Latest Post | Last 10 Posts | Archives
Previous Post: Over 100 companies about to lose tax breaks as group calls for crackdown on corporate welfare
Next Post: Blagojevich jury has a question
Posted in:
* Gov. Pat Quinn was on CNBC this week and was asked this question…
You also said the tax increase is temporarily. Can you categorically say taxes come down in four years?
Quinn’s response…
It’s a temporary tax in order to pay off bills that had to be paid off. The fiscally responsible thing to do is pay your bills. I think that’s the only honest way to go. In Illinois, I believe honesty is the only policy. As governor, we’ve been able to show that.
He should’ve started by being honest about the tax hike, which was designed to (mostly) erase the structural deficit and fund a massive, longterm bond plan to pay off overdue bills.
* Yesterday, CME Group Executive Chairman Terry Duffy was on CNBC and was asked about Gov. Quinn’s promise that the tax hike would be temporary…
“I’ve never seen too many taxes that are temporary,” Duffy commented Wednesday.
Illinois has increased its income tax rate just three times in 40 years. One increase was allowed to expire, one was made permanent after a Republican actively campaigned for governor on behalf of making it permanent while his Democratic opponent was against permanency, and now this one.
* The Question: Do you think the General Assembly will pass a bill in four years that will be signed into law making the current income tax increase permanent? Or, will the tax increase sunset, either because the permanency legislation fails or because of a conscious decision to let it go away? Take the poll and then explain your answer in comments.
Also, stick to the question, please. Thanks.
posted by Rich Miller
Thursday, Jun 16, 11 @ 1:09 pm
Sorry, comments are closed at this time.
Previous Post: Over 100 companies about to lose tax breaks as group calls for crackdown on corporate welfare
Next Post: Blagojevich jury has a question
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
If spending is reined in, and the economy is turned around, the state coffers should be flooded with cash, at which time there is no justification for permanency. i can envision a scenario where there are bonds for pensions and debt that exist for some time past four years, and the tax is extended until the bonds come to term.
Now let’s say that spending is not reined in. Budgets will still not balance and the state is a fiasco. Republicans will have taken over the Governor’s office and narrowed the Democrat’s margin in the GA. Extension will be a hot button issue, and will have little chance of passing as voters concentrate on the spending.
Comment by Cincinnatus Thursday, Jun 16, 11 @ 1:19 pm
Will be permanent-State simply won’t be able to afford to let it lapse.
Comment by Downstate Commissioner Thursday, Jun 16, 11 @ 1:20 pm
I think we’ll end up redoing the income tax, sales tax, and putting a graduated income tax on the ballot.
Mathematics won’t allow state spending to relapse to previous levels, and the budgetary pressures only increase in out years.
Comment by Yellow Dog Democrat Thursday, Jun 16, 11 @ 1:23 pm
YDD,
Tax reform? Man, I’m in, but I don’t think we can get it in only four years. I deleted a cry for tax reform from my initial post because of it.
Comment by Cincinnatus Thursday, Jun 16, 11 @ 1:29 pm
Age old story….. It is more important for the government to have money to do “good things” that the citizens. (Who presumably would not do good things with their money)
Comment by Plutocrat03 Thursday, Jun 16, 11 @ 1:35 pm
Since they have not learned their lesson and continue spending money they do not have, they willnot let it lapse if Madigan still controls the house.
Comment by Wumpus Thursday, Jun 16, 11 @ 1:36 pm
===He should’ve started by being honest about the tax hike====
He should’ve started by saying he might not even be the governor when that time comes. Of course they could always pass it during a lame duck session if he doesnt get re-elected. As a matter of fact I think that is the only way a governor will be able to sign a re-up of the tax increase. It will obviously be the main point of contention during the next gov race and unless he is advocating while running I will be tough for whoever is gov to be for it.
Comment by Been There Thursday, Jun 16, 11 @ 1:36 pm
My understanding is that this budget is expected to balance or be about $1 billion less than anticipated revenue. Maybe my calculations are off, but at this rate it’ll take us around 9 years to pay off old bills and 80 to re-fund the pension fund. So, maybe in 89 years we can lower the tax rate again. If we’re lucky enough that tax revenue is boosted by the pickup in the economy, maybe only 40…
Hopefully we can join the rest of the 20th century (albeit 3 generations late) and institute a Progressive Tax structure to help pay down the debt faster.
