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* Greg Hinz…
“There are only a handful of states—Illinois is one of them—that still have the flat tax,” [Rep. Lou Lang] said. “We haven’t seen people leave Silicon Valley” (California has a top tax rate of 13.3 percent) for Nevada, which has no state income tax, he added.
But business flight from a state that already suffers from economic woes is exactly what some business groups are predicting.
“The vast majority of small-business owners pay taxes not at the corporate rate but as individuals,” Illinois Chamber of Commerce President Todd Maisch said in a statement, “Any effort to ‘gouge 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.”
Not so, retorted Sen. Don Harmon, D-Oak Park, who is sponsoring the graduated-tax package in the Senate. Any business owner who reports income of under roughly $750,000 a year would pay less than they pay now, he said. “If you earn more than $750,000 at the end of the year, put it in your pocket, perhaps you’re not so small anymore.”
* In other news, proponents have released the results of a poll taken in January…
If the election were held today, would you vote yes in favor of the following Constitutional amendment or no to oppose it?
“Upon approval of the voters, the proposed Constitutional amendment would allow the state to establish higher tax rates for higher income levels and lower tax rates for lower income levels.”
Total Yes 71%
Total No 27%
Don’t Know/No Answer 2%
Support – Oppose +44
* More…
A recent Tulchin Research survey of 700 likely November 2016 voters in Illinois finds encouraging news for supporters of the proposed “Fair Tax” amendment to the state constitution, which would allow Illinois to adopt a progressive income tax. If the election were held today, the “Fair Tax” amendment would receive the support of seven in ten (71 percent) Illinois voters.
Overwhelming, Broad-Based Support for Fair Tax State Constitutional Amendment
After being read a straightforward description of the proposed amendment to the state Constitution, Illinois voters back the measure by a margin of 44 points, with 71 percent of voters saying they would vote “Yes” on the measure to just 27 percent who would vote “No.” Nearly half of voters (48%) indicate they would definitely vote “Yes” on such a measure, far outpacing the intense opposition (18%) and only two percent of voters are undecided, leaving little room for the opposition to maneuver.Notably, support for the amendment extends across all corners of the state, across the political spectrum, and across gender, ethnic, and generational lines.
• The amendment is supported by 79 percent of voters in Cook County, 70 percent of voters in the collar counties (DuPage, Kane, Lake, McHenry, and Will counties), and by 64 percent of voters in Downstate Illinois.
• The amendment attracts support from 93 percent of liberals, 74 percent of moderates, and even 54 percent of conservatives.
• Strong majorities of women (74 percent) and men (68 percent) back the amendment.
• The amendment is supported by 68 percent of white voters, 86 percent of black voters, and 86 percent of Latino voters.
• The amendment attracts comparable support among voters age 18-54 (74 percent) and those ages 55 and over (69 percent).In the current, highly polarized political environment, it is quite rare to see a policy initiative with support as wide and as deep as this proposed amendment, putting it in a very strong position to win if it is placed on the ballot this November.
In summary, our research finds that Illinois voters strongly support the concept of a progressive income tax. The Fair Tax amendment is very popular with voters across the board and well- positioned to win voter approval should it appear on the November 2016 general election ballot.
Survey Methodology: From January 14-19, 2016, Tulchin Research conducted a telephone survey in Illinois among 700 likely November 2016 voters. The margin of error for this survey is +/- 3.7 percentage points.
As Greg notes above, the Democrats will likely need a Republican vote or three in the House to pass the actual amendment, which will require a three-fifths supermajority. Ken Dunkin voted against the millionaire’s tax, as did Jack Franks and Scott Drury. This is a different animal, however, in that it would cut taxes for people outside the 1 percent.
Convincing Republicans to vote for it won’t be an easy task, to say the least, considering the governor is completely and unalterably opposed.
And, man, the 1 percent is gonna fight back hard if this does make it to the ballot. Maisch’s remarks probably foreshadow the fight, in that we’ll likely see overt threats to move businesses to other states.
posted by Rich Miller
Monday, Apr 18, 16 @ 3:02 pm
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If your income is over $750,000 a year, you should consider yourself pretty lucky! I don’t believe “small” business owners are making that kind of money.
Comment by BBG Monday, Apr 18, 16 @ 3:07 pm
but what this albatross hang well on the necks of GOP candidates who vote against it. in the blame madigan blame rauner fight just got a new twist, its now blame rauner anti-fair tax or support fair tax opponent. and this issue polls better then the failed blame madigan meme.
