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BGA really goes out on a limb with crack research

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Illinois’ flat income tax, currently set at a rate of 4.95 percent for all individual taxpayers, is an outlier. The federal government, as well as most states that have an income tax, feature what is commonly referred to as a progressive tax system in which higher earners pay higher rates.

Democrat J.B. Pritzker, the challenger to Republican Gov. Bruce Rauner in the November election, says he wants to switch Illinois to a progressive tax, though he has been vague about details.

Rauner’s running mate, Lt. Gov. Evelyn Sanguinetti, recently ripped into Pritzker’s tax plan during an interview on a Fox News-affiliated talk radio station that serves the Illinois suburbs of St. Louis.

Pritzker will “stick you with that progressive income tax which is surely to be an increase — not to mention the fact that it is wholly regressive,” Sanguinetti told Marc Cox of KFTK.

That is quite the oxymoron. Can a progressive income tax actually be regressive? We decided to check.

#Facepalm

posted by Rich Miller
Tuesday, Jul 3, 18 @ 11:07 am

Comments

It is regressive when income tax is applied on the very first dollars earned and billionaires hide their money off- shore.

Comment by Al Tuesday, Jul 3, 18 @ 11:20 am
I can’t decide if Sanguinetti is willfully lying or she’s just absolutely clueless. Strong historical evidence to back either position.

Comment by wordslinger Tuesday, Jul 3, 18 @ 11:26 am
“Illinois’ flat income tax, currently set at a rate of 4.95 percent for all individual taxpayers…”
All individual taxpayers?

“…is an outlier.”
You know what else makes us an outlier?

“Can a progressive income tax actually be regressive?”
Yes, if someone else with the same income is not required to pay any taxes because of how it’s classified, it is actually quite regressive.

Comment by City Zen Tuesday, Jul 3, 18 @ 11:29 am
==You know what else makes us an outlier?==

You really gotta move on.

Comment by Demoralized Tuesday, Jul 3, 18 @ 11:36 am
Typical republican. Up is down and down is up.
And when in doubt, attack the most vulnerable instead of those whose heads are deepest in the trough. You know, the job exporters, I mean creators.

Comment by Streamwood Retiree Tuesday, Jul 3, 18 @ 11:41 am
Is Sanguinetti still around?

What does she do?

Comment by Bobby T Tuesday, Jul 3, 18 @ 12:10 pm
‘Nember when Jason Plummer was possibly being the Illinois Lt. Governor was the nuttiest thing possible, or Evelyn actually being Illinois’ Lt. Governor was the wackiest thing in governing happening? Me too.

Good times.

Ole Slip and Sue was hired. Ask her. She’ll tell you.

Slip and Sue is only consequential “if”… and Rauner made sure these three years she’s been inconsequential.

Comment by Oswego Willy Tuesday, Jul 3, 18 @ 12:14 pm
Great to see the BGA diving hard into the top policy issues of our time. Watch out ProPublica, they’re really bringing the heat to other investigative competitors. /S

Comment by Productive Tuesday, Jul 3, 18 @ 12:21 pm
Disappointed. I thought this was going to provide some information about drugs.

Comment by a drop in Tuesday, Jul 3, 18 @ 12:37 pm
Such a shoddy “fact check”. Definitions and terms don’t define policies. I agree with the Lite Gov that progressive taxes can be regressive policies. It all depends on the details of said policy. Are there details?

Related: “The Uneasy Case for Progressive Taxation.” https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=2722&context=uclrev

George Will on progressive tax: It is, however, the nature of reality that burdens imposed on the wealthy minority can injure the majority by impairing economic incentives, thereby suppressing growth. Progressive taxation reduces the rewards of investments, and the real rate of return on savings, thereby encouraging consumption over saving and hence over capital formation. When progressive taxation slows economic growth, it makes inequalities of wealth more durable by retarding the accumulation of new fortunes. And by encouraging constant tinkering with the tax code to perfect equity, progressive taxation gives a patina of altruism to rent-seeking by economic factions, whereby government enriches those sophisticated at manipulating it.

https://www.nationalreview.com/2015/12/progressive-taxation-case-against/

Comment by 3rd of July Tuesday, Jul 3, 18 @ 1:03 pm
If the progressive tax proposal is actually regressive it necessarily follows that the current flat tax system is regressive.

Comment by Skeptical Tuesday, Jul 3, 18 @ 2:07 pm
@3rd of July

You’re really bending over backwards citing such silly arguments. The basic argument seems to be, “since progressive taxes require that the wealthy contribute more, they’re less likely to invest in their business and there is less economic growth.”

Right…except that the opposite has proven to be the case. For instance, in the wake of the Trump tax cut of 2017, the vast majority of the money was used for stock buyback, not sharing it with workers or reinvesting in the company.

Rich people like to mislead people about how businesses work. Businesses don’t hire people or increase wages just because they can. They do so because of increased demand for their products and services. And demand increases when the poor and middle class have more money to spend. How do they get more money? When they pay lower taxes. Or when they get higher-paying jobs, because they had easy access to the education required for such jobs.

Comment by Techie Tuesday, Jul 3, 18 @ 2:35 pm