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A bipartisan group of legislators came together, and last week presented the governor and legislative leaders with a menu of options for getting to a balanced budget.
One of them — Senator Donne Trotter, a Chicago Democrat — says, as has previously been reported, that it calls for raising the state income tax from 3.75 percent to 4.85 percent, a corporate tax hike, closing corporate loopholes and a expanding the sales tax base. […]
“We’re looking at a beverage tax, which some have called a sugar tax or the pop tax, which would bring in approximately $375 million.” Trotter also says the package contemplates gambling expansion.
“Also on the table is that old standby of looking at the possibility of bringing gaming, or to expand gaming here in the state of Illinois,” Trotter said Sunday on WGN radio’s “Sunday Spin” program.
posted by Rich Miller
Monday, May 16, 16 @ 10:58 am
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I’m not sure why 4.85 percent is the magic number, when they also need to nickle and dime several other taxes through. I think it would be easier to raise the income tax higher, at least to 5 percent, if that means you don’t have to raise another tax.
And a gambling bill getting done in the next three weeks? Anything is possible I guess, but I’d go with the over on that wager.
Comment by 47th Ward Monday, May 16, 16 @ 11:12 am
If I were a legislator, the last tax I would raise for be on soda or sugar beverages. Everyone drinks them and could I think of some very creative mail pieces against it. This isn’t happening.
Comment by Tom Monday, May 16, 16 @ 11:17 am
===Everyone drinks them===
Not everyone.
Comment by Rich Miller Monday, May 16, 16 @ 11:21 am
I assume a sugar tax is the newest “sin tax?”
Why not hit up the e-juice for vaping, too?
Comment by illini97 Monday, May 16, 16 @ 11:26 am
What we need is a three year temporary 1.5% tax hike to pay off back bills and then live with in the present tax.
Retirees would not be exempt from this tax although if they did pay state income tax on other income that would be credited against that 1.5% temporary surtax.
It is my understanding that the present reduction from 5.0 to 3.75 meant an annual $2 billion decline in revenue. If so the 1.5% i have proposed would add about $2.5 billion a year for the next three years to pay off back bills.
In my opinion this is a reasonable compromise and approach and it does not extend beyond Rauner’s term so he would have total control to see that it was expended as designed.
Comment by Federalist Monday, May 16, 16 @ 11:27 am
Cue debate between “pop” and “soda”…
Comment by Anonymous Monday, May 16, 16 @ 11:30 am
Soda Sounds like the same gimmick that get thrown around every year about this time. When they tack on the satellite tax we’ll know it’s a smoke screen.
Comment by Thunder Fred Monday, May 16, 16 @ 11:30 am
More importantly: how will the “pop tax” label impact the debate over wether “soda” or “pop” is th current term to describe your favorite carbonated corn syrup refreshment?
Comment by BK Bro Monday, May 16, 16 @ 11:30 am
With some of the worst job growth in the nation. Illinois definitely needs higher corporate taxes. That will surely draw in more job creators.
Comment by Tone Monday, May 16, 16 @ 11:31 am
can’t believe timid legislators will pass pop tax.
Comment by jim Monday, May 16, 16 @ 11:32 am
Would the soda tax be collected at the consumer level or do we just send the notification to ADM?
Comment by illini97 Monday, May 16, 16 @ 11:33 am
This agreement seems to be very heavy on tax increases. My hope is that if these taxes do happen, that the money is used to actually fix the problems of the State and not used to pay for state employee pensions like the 2011 tax hike did.
Comment by Anonymous Monday, May 16, 16 @ 11:33 am
this is not going to happen, at least not before the election..zero chance before 5/31
Comment by Not Rich Monday, May 16, 16 @ 11:37 am
Don’t forget to extend the sales tax to advertising revenue and legal fees.
Comment by 13th Ward Monday, May 16, 16 @ 11:44 am
Democrats excel at ideas for taxation and Republicans at saying no. Meanwhile the situation becomes more and more dour.
Comment by cgo75 Monday, May 16, 16 @ 11:44 am
===My hope is that if these taxes do happen, that the money is used to actually fix the problems of the State and not used to pay for state employee pensions like the 2011 tax hike did.===
So the $100 million plus in unfunded pension liability is NOT one of the state’s problems?