Rauner and the gop are set to take a big hit on this in the election if they vote against it. quite the maneuver here.
Comment by Ghost Monday, Apr 18, 16 @ 3:08 pm
–[Rep. Lou Lang] said. “We haven’t seen people leave Silicon Valley” (California has a top tax rate of 13.3 percent) for Nevada, which has no state income tax–
If Lou Lang just simply googled a few things before he spoke, he might not sound so ignorant.
http://www.reviewjournal.com/business/economy/study-shows-more-people-are-relocating-nevada
And there is a lot more links and studies where that came from, I’m just being respectful and posting one that came up with a simple google search.
Comment by Ahoy! Monday, Apr 18, 16 @ 3:10 pm
==Maisch’s remarks probably foreshadow the fight, in that we’ll likely see overt threats to move businesses to other states.==
I’m sure destroying employees lives so the boss can save a few bucks in Hoosierville will go over well with voters.
Comment by Precinct Captain Monday, Apr 18, 16 @ 3:10 pm
Proposing this bill at this time of year is going to be inflammatory. Nobody like to pay taxes. The people like 1.4% have so much money that they can easily afford to pay higher taxes without impacting their lifestyle.
Comment by Huh? Monday, Apr 18, 16 @ 3:11 pm
The poll is of the concept, not the policy. If the California brackets were adopted, I suspect most of the people in that poll might change their mind. “Taxing the rich” is sounds great until you find out your taxes are going up if you make over $28,371 a year (using the CA model).
Comment by Nixon_Head Monday, Apr 18, 16 @ 3:11 pm
I am all for a progressive income tax. All in.
Comment by Honeybear Monday, Apr 18, 16 @ 3:12 pm
==- Ahoy! - Monday, Apr 18, 16 @ 3:10 pm:==
If Ahoy! just simply read the articles they linked before they posted, they might not sound so ignorant.
Nothing in that article says anything about graduated versus flat taxes or taxing higher wealth people at a higher rate than the working class.
Comment by Precinct Captain Monday, Apr 18, 16 @ 3:14 pm
Ahoy, that article says retirres are heading to Nevada, not companies.
also small business is plumbers, lawyers, yard maintence, nurserys day are etc. these folks go where there is demand for service, not where the taxes are lowest. a market can only have so many companies before it overstaurates and there is no work, particuarly for restraunts, bakers, butchers, political newsletters etc. your business is where you make money and have customers.
Comment by Ghost Monday, Apr 18, 16 @ 3:18 pm
Yay!
Comment by X-prof Monday, Apr 18, 16 @ 3:20 pm
Well the way you fight this isn’t even that hard IMHO.
Just point out the amendment allows a graduated tax, it says nothing about rates. Today it’s folks that make more than you, tomorrow it’s you.
Comment by OneMan Monday, Apr 18, 16 @ 3:22 pm
Oneman is exactly right. The current Federal income tax was originally setup to only tax the rich. They now effectively get lower rates and the middle class pays higher rates. Do we trust Illinois’ government not to do the same? I don’t.
Comment by Midway Gardens Monday, Apr 18, 16 @ 3:25 pm
For all you progressives out there that think taxes don’t affect behavior: why should Illinois’ richest tax payer Ken Griffen continue to be an Illinois resident? He owns property in Florida. Why shouldn’t he go get a Florida drivers license to avoid paying 9.75%?
Comment by Steve Monday, Apr 18, 16 @ 3:31 pm
- Steve - Monday, Apr 18, 16 @ 3:31 pm:
For all you progressives out there that think taxes don’t affect behavior: why should Illinois’ richest tax payer Ken Griffen continue to be an Illinois resident? He owns property in Florida. Why shouldn’t he go get a Florida drivers license to avoid paying 9.75%?
I wish he would!
Comment by Ratso Rizzo Monday, Apr 18, 16 @ 3:36 pm
The right-wingers that are against this were dealt a weak hand. All proponents have to do is point out that families can’t afford to send their kids to college because Rauner took home a $750,000 tax cut. You can insert kids with autism, seniors who don’t have enough to eat, and a multitude of other examples as well. It’s that simple. GAME OVER.
