illinois economy’s back”

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* Background is here. From the governor’s office…

Hi, Rich –

The majority party’s desire to skyrocket taxes is breathtaking. A progressive income tax would be the straw that breaks the Illinois economy’s back – sending our state even further into the economic doldrums. It’s beyond time for Democrats to come to the table and work with the governor to find common ground on real structural reforms that will get our economy moving in the right direction.

Best,
ck

Um, proponents claim it’ll reduce taxes for 99 percent of taxpayers, but the 1 percent will most definitely be upset.

The question will be if the Democrats can successfully portray this as a broad tax cut, or if cynical voters will just assume everybody’s taxes will rise. Rauner will obviously do his best to ensure the latter.

…Adding… As if on cue…

Today, Democrat state Rep. Lou Lang introduced a bill he said would increase taxes in Illinois by $1.9 billion. This comes just one week after Senate President John Cullerton proposed tracking Illinois drivers to tax them by the mile, and on the heels of news Illinois lost 105,000 residents on net to other states in 2015 – the largest exodus in state history.

The Illinois Policy Institute is staunchly against this tax increase proposal. CEO John Tillman issued the following statement in response:

“If Illinois Democrats were as creative on pension, economic and labor reform as they are on taxes, Illinois’ budget crisis would be solved by now. Instead, they resort to the same old tactic over and over again: Raise taxes, waste money, delay reform, raise taxes again.

“State Rep. Lou Lang’s proposal to increase taxes by $1.9 billion sends a clear message: Democrats want hard-working taxpayers to pay for their ineptitude. It’s doubly offensive because this proposal comes at a time when lawmakers have not even passed a state budget. How can they tell taxpayers they need more money without offering them an idea of how this money will be spent?

“Remember that in 2014, lawmakers attempted to implement a so-called ‘fair tax,’ which they claimed would only increase taxes on the ‘rich.’ The reality was the 2014 proposal would have increased taxes on anyone with more than $22,000 in taxable income. Rightly, this tax increase was rejected. Now the same crew of tax-hikers has come out with a new proposal they say will only raise taxes on those with more than $500,000 in income – but we know their real motive. They are trying to implement the same old tactic, just with a different sales pitch this time.

“We know from Illinois’ own history that tax increases will not solve Illinois’ persistent financial problems. In 2011, Democrats enacted a tax increase that raised $31 billion in taxpayer dollars over five years. They claimed the cash infusion would help pay down the state’s backlog of bills and restore Illinois’ fiscal health. Instead, 90 cents out of every $1 from the tax increase went to pensions – a pension system these same Democrats refuse to reform.

“Illinoisans already pay the second-highest property taxes in the nation, the high sales taxes, high income taxes and are facing an increase to the highest gas taxes in the nation. Businesses that employ taxpayers face steep barriers to success. Now the Democrats are proposing yet another tax increase to pay for their unwillingness to reform our state. It’s time for lawmakers to stop turning to taxpayers to bail them out, and to step up and enact the serious reforms this state needs.”

…Adding More… Illinois Chamber President and CEO Todd Maisch…

The Illinois Chamber is adamantly opposed to a plan for a graduated income tax envisioned in legislation which was introduced today. The plan would punish small business owners and would accelerate the documented flight of high net worth individuals out of our state.

The vast majority of small business owners pay taxes not at the corporate rate, but as individuals. Thus, any effort to “gauge the rich” is actually putting a target squarely on the backs of small businesses, the very entities we count on to provide the majority of new jobs in Illinois. Punishing successful businesses with higher taxes is a sure way to result in fewer of them in Illinois. Individuals with higher net worth are our citizens who are most able to move their success to other states. We are confident that if this plan were ever to become law, it would not generate anywhere near $1.9 billion for Illinois, but would generate millions in revenue for more welcoming states.

posted by Rich Miller
Friday, Apr 15, 16 @ 2:46 pm

Comments

No, No, No! Only my “reforms!”

Comment by Anonymous Friday, Apr 15, 16 @ 2:49 pm
As much as I dislike Lang (pretty much all the dislike I have for Madigan without any of the grudging respect), he/this deserves support. The flat tax is at the root of an awful lot of this state’s woes. We can’t replicate California, but note that they have truly “turned around” their financial crisis, largely by soaking the rich. All we’re asking here is for some light drizzle.

