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* My weekly syndicated newspaper column gives us two avenues of discussion today…
Normally, a tax hike would be the last thing state legislators would consider in an election year. Tax increases are usually approved in “off years” to give voters time to forget before they vote. So you’d think that any talk of a large income tax increase in Springfield would be the last thing being considered.
But the ever-growing likelihood that U.S. Sen. Barack Obama may end up as the presidential nominee is giving Illinois Democrats hope that his presence at the top of the ticket will negate any voter negativity associated with just about anything they do this year. And one of the controversial items on the agenda for some of those Democrats is an income tax increase.
A spokesperson for Illinois Senate President Emil Jones confirmed last week that Jones once again is supporting an income tax hike.
Last year at this time, Jones joked with reporters that while state Sen. James Meeks’ income tax hike proposal wasn’t exactly dead, Jones would be assigning it to the “hospice committee” and wouldn’t allow a floor vote on the bill. Jones had long supported an income tax hike for school funding and property tax relief, but he abandoned that position last year in favor of the governor’s gross receipts tax - which never went anywhere - and adamantly refused to budge.
The column goes on to detail Meeks’ new bill to raise the income tax and looks at its prospects. Discuss below, but I’m also wondering what you think of the column’s thesis: Democrats may be able to get away with almost anything this year if Obama is at the top of the ticket.
This is not a prediction that Obama will, in fact, make it to November, particularly since the column was written on Friday morning and since then the Clinton campaign appears to be pulling out every single stop in the week leading up to Texas and Ohio. So, let’s avoid that subject, please. Try to keep it to a “what if” discussion, Drudge’s hyperventilating notwithstanding.
posted by Rich Miller
Monday, Feb 25, 08 @ 10:43 am
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The real question, can they get a veto proof majority on a tax hike in an election year? The republicans would be smart to oppose the dems on this, thus getting to use theor old tax and spend mantra.
I doubt that Obama porivdes much political cover even if he wins. Voters are notorious for following the local scene more then the national when voting. If they are mad at a tax hike, it will be felt on election day.
Comment by Ghost Monday, Feb 25, 08 @ 10:49 am
An income tax hike would still require a 3/5ths majority in both Houses - unless G-Rod does another major flipflop. Might be hard to achieve in an election year. How many Republicans will jump on board while party leaders would be doing their best to exploit the hike for election purposes? So how does it add up any better this year?
Comment by Fight for Justice Monday, Feb 25, 08 @ 10:50 am
===Voters are notorious for following the local scene more then the national when voting.===
Actually, this is state, not local, and voters tend to follow state issues far less than national.
Comment by Rich Miller Monday, Feb 25, 08 @ 10:53 am
I think voters will not take a tax hike lightly, and it would be a boon to Republicans in a year they need all the help they can get. I can’t believe Madigan would gamble to this extent. Without straight-party voting anymore, this works against the Dems as well. Not nearly the coattails we used to see.
As a Republican, I’m all for the Dems trying it! It would also be a good litmus test for Republicans as well. No better rallying point than Democrats raising taxes.
Comment by Frustrated Republican Monday, Feb 25, 08 @ 11:01 am
I thought Obama was advocating for more progressive taxes, with the wealthy paying more, at least to fund universal health care. Definition of wealthy seems to be somewhat fluid, though. Republicans not withstanding, it’s not that clear to me that the truly wealthy (let’s say, for the sake of argument, family income of $500,000 and up), would be that violently opposed to a modest federal tax increase, with opposition decreasing as family income increases up the scale. Look at all the money American rich folks are trying to give away across the globe.
The progressive part wouldn’t benefit Illinois state taxpayers though, and the well-off (and most of our legislators and political leaders are very, very well off, thanks to us) would be substantively off the hook on a flat tax increase, as would seniors, whose pension income is not taxed in Illinois. And the legislators could raise their pay again to cover any financial discomfort under a state income tax increase. Once again, it would be Illinois’ endlessly passive middle class who would pay the freight Given their past passivity, I don’t think Obamamania would be needed for them to fork up more cash for the Democratic trough. Even in the throes of a recession.
Comment by Cassandra Monday, Feb 25, 08 @ 11:12 am
===Actually, this is state, not local, and voters tend to follow state issues far less than national.===
True, but tax hikes get a lot of play around the water cooler. I would bet dollars to donuts that the average Illinois voter would not be influenced at all by Obama being on the ticket if tax hike buzz makes it way through office gossip. People may not follow State issues much, but somee things, like tax hikes, tend to stir the hackles of all and make the rounds like wild fire. I think it would not be ignored or shielded by Obama at the local level (i.e. the office water cooler gossip) and it stgrikes enough of a cord that people will talk about it and not just roll their eyes in disinterest.