Comment by Bull Moose Monday, Apr 18, 16 @ 3:38 pm
Ahoy:
Here is an article about COMPANIES leaving California for Nevada & Texas due to high taxes and over-regulation.
http://www.nationalreview.com/article/426974/businesses-leave-california-texas
Comment by BIG R. Ph. Monday, Apr 18, 16 @ 3:40 pm
==Notably, support for the amendment extends across all corners of the state, across the political spectrum, and across gender, ethnic, and generational lines.==
Trying to remember the last time anyone has been able to say that … about anything.
Comment by Fusion Monday, Apr 18, 16 @ 3:44 pm
It would be nice to have a conversation on taxes without the standard “people are gonna leave” talking points coming out of the woodwork.
Guess what people. Taxes are eventually going to increase. I’d rather talk about the best way to do that rather than engage in a talking point war.
Comment by Demoralized Monday, Apr 18, 16 @ 3:46 pm
Steve, residency requirements are not just as simple as owning property and getting a driver’s license. If it were, and Ken weren’t already a FL resident, he’d be doing himself a huge disservice, considering they have no state income tax.
Comment by Notorious RBG Monday, Apr 18, 16 @ 3:51 pm
It’s not just California. Georgia and Tennessee have 6% top rates. North Carolina 5.75%. Wisconsin 7.65%. Minnesota 7.85% if you make over $150k, 9.85% if you make over $250k. And the Twin Cities’ unemployment rate is one of the lowest in the country–below 4%.
The “they’re gonna leave” narrative is a classic zombie argument with no factual backup.
Comment by Gerson Monday, Apr 18, 16 @ 4:02 pm
==The poll is of the concept, not the policy. If the California brackets were adopted, I suspect most of the people in that poll might change their mind. “Taxing the rich” is sounds great until you find out your taxes are going up if you make over $28,371 a year (using the CA model).==
With the flat tax, as it stands now, my taxes are most likely going up when and if we ever pass a balanced budget, right? If the California model means, they may go up slightly less, I’m all for it.
Comment by Matt Monday, Apr 18, 16 @ 4:04 pm
Precinct Captain & Ghost,
You got me, the article I posted does not specifically call out that the graduated income tax for the reason people are leaving California for Nevada, only the lower taxes in Nevada and that people from California are leaving for Nevada, which our illustrious representative said wasn’t happening. If you google outmigration from California to Nevada there are only 18 million results, have fun!
Also, I’m not doing your research for you on specific companies that left California for Nevada for specifically a graduated income tax. I understand that not having this very specific information allows you to justify your opinion, but my guess is (and this is only a guess) that you have an entrenched opinion and I’m not going to change it.
Let me say this, I’m all for a graduated tax at the federal level and I believe taxes on the rich should be higher and that the Capital Gains tax should mirror the progressive income tax. But, Illinois is already loosing wealth as more educated and higher earning people become more mobile. We have a bad business climate and a terrible reputation that is even worse than our business climate actually is. Now is not the time to give wealthier people even more reason to leave. And facts do show, people are leaving higher tax states for lower tax states.
Also, business locate where talent is, so the more educated & higher earning people leave, the more businesses are going to be locating where they are going. It’s actually rare that a business will leave, they will most likely just expand elsewhere and keep employment stagnant or declining at a current facility.
Comment by Ahoy! Monday, Apr 18, 16 @ 4:05 pm
Can they over-ride the governor’s veto prior to Jan ‘17?
Comment by Mama Monday, Apr 18, 16 @ 4:08 pm
so Graduated tax is a tax that went to college…..
Comment by Ghost Monday, Apr 18, 16 @ 4:09 pm
The CA would not set up a graduated rate, it would allow the GA to do so.
Comment by titan Monday, Apr 18, 16 @ 4:11 pm
It is fairly simple. We know taxes will increase. Rauner wants a service tax. Do you want Rauner’s service tax or a tax increase on those who can most afford it?
Comment by A Jack Monday, Apr 18, 16 @ 4:14 pm
Maisch already sold his credibility to the highest bidder. I wouldn’t expect him to be anything other than a high paid shill from this point forward.
To bad he sold all of the Chamber’s companies’ credibility in the process.