Comment by lake county democrat Friday, Apr 15, 16 @ 2:50 pm
Hi CK-
Everyone I know has already stopped caring about anything the governor says.
Best,
DL

Comment by Ducky LaMoore Friday, Apr 15, 16 @ 2:50 pm
===It’s beyond time for Democrats to come to the table and work with the governor to find common ground on real structural reforms that will get our economy moving in the right direction.===

Hi, ck-

I know “structural reforms” means decimating unions. You can type decimating unions, if you want.

Cool? Cool.

Thanks!
ow

Comment by Oswego Willy Friday, Apr 15, 16 @ 2:52 pm
And here comes the Ron Popeil Word Salad Shooter.

Geez, make an effort. Can you work in “croutons” or “blue cheese” into any of these statements?

Comment by wordslinger Friday, Apr 15, 16 @ 2:52 pm
I’m starting a new game. A quarter goes in the jar every time someone says “structural reform.” I’ll have Illinois out of this mess in a week.

Comment by Demoralized Friday, Apr 15, 16 @ 2:54 pm
It is tax time. People should have their taxes handy. Set up a website, let people input their current figures and see what they would pay under this plan. Let 99% of all people see that this would benefit them. Then let IPI bray all they want.

Comment by What the What Friday, Apr 15, 16 @ 2:54 pm
To the Update,

What’s next, IRN will do a “report” on Rauner fightin’ a hefty tax increase?

Rauner is purposeful in hurting Illinois, and the premise that any of this will end with Rauner’s cold heart finally breaking is folly.

Leader Durkin,

If you’re true to your word, you know where I’ll be.

OW

Comment by Oswego Willy Friday, Apr 15, 16 @ 2:55 pm
==”Um, proponents claim it’ll reduce taxes for 99 percent of taxpayers, but the 1 percent will most definitely be upset.” ==

Since this tax change helps 99% of the taxpayers, lets pass this bill today, & move on to more important issues like saving higher ed & the safety net programs the taxpayers need!

Comment by Mama Friday, Apr 15, 16 @ 2:56 pm
Who won the pool on the length of time it would take for the frat crowd to issue their rhetorical response?

Comment by Norseman Friday, Apr 15, 16 @ 2:56 pm
Also show how much the Governor’s taxes would go up so people can understand why this proposal is so “breathtaking” to the Governor.

Comment by What the What Friday, Apr 15, 16 @ 2:58 pm
– Now the same crew of tax-hikers has come out with a new proposal they say will only raise taxes on those with more than $500,000 in income –

Um, no the legislation says it

- How can they tell taxpayers they need more money without offering them an idea of how this money will be spent? -

perhaps on college students, children who have been sexually assaulted, homeless youth, drug treatment, and the many other services not funded because of the budget impasse you pretend to be worried about.

Comment by Bull Moose Friday, Apr 15, 16 @ 3:00 pm
>A progressive income tax would be the straw that breaks the Illinois economy’s back

A straw would be a much lighter load for Illinois than destruction of its higher education and human service systems.

Comment by Earnest Friday, Apr 15, 16 @ 3:00 pm
Straightforward and well developed pieces will be needed in order to make sure this proposal isn’t sabotaged by Rauner & Co. LLC.

$1.9 Billion is huge, and it ain’t coming from the backs of the majority of the taxpayers in Illinois and that needs to be made VERY clear!

Show the taxpayers how much Rauner and his friends benefited from the rollback of the 5% tax. How many “average” taxpayers does it take to make up what he was able to keep?

Fake Almost Any ILGOPer in the legislature - “We don’t have the money.”

This way (progressive tax), we could!

Comment by Anon221 Friday, Apr 15, 16 @ 3:02 pm
>higher taxes on job creators

Somehow I don’t think they’re referring to the people who run businesses that are parts of local communities and rely on good customer service and retaining good employees. Rauner, for instance…in his business experience did he build more companies and jobs or eliminate them?

Comment by Earnest Friday, Apr 15, 16 @ 3:04 pm
– How can they tell taxpayers they need more money without offering them an idea of how this money will be spent? –

Well, we could look at the budget to assess spending priorities!

Oh. Oh, we can’t. Dang.

Comment by illini97 Friday, Apr 15, 16 @ 3:04 pm
Ck -

How do you sleep at night?