If I wrote that dribble, I’d stay anonymous too.
Comment by 47th Ward Monday, May 16, 16 @ 11:44 am
A no brainer is allowing slots at Arlington Park and Fairmont. Regenerate the Illinois horse racing industry and add significant State revenue.
Comment by Anonymous Monday, May 16, 16 @ 11:44 am
===“Also on the table is that old standby of looking at the possibility of bringing gaming, or to expand gaming here in the state of Illinois,”===
The thing that gets me about this is that gambling typically shows a net negative social benefit and while providing revenue can do so in a fashion that is not typically economically efficient.
However — The Southern Illinois Casino and Conference Center idea would be interesting to see happen for the folks that like Schadenfreude.
Comment by Anon Monday, May 16, 16 @ 11:46 am
@ 47th Ward: ==So the $100 million plus in unfunded pension liability is NOT one of the state’s problems?==
That’s $110 Billion, with a B
Comment by Anon Monday, May 16, 16 @ 11:47 am
Legalize marijuana and tax that. But how high would the taxes be?
Comment by Scamp640 Monday, May 16, 16 @ 11:48 am
No way the soda tax generates $375 million per year. Over a decade, maybe.
How about we bet $30 billion on Nyquist to show in the Preakness? Guaranteed 5% return, generating $1.5 billion in revenue. /s
Comment by Mittuns Monday, May 16, 16 @ 11:52 am
Good catch Anon. Billion with a B.
Comment by 47th Ward Monday, May 16, 16 @ 11:52 am
There are already video slot parlors in every strip mall and in every bar throughout the state. Do we really need more of these electronic bandits?
Comment by IllinoisBoi Monday, May 16, 16 @ 11:53 am
If they are going to approve Fantasy Sports betting, I wish they would approve online Poker.
Comment by Morgan County Monday, May 16, 16 @ 11:54 am
So would the ’sugar tax/pop tax’ also apply to diet or other non-sugar carbonated drinks?
I guess you can only tax smokers so much before that cash cow dries up and they are searching for their next vice to milk revenue out of.
Comment by SKI Monday, May 16, 16 @ 11:56 am
===There are already video slot parlors in every strip mall and in every bar throughout the state===
Chicago never opted in.
Comment by Rich Miller Monday, May 16, 16 @ 11:58 am
Anon @ 1133 - If it makes you feel any better we’ll just use current tax revenue to pay the pension debt and any increase in taxes can go toward all the other expenses you find legit. There’s no way around the pension debt now that the SC has ruled. Like it or not it has to be paid and not with magic beans either.
Comment by Anonymous Monday, May 16, 16 @ 12:02 pm
===Everyone drinks them===
Not everyone.
Rich +1
Comment by Qui Tam Monday, May 16, 16 @ 12:05 pm
tax credit for drinking diet soda or sugar free?
Comment by Ghost Monday, May 16, 16 @ 12:06 pm
–With some of the worst job growth in the nation. Illinois definitely needs higher corporate taxes. That will surely draw in more job creators.–
LOL, you might want to inform yourself as to the Illinois corporate income tax.
It’s a little tricky, as, by law, the state cannot reveal what individual corporations pay in income tax. Or the sweet handouts they get in one-off tax credits.
But you must know that any income from sales outside of Illinois are not subject to the corporate income tax. SO ADM, Deere, CAT, McDonald’s, Abbvie, etc., — the corporate income tax means oogats to their bottom lines.
Choose any Illinois-based publicly traded corporation that you like and dig deep into their annual reports and then laugh yourself silly at how little they pay in state and local taxes.
The great majority of LLCs report income at the lower personal rate.
As it was, in FY15, the state collected $3.1 billion in corporate income taxes, per IDOR. Does that strike you as a game-breaker in an economy with a $736 billion GDP?
Here’s a nifty chart for you on Illinois GDP, as well.
https://research.stlouisfed.org/fred2/series/ILNGSP
Comment by wordslinger Monday, May 16, 16 @ 12:07 pm
- Anonymous - Monday, May 16, 16 @ 12:02 pm:
Anon @ 1133 - If it makes you feel any better we’ll just use current tax revenue to pay the pension debt and any increase in taxes can go toward all the other expenses you find legit. There’s no way around the pension debt now that the SC has ruled. Like it or not it has to be paid and not with magic beans either.