Comment by danny Thursday, Jun 16, 11 @ 1:37 pm
Since the income tax hike was never sufficient to cover the state’s revenue shortfalls and revenue needs show no sign or diminishing this hike will be permanent. Nevertheless, it remains insufficient and we will necessarily see more tax hikes in the near future regardless of what state officials may claim. They are unavoidable if Illinois is to pay its bills and continue providing services. Delaying the inevitable simply makes the problem bigger and will force even bigger tax hikes.
Comment by Mike Kroll Thursday, Jun 16, 11 @ 1:37 pm
The GA kicked this can down the road for too many years and let the problems get too big. Unless the economy goes into overdrive, I don’t see how they won’t need to hang on to the additional revenue. Nothing is getting cheaper (backlog of bills, pensions, other needs that continue to get squeezed, like higher education). Even if they flatline agency budgets for the next few years, they are going to have to take another vote.
Comment by TwoFeetThick Thursday, Jun 16, 11 @ 1:39 pm
It’s kind of like when they raise the price of groceries because the cost of gas went up. Then the price of gas goes down, but you never see a price decline at the grocery store. We all better get used to paying more and it never going back down.
Comment by Lil Enchilada Thursday, Jun 16, 11 @ 1:55 pm
From the perspective of this year’s budget session, it will be impossible to let this tax sunset. The house barely passed a balanced budget, let alone one that allows paying off old bills. And the governor wants to spend more … same old same old.
Comment by RetiredStateEmployee Thursday, Jun 16, 11 @ 1:59 pm
We’ll still be billions in debt, so I don’t see this going away. It will be interesting to see if a graduated tax as a replacement is brought up in the next primary race for governor.
Comment by Wensicia Thursday, Jun 16, 11 @ 2:13 pm
Agree with Wumpus. If things ever do improve, the smell of taxpayer money just waiting to be spent on noble causes that will gain or impress special interests will be too much of a temptation to pass up.
Comment by JustaJoe Thursday, Jun 16, 11 @ 2:21 pm
The March 2011 study from CGFA FY2012 Economic and Revenue Forecast is pretty clear. With a 2.3% growth rate, FY 2015 new net projects $6,974 and FY 2016 is $2,547. That’s a $4.4B drop off in revenue. Unless the economy really takes off, those decreases mean back to square one and more serious cuts. Taxes look permanent to me.
Comment by zatoichi Thursday, Jun 16, 11 @ 2:23 pm
Quin will veto or AV the gaming bill, the senate will never override or accept, then say the tax increase must be made permanent to make up for the lost gaming revenue. This way everyone who works pays, not just gamblers.
Comment by DE Thursday, Jun 16, 11 @ 2:28 pm
Let’s quit buying into the myth that the House budget is balanced, spends less than the state will take in, or spends less than last year.
The House budget pushes off a billion dollars in Medicaid bills to the next fiscal year. There is nothing balanced about that budget. Yet, between the Senate Democrats and Quinn, it was the most responsible of the three.
Comment by Voice of Experience Thursday, Jun 16, 11 @ 2:45 pm
No idea, can’t answer. Four years is a lifetime.
It’s harder on the state level. The federales have been tax cut crazy for a decade — they still spend like crazy, but just sell more T-bonds and crank up the printing press. That’s what passes for fiscal conservatism in Washington.
Comment by wordslinger Thursday, Jun 16, 11 @ 2:48 pm
@Cincinnattus -
1. Rahm Emanuel and the Retail Merchants Association are already pushing for sales tax “reform”.
2. Without an expansion of the sales tax, municipal revenues around the state are going to continue to dwindle.
3. As the current debate shows, our current corporate income tax rate is unsustainable politically. We will have to close corporate loopholes to bring the overall rate down.
4. I think our current income tax rate is politically unsustainable too, and we will either implement a graduated income tax or a tax on pensions over $75K or $100K to bring the rate down.
5. Dan Hynes nearly won a Democratic primary against Quinn by calling for a graduated income tax. IF Quinn has an opponent, she’ll atleast poll the question, as will Quinn. National polls show taxing millionaires is very popular, especially among Democrats, and new research undermines the claim that the rich will just flee the state.