Seriously, Gov. Rauner, I am not comfortable with your rhetoric, your politics, your supposed compassion. I currently fall in the 99%, but wouldn’t have a problem if my taxes raised to 5% - as long as we don’t let you decide where to spend it.

Comment by Thoughts Matter Friday, Apr 15, 16 @ 3:06 pm
”They claimed the cash infusion would help pay down the state’s backlog of bills and restore Illinois’ fiscal health. Instead, 90 cents out of every $1 from the tax increase went to pensions – a pension system these same Democrats refuse to reform.”

Since when is paying what you owe a bad thing. I believe it is the ISC, not democrats who refuse to “reform” the pensions, but why worry about the truth in a propoganda piece?

Comment by Ole' Nelson Friday, Apr 15, 16 @ 3:07 pm
Even the governor knows taxes have to go up. He has said as much; he just wants to extract some of his agenda to give the Ds the “privilege” to raise taxes (so he then can use that as fodder for TV ads paid for with his dark money).

To be fair, I’d love to see exactly how much money each of his TA items will generate and, importantly, whose pocket that theoretical windfall ends up in.

The irony of ck’s predictable empty response, of course, is that if the gov gets his TA, taxes will rise anyway.

Comment by Decaf Coffee Party Friday, Apr 15, 16 @ 3:11 pm
If Rauner and the esteemed Institute could convince me that their “structural reforms” would either grow the state’s economy enough to produce anywhere near $1.9 billion, I would pay attention. But to date, it’s just empty rhetoric.

Repeatedly saying “structural reforms” doesn’t mean they’ll work.

Comment by Sir Reel Friday, Apr 15, 16 @ 3:14 pm
Might hurt “small business owners” like hedge fund managers.

(I say this as an actual small business owner)

Comment by ChicagoVinny Friday, Apr 15, 16 @ 3:16 pm
“…a pension system these same Democrats refuse to reform”

Tier 2 was a huge pension system reform passed by the GA and signed by Governor Quinn. The 5% income tax would have helped the state pay the debt that was generated by many years of pension holidays. But the real structural reform needed is a
progressive income tax which most states already have.

Comment by Enviro Friday, Apr 15, 16 @ 3:17 pm
Both sides know taxes HAVE TO increase. The question is who pays the increase. Show what has happened in Kansas. Show what has happened in Minnesota.

Comment by What the What Friday, Apr 15, 16 @ 3:18 pm
Indiana and Wisconsin: now is you opportunity to become no income tax states. You can’t lose. Right to work plus no state incomes tax next store to union dominated Illinois will be a godsend for your states.

Comment by Steve Friday, Apr 15, 16 @ 3:19 pm
Oh - Steve -, lol

Wisconsin just temporarily lost RTW.

Please, keep up.

It embarrasingly when your Raunerbot points are updated, I get it.

Comment by Oswego Willy Friday, Apr 15, 16 @ 3:23 pm
I am with Chicago vinny . It would cut my taxes . So stop hiding behind me

Comment by illinois manufacturer Friday, Apr 15, 16 @ 3:23 pm
=I believe it is the ISC, not democrats who refuse to “reform” the pensions, but why worry about the truth in a propoganda piece?=

@Ole Nelson

Thank you. I was about to type the same response to this tripe.

Comment by MSIX Friday, Apr 15, 16 @ 3:32 pm
The usual suspects saying what we usually suspect of them.

Comment by Northsider Friday, Apr 15, 16 @ 3:32 pm
==proponents claim it’ll reduce taxes for 99 percent of taxpayers==

Naomi Jakobsson and Don Harmon said many things about their ==progressive== and ==graduated== tax plans as well.

Comment by Formerly Known As... Friday, Apr 15, 16 @ 3:34 pm
For whom would taxes “skyrocket”? The IPI/Hedge Fund crowd? Good deal. The rest of us will do just fine, thank you.

Comment by MSIX Friday, Apr 15, 16 @ 3:36 pm
“A progressive income tax would be the straw that breaks the Illinois economy’s back.”

How?

And please list all states that have their backs broken from progressive income taxes.

Thanks!
S

Comment by steward Friday, Apr 15, 16 @ 3:42 pm
@Stever, baby you crack me up!! Seriously, I mean I am in stitches big guy!

Wisconsin skipped debt payments and borrowed to pay other bills recently and now you want them to drop the state income tax?