Which is why state spending on other items has to be slashed. Public workers laid off. Programs eliminated. We have outrageous tax payer guaranteed returns to pay.
Comment by Tone Monday, May 16, 16 @ 12:07 pm
===There are already video slot parlors in every strip mall and in every bar throughout the state===
Chicago never opted in.–
And yet they have their hands out.
Heal thyself.
Comment by wordslinger Monday, May 16, 16 @ 12:09 pm
Which corporate loopholes would those be, I wonder.
Comment by Cassandra Monday, May 16, 16 @ 12:12 pm
=Legalize marijuana and tax that. But how high would the taxes be?=
Not as high as those paying the tax, I venture to guess.
Comment by MSIX Monday, May 16, 16 @ 12:21 pm
Can’t raise the income tax to 5%. That would mean that Quinn was right.
Comment by JackD Monday, May 16, 16 @ 12:26 pm
Is there any reason to believe there is enough trust in the system at the moment to pull off a lift this heavy?
Comment by Horse w/ no name Monday, May 16, 16 @ 12:27 pm
Obviously we are leaving far too much money in the hands of irresponsible taxpayers. Just how much of their own personal hard earned privately held money should they be allowed to keep ? Much less if the posters here are heard.
Comment by A Citizen Monday, May 16, 16 @ 12:27 pm
Give Chicago their casino. In exchange, have Chicago bail out their own schools.
Comment by DuPage Monday, May 16, 16 @ 12:27 pm
Pop tax is just another way to stick it to the middle class under the guise of “It’s for you’re own good”. I notice that the last time this idea was floated that diet sodas were included. Guess those are bad for you too. New York City’s “Big Gulp” tax was popular too…
Comment by Mouthy Monday, May 16, 16 @ 12:35 pm
I know gaming has been talked about to death on this blog and I hesitate to try and add anything new, but if the Mayor could live with a casino that operates under the same state oversight over the rest of the State’s casinos, I would imagine that would be a slam-dunk vote. His demand for his own special board and nutty stuff is what torpedoes it for me.
Comment by Just Me Monday, May 16, 16 @ 12:36 pm
Can’t raise the income tax to 5%. That would mean that Quinn was right
That stuck out at me as well JackD.
Does anyone think this is high enough given current circumstances? I understand it gives the weak willed the weak line that it still represents a cut from where we were under PQ, but is this really going to make a significant enough difference?
The pop tax appears pretty regressive to me. What if we taxed pricey wines?
Comment by Henry Francis Monday, May 16, 16 @ 12:44 pm
Wordslinger I hope you are also including the recently in the news PPRT - which is also
a corporate tax …Corporations – (other than S corporations)
2.5 percent of net income
Partnerships, trusts, and S corporations
1.5 percent of net income
Comment by lech W Monday, May 16, 16 @ 12:57 pm
Large casinos were an option 4 years ago, but no longer. Video gaming has killed that goose. The only land-based casino now would be a medium-sized (think Four-Winds) with its own entertainment venue and hotel. Nothing wrong with that. Land-based casino in Chicago would provide construction jobs, much higher pay scale casino/hotel/venue jobs and increased guest traffic flow to other Chicago attractions. But in this environment, Rauner lacks the nerve to even consider it. He’ll expand video gaming, sacrificing living wage jobs with gaming revenue for short term, minimum wage or less jobs and less gaming revenue. See, corporate vultures don’t need a long-term strategy and, apparently, neither does Illinois.
Comment by Springfieldish Monday, May 16, 16 @ 1:06 pm
======There are already video slot parlors in every strip mall and in every bar throughout the state===
Chicago never opted in.
======
And there is still over a billion a year left on the tables in Indiana and Wisconsin by Illinois residents. The Hoosiers love taking their gaming tax from us.
Comment by Been There Monday, May 16, 16 @ 1:07 pm
Let’s add another o to “pop” and tax that.
Comment by pool boy Monday, May 16, 16 @ 1:16 pm
Don’t give Madigan ideas pool boy.