Prayer in schools, new bridge, most could care less….reduce folks take home pay, those are fighting words.
Comment by Ghost Monday, Feb 25, 08 @ 11:14 am
Even without Obama, the widely disparate groups and powerful individuals who call themselves Democrats could do just about anything if they could get together. But that’s a whole lot of egos and a wide spectrum of interests.
Comment by wordslinger Monday, Feb 25, 08 @ 11:14 am
Barack is doing a fine job and is a nice show piece, but I do not think he will not have much coat-tail effect locally. With CPI and ECI hitting 4.1%-4.3%, real inflation costs are far outstripping the modest revenue growth for state dollars, not to mention 3% cuts in some state departments. Pension funds, Medicaid costs, capital projects, human services, etc. all will have to be paid somewhere. Are people willing to let places close or roads not get fixed. Which ones? It simply will not matter what party you are with…Who is going to pay the tab and how? Gambling may be an answer, but new casinos will not open in 12 months and the buck flow can be several years from now. The economic reality is setting in and even Jones looks like he is opening the door to income tax increases.
Comment by zatoichi Monday, Feb 25, 08 @ 11:20 am
The greater issue many R officeholders will face is balancing what they know needs to be done against the partisan politics of the issue.
Comment by steve schnorf Monday, Feb 25, 08 @ 11:38 am
A rate increase is probably needed but we should get the budget under control first. A 3% cut across the board is a cowards way of trying to reduce expenditures. Each line item should be looked at first and adjusted according to the need. We may have some that should be deleted. Then and only then justify a rate increase.
Comment by Hickory Monday, Feb 25, 08 @ 11:49 am
There a problem a lot of things that Illinois Democrats can get away with, but a tax hike, particularly an income tax hike is not one of them. Even if people do not pay as much attention to state issues as they do to national or local ones, an income tax hits people in the pocket book and people do take notice of that and talk about it. IF the Dems do it, they are going to give the ILGOP an opening to pull themselves back into the game more.
Comment by RMW Stanford Monday, Feb 25, 08 @ 12:01 pm
“A 3% cut across the board is a cowards way of trying to reduce expenditures. Each line item should be looked at first and adjusted according to the need. We may have some that should be deleted. Then and only then justify a rate increase.”
I agree with an 3% across the board cut is the easy and lazy way to try and get out of it. What we need to do is re-examine every state program, agency, department and then use that information to decide what to cut, I am willing to bet that their are many areas that could be cut by more than 3%, but that of course will take work and might anger some people whose interests are threatened.
Comment by RMW Stanford Monday, Feb 25, 08 @ 12:06 pm
It’s my understnding that the main issue with voters is the economy. I don’t see how an income tax increase sneaks under the radar when people are struggling….or at least fearful of an economic downturn. Obama or not…remember what Tip said ” all politics is local”. Not only won’t the R’s go for it but downstate D’s would be fools to vote for this as well.
Comment by downhereforyears Monday, Feb 25, 08 @ 12:07 pm
I agree with RMW. Espcially since we’ll be sold a tax hike in the federal election to.
Comment by Bud Man Monday, Feb 25, 08 @ 12:09 pm
Yes and no.
Framing it as a bipartisan solution to a non-partisan problem is the key. I’m assuming they’ll have to do that anyway since, atleast in the House, GOP votes will be needed to override the Gov’s veto. I’m guessing a deal is being worked out over capital spending and the finer points of the education funding components.
Democrats should not be acting like open partisans and attacking Republicans during the session this year if they want to get this done, and that might mean forestalling the likely push for more gun control measures.
House and Senate Democrats should feel free to excoriate the Gov every time he opens his mouth about taxes — which, BTW, will be kind of tough with his closest political ally leading the charge.
I’d feel free to borrow from Alexi’s rhetoric, framing Rod Blagojevich as part of “the old politics of Springfield” that is more interested in “scoring political points than solving problems.”
Comment by Yellow Dog Democrat Monday, Feb 25, 08 @ 12:27 pm
This question points out one of the major disappointments in Blagojevich’s tenure as governor. When he got elected, he could have easily gotten the income tax rate increased. He could have fixed the school funding problem, helped greatly with infrastructure and helped retire the George Ryan-era deficit. There is no way that he would have been defeated for re-election. Instead, he insisted on being a no new tax Democrat and we’