I love your plan top destroy Wisconsin but c’mon babe, they are our neighbor, let’s be kind to them.

Wait a second…….are you serious about that stuff? Wholly Moses! Cuckoo for cocoa puffs!

Comment by JS Mill Friday, Apr 15, 16 @ 3:42 pm
This is precisely what voters supported via non binding referendum when the plutocrat Rauner was elected.

Comment by Jack Aubrey Friday, Apr 15, 16 @ 3:43 pm
Here we go again with the poor old “small business owners”. I somehow don’t think it would be a terribly difficult task to incorporate appropriate credits for small business folks in order to treat them fairly in a graduated income tax plan. You have about worn out this particular red herring, GOP.

Comment by Skirmisher Friday, Apr 15, 16 @ 3:44 pm
Hi Todd, small business owner here. I like the plan. Thanks, DL
p.s. What percentage of small business owners make more than $750,000?

Comment by Ducky LaMoore Friday, Apr 15, 16 @ 3:46 pm
9.75% would be the 4th highest state income tax rate in America.

Quite an increase from 3.75% in 2016, and an even larger increase from 3.00% in 2010.

Comment by Formerly Known As... Friday, Apr 15, 16 @ 3:47 pm
Thirty four out of fifty states have progressive income taxes including that shining example of all things great, Wisconsin. Since a tax hike is coming no matter how much we don’t want it, the progressive tax might be best for the future of the state.

Comment by STILL WATERS Friday, Apr 15, 16 @ 3:50 pm
==How do you sleep at night?==

Many ask the same about Speaker Madigan.

Substitute his name for Gov Rauner’s in the rest of that comment, and it describes what many people feel about him as well.

Comment by Formerly Known As... Friday, Apr 15, 16 @ 3:54 pm
Todd, this tax plan would actually help my small business. I don’t make $750k per year, but when I do I’ll pay the taxes and be happy.

Comment by Trolling Troll Friday, Apr 15, 16 @ 3:54 pm
All this discussion is putting the cart before the horse. Let’s put the constitutional amendment on the ballot and let the voters in November decide if Illinois should have a graduated income tax. Then we can argue about rates. But I’m guessing Rauner, AFP, the Chamber and all the other opponents don’t want to even let the voters have that vote. That’s how the Democrats should frame this issue initially, that it is giving the voters the choice and then once it’s on the ballot make the case for why there should be the graduated income tax. It would be interesting to hear the Republican opposition to simply putting the amendment on the ballot because you can be against the tax and for letting there be the vote in November.

Comment by MyTwoCents Friday, Apr 15, 16 @ 3:57 pm
Serious question: If Rep. Lang’s proposal were to be enacted, couldn’t high bracket S-Corps change to C-Corps and pay the 5.25% corporate rate?

Comment by SAP Friday, Apr 15, 16 @ 3:57 pm
ck,

Please pass along to Bruce, since he doesnt have email.

In the last election an overwhelming majority of Illinois residents DEMANDED draconian cuts in Wealthy Welfare. What are you and Bruce doing about this?

Thanx!
Jack

Comment by Jack Stephens Friday, Apr 15, 16 @ 4:00 pm
=9.75% would be the 4th highest state income tax rate in America.

Quite an increase from 3.75% in 2016, and an even larger increase from 3.00% in 2010.=

And yet couples earning up to $200,000 would pay less than now…that would include a pretty good chunk of IL taxpayers, right? Probably means more to those people than the Turnaround Agenda that benefits…well, I don’t know who it benefits.

Comment by Decaf Coffee Party Friday, Apr 15, 16 @ 4:00 pm
Hi,ck-
Is it becoming humiliating to be a puppet on a string? Could you at least ask BVR to change up the wording? Structural reform could become decimate the middle class. It’s more on target and certainly more honest.
Best,
fm

Comment by Flynn's mom Friday, Apr 15, 16 @ 4:08 pm
ironic thoughts.

Rauner made $58m in 2014. As a job creatin’ millionaire, he created how many jobs?

(I really don’t think high equity peeps with massive passive income like to mess with employees.)

Comment by cdog Friday, Apr 15, 16 @ 4:15 pm
Kansas, led by another practitioner of the debunked and failed art of supply-side economics, is skipping their pension payment.

Comment by cdog Friday, Apr 15, 16 @ 4:18 pm