Comment by Yellow Dog Democrat Thursday, Jun 16, 11 @ 2:54 pm
There’s no shortage of conspiracy theories as to how the GA will go about making the tax increase permanent. The reality is if it is to become permanent, it will take another vote by the GA. And, contrary to popular belief, politicians do not like voting to increase taxes. If they did, they’d do it all the time. And no, votes to directly increase taxes, especially biggies like the income tax, do not happen all the time. If making this increase permanent is necessary, it will have as hard a time passing as it did this time (it only took, oh, twenty or so years).
No one wants to take that vote.
Comment by TwoFeetThick Thursday, Jun 16, 11 @ 2:59 pm
Once bills are paid off, the rest of the money will have essential uses. This includes kayaking czars, raises for state employees, sweetheart deals for big donors, etc.
Doing things like funding human services will continue to be a low priority, since they don’t donate to committees to re-elect.
Comment by Aldyth Thursday, Jun 16, 11 @ 3:02 pm
It makes no difference what the citizens think or want. It is totally in the control of Mike Madigan, just like everything else in this God forsaken state.
Comment by DRB Thursday, Jun 16, 11 @ 3:12 pm
Permanent. They have too many structural problems and the economy won’t recover faster than the increasing bills.
Comment by Retired Non-Union Guy Thursday, Jun 16, 11 @ 3:19 pm
Unless federal Republicans get off their obsession w/ “the debt” and start focusing on jobs, they will destroy the tottering recovery which will be a guarantee that the state tax increase will have to continue and that no reform of state tax structure will occur.
Comment by D.P. Gumby Thursday, Jun 16, 11 @ 3:21 pm
Neither. They’ll add two years to the “temporary” tax increase, thus being able to claim againg that it isn’t a permanent tax increase but still getting the needed revenue to help close the structural deficit for another two years.
Comment by Robert Thursday, Jun 16, 11 @ 3:29 pm
I voted that I thought it would sunset.
I think this “temporary” tax increase is going to be THE topic for the 2014 Gubernatorial race, as well as every state rep and state senate race, in Illinois. While the math doesn’t add up without the tax increase in place, I think politics will rule the day and it will become too hot a potato to handle. Let’s face it, the increase wouldn’t have passed without a good number of retiring or defeated state reps and senators in the first place.
A good candidate would spend the next four years thinking of a realistic plan to allow the tax to sunset and still get the state back on its financial feet. They better start now though because that’s too big a problem to think about in mid to late 2013.
Comment by Nikoli Thursday, Jun 16, 11 @ 3:33 pm
Not quite sticking to the question but it is on topic. A brief summation of the history of the income tax in Illinois:
1969 - Income tax created (Republican governor; Republican GA)
1983 - Income tax temporarily increased (Republican governor; Democratic Senate, Republican House)
1984 - Temporary income tax allowed to expire (Republican governor; Democratic GA)
1989 - Income tax temporarily increased (Republican governor; Democratic GA)
1993 - Temporary income tax increase made permanent (Republican governor; Republican Senate; Democratic House)
2011 - Income tax temporarily increased (Democratic governor; Democratic GA)
Comment by TwoFeetThick Thursday, Jun 16, 11 @ 4:14 pm
Nikoli, any candidate who spends four years thinking about how to let the income tax increase expire and balance the budget will be quite mad by election day. Cognitive dissonance is only tolerable for so long, as studies have proved. One belief or the other will be abandoned, deemed not as important as formerly thought, etc, or the person will become dysfunctional.
Comment by steve schnorf Thursday, Jun 16, 11 @ 5:47 pm
There are many ‘idea’ people who have a ‘need’. All the ‘idea’ people lack is money to meet the ‘need’. However much money is available will be spend to meet the ‘needs’ (and more if it can be found) of the ‘idea’ people.
All of the recent tax increase has already been spent. In addition the Senate has found over more than $400 million in other ‘needs’ already. In four years the ‘idea’ people will have plenty of time to find more ‘needs’.
There is a 100% chance that the income tax increase is here to stay.
Comment by Left Out Friday, Jun 17, 11 @ 8:21 am