Comment by Joe Bidenopolous Monday, Apr 18, 16 @ 4:18 pm
If taxes determine residence, then explain why New York City which has both a state and a city income tax keeps growing, while Chicago doesn’t? Why doesn’t Ken Griffen live in Florida now? He’d be saving his 3.75% state income tax already
Comment by Truthteller Monday, Apr 18, 16 @ 4:19 pm
== Oneman is exactly right. The current Federal income tax was originally setup to only tax the rich. They now effectively get lower rates and the middle class pays higher rates. Do we trust Illinois’ government not to do the same? I don’t. ==
You can guard against that by specifying a spread between the bottom rates and top rates without naming specific rates. Something like the the second quadrant marginal rate must be one and a half times the lowest rate, the third quadrant marginal rate two and a half times the lowest rate and the maximum marginal rate must be four times the lowest rate. That would mean if the lowest is 3%, the second quadrant would be 4.5%, the third quadrant would be 7.5% and the top rate 12%.
That would be somewhat similar to how the corporate rate today is tied to the personal rate without specifying a particular rate.
Comment by RNUG Monday, Apr 18, 16 @ 4:33 pm
Ahoy:
So are you saying that any revenue the state generates should absolutely not be done with any sort of increased taxes on the wealthy or businesses. Since the revenue has to come from somewhere you want to tell us where you would like it to come from since you seem to think that the wealthy and businesses are off limits? Taxes are going up. So, if you want to protect the wealthy and businesses then that means you and I are going to be the ones bearing the burden entirely.
Comment by Demoralized Monday, Apr 18, 16 @ 4:34 pm
Anyone go to the 2 cent lunch a couple weeks ago? At a 2% profit margin, a business would need $50,000,000 in sales to achiever $1,000,000 in profit.
Comment by Robert the Bruce Monday, Apr 18, 16 @ 4:37 pm
Earnest question out of ignorance. Is the $750,000 gross revenue for an single owner small business filing as an individual? Or is is net profit? If it’s the former, than depending on profit margin, that person with $700,000 gross revenue could be decidedly middle class, particularly if they live in Chicago proper and pay employment taxes and provide healthcare for a couple employees. But if it’s $750,000 profit, then yeah, they can afford it. Can someone clarify for me? Thanks!
Comment by 'Goose Monday, Apr 18, 16 @ 4:48 pm
Steve @ 3:31 ==For all you progressives out there that think taxes don’t affect behavior: why should Illinois’ richest tax payer Ken Griffen continue to be an Illinois resident? He owns property in Florida. Why shouldn’t he go get a Florida drivers license to avoid paying 9.75%?==
And how much should we care, because he’ll still have to pay 9.75% on his income from Illinois?
Comment by Whatever Monday, Apr 18, 16 @ 4:50 pm
==Maisch’s remarks probably foreshadow the fight, in that we’ll likely see overt threats to move businesses to other states.==
No worries. Maisch has his guy, Ken Dunkin, in his corner.
Together, they’ll fight the good Maisch/Dunkin fight.
I mean, how can you question the credibility of an Illinois State Chamber of Commerce honcho who just last month was telling the state that re-electing Ken Dunkin was critical to our future?
Comment by wordslinger Monday, Apr 18, 16 @ 6:00 pm
Rnug - that doesn’t work. On paper the federal tax rate is much higher for top earners. It’s that their earnings from dividends, carried forward interest, tax shelters, etc. mean though we on paper a progressive tax scheme, in reality it’s anything but.
Comment by Midway Gardens Monday, Apr 18, 16 @ 6:22 pm
- Ahoy! - Monday, Apr 18, 16 @ 4:05 pm:
The exact phrase “outmigration from California to Nevada” gives 14.5 million results. Were you using the Rauner Math?
https://www.google.com/search?q=outmigration+from+California+to+Nevada&oq=outmigration+from+California+to+Nevada&aqs=chrome..69i57&sourceid=chrome&ie=UTF-8
Comment by Precinct Captain Monday, Apr 18, 16 @ 7:18 pm
To - Whatever -
And how much should we care, because he’ll still have to pay 9.75% on his income from Illinois?
If he isn’t a resident of Illinois : he no longer has to pay a state income tax to Illinois…. even if his business is in Illinois.
Comment by Steve Monday, Apr 18, 16 @ 8:01 pm
Again we can trust any of these “models”. Want to change the system - get all the current players out. Enough of their games.