Comment by Tone Monday, May 16, 16 @ 1:24 pm
“Soda tax” sounds like one of the many tax threats that pols toss out there to get the industry bagmen to come running with the cash to squelch it. A perk of office.
Comment by Anonymous Monday, May 16, 16 @ 1:33 pm
First word I learned to spell was P-O-P; a lot of people are now saying that the sugar-free benefits are outweighed by the negatives of diet whatever. Would have to include juices too, since a lot of juice is naturally as sweet as pop, and isn’t recommended on diabetic diets: I have been drinking a lot of grapefruit juice lately, but the sugar content is just as high as Coke.
Am also assuming that this tax would include sweetened tea and energy “sport” drinks.
The definition of a “soda” tax could be just as simple as defining “assault” rifles/snark
Comment by downstate commissioner Monday, May 16, 16 @ 1:43 pm
=What we need is a three year temporary 1.5% tax hike to pay off back bills and then live with in the present tax.=
Right, so we can find ourselves in exactly the same place in three years. Excellent economics.
=We have outrageous tax payer guaranteed returns to pay. =
Mmmm…that is delicious.
Curious, how many times to I have to support/subsidize a Social Security bailout?
When I get the tens of thousands that I paid into SSI, which will be never, you will almost have a point.
Until then, enjoy the roads and bridges and stadium that were built with my pension dollars.
You have been fed, time to head back under the bridge.
Comment by JS Mill Monday, May 16, 16 @ 1:44 pm
I think they should increase the tax any drink that comes in a bottle or a can, and raise taxes on all junk food.
Comment by Mama Monday, May 16, 16 @ 3:06 pm
Can they tax the companies (such as ADM) that produce the sugary drinks/food.
Comment by Mama Monday, May 16, 16 @ 3:08 pm
JS Mill,
So what type of tax increase do you want? How much money will it generate.
And how would you allocate it?
Having asked those questions I admit my proposal will never satisfy those who want an ever expanded state government, the Democratic liberal establishment) and those who want to pretend real problems don’t exist and we can just cut the budget with existing revenues (Raunerites and the neo-cons like the IPI and the CC.)
Comment by Federalist Monday, May 16, 16 @ 3:39 pm
People may go back to drinking “Neat”.
Otherwise a 7/7 is subject to double taxation.
How soon before they tax ice to cover the bases?
Comment by A guy Monday, May 16, 16 @ 3:56 pm
According to USA Today, Illinois has one of the most regressive state and local tax rates:
the poorest 20% in Illinois paid 13.2% of their incomes in state and local taxes
the middle 60% of Illinois paid 10.9% of their incomes in state and local taxes,
the state’s wealthiest residents paid 4.6% of their incomes in state and local taxes
This is why we need a progressive state income tax, not more regressive taxes.
http://www.usatoday.com/story/money/personalfinance/2015/02/15/247-wall-st-worst-taxes-average-earners/23361553/
Comment by Enviro Monday, May 16, 16 @ 3:56 pm
===This is why we need a progressive state income tax, not more regressive taxes.===
And what are we supposed to do until after the 2018 election, Einstein?
Comment by Rich Miller Monday, May 16, 16 @ 3:58 pm
==Enviro - Monday, May 16, 16 @ 3:56 pm:==
“…This is why we need a progressive state income tax, not more regressive taxes.”
I agree, but we need to tax drinks and services, etc. until we can pass the progressive state income tax. Rauner will never sign it & the house can not over-ride his veto.
Comment by Mama Monday, May 16, 16 @ 4:10 pm
That’ll teach me to think big…
Comment by Mouthy Monday, May 16, 16 @ 4:35 pm
Some forms of service tax is the answer. COGFA did a report on this a couple of years ago projecting $4 to $8 billion based on what gets taxed. Keeping this at the low end of the range still provides a lot of grease for the engine.
Comment by Joe Biden Was Here Monday, May 16, 16 @ 4:41 pm
Until we have a progressive state income tax there should be an increase in the Illinois flat income tax to at least 5%. In the interest of shared sacrifice this should also include all retirement income.
I also like Senator Donne Trotter’s idea of closing corporate loopholes.
Comment by Enviro Monday, May 16, 16 @ 4:42 pm