FYI I have a good amount of contact with people who left CA for Nevada. Vegas and Reno have exploded - no one method project this exactly - a lot people have two “homes” as well
Comment by cannon649 Monday, Apr 18, 16 @ 8:31 pm
Steve @ 8:01 — Maybe you ought to read some of the law before you tell us what it says. You could start with Section 304(a) of the Illinois Income Tax Act, which begins:
“The business income of a person other than a resident shall be allocated to this State if such person’s business income is derived solely from this State. If a person other than a resident derives business income from this State and one or more other states, then . . . such person’s business income shall be apportioned to this State by [one of several formulas that I will let you read for yourself].” Or you could just check out the Schedule NR for the Illinois 1040, which tells nonresidents how to report how much of their income is taxed.
Comment by Whatever Monday, Apr 18, 16 @ 8:53 pm
==Also, business locate where talent is, so the more educated & higher earning people leave, the more businesses are going to be locating where they are going. It’s actually rare that a business will leave, they will most likely just expand elsewhere and keep employment stagnant or declining at a current facility.==
I think you just proved Lang’s point. There’s a reason why companies remain in Silicon Valley (or Illinois) for that matter. If the analysis was a simple as you want to make it we’d see corporations fleeing in droves for Florida and Nevada. Since you’re into research why don’t you use the Google to identify the largest industries in each state and then get back to us.
Comment by Pundent Monday, Apr 18, 16 @ 9:21 pm
If a flat tax is so great then the majority of the states would be doing it - wouldn’t they? Of the 41 states that have an income tax, 34 states have a progressive state income tax structure. 8 states, including Illinois, have a single rate income tax. Those against a progressive tax structure might have a better argument that Illinois’s flat tax is right - IF Illinois had its finances in order. Illinois’ 20 years of a 3% rate, followed by 4 years of a 5% rate, followed by the current 3.75% tax, has not worked.
Comment by Joe M Monday, Apr 18, 16 @ 10:37 pm
–FYI I have a good amount of contact with people who left CA for Nevada. Vegas and Reno have exploded - no one method project this exactly - a lot people have two “homes” as well–
It’s so easy when you just make it up.
Las Vegas Sun, 3-26-16
–WASHINGTON — Ten U.S. states — Nevada among them — still have not regained all the jobs they lost in the Great Recession, even after six and a half years of recovery, while many more have seen only modest gains.–
http://lasvegassun.com/news/2016/mar/26/job-totals-trail-pre-recession-levels-in-nevada-9/
Comment by wordslinger Monday, Apr 18, 16 @ 10:37 pm
They might still have a democratic governor if they proposed something like this instead of the temporary 67 percent income tax on every Illinois taxpayer in 2011.Too little too late Lou Lang.
Comment by Lucky Pierre Monday, Apr 18, 16 @ 11:43 pm
Illinois has the 4th highest tax burden right now. People are fleeing the state in droves. So let’s increase taxes! Hey genius’s of Illinois government, ever think of eliminating public sector, jobs, benefits, programs, and spending?
Comment by Tone Tuesday, Apr 19, 16 @ 9:00 am
Illinois has not regained the jobs lost either. AND we are losing population faster than any other state in the country. The highest taxes in the nation will certainly help, right?
Comment by Tone Tuesday, Apr 19, 16 @ 9:01 am
–Illinois has not regained the jobs lost either.–
Tone, that is not correct. Apparently, reaching the sixth paragraph of the provided link was too much for your attention span.
Is it the fourth highest tax burden in the nation, as you said at 9 a.m., or the highest in the nation, as you said at 9:01 a.m.?
Did the voices in your head change their minds in those sixty seconds?
Feel free to provide links to your claims at any time, or even once. Voices in head don’t count.
Comment by wordslinger Tuesday, Apr 19, 16 @ 9:40 am
Over 100,000 people fled Illinois last year. Almost 90,000 fled the state in 2014. I’m sure if we just keep doing what Madigan has been doing for decades. Everything will be just fine.
Comment by Tone Tuesday, Apr 19, 16 @ 9:52 am
No real point in a graduated rate. All IL citizens will have to pay their fair share. Make the income tax 7.5%. Have that apply to all retirement income up until 65, then half that rate for those older than 65.
Comment by Robert the 1st Tuesday, Apr 19, 16 @ 9:52 am
http://www.bls.gov/regions/midwest/illinois.htm#eag
Illinois is an economic basket case.
Comment by Tone Tuesday, Apr 19, 16 @ 9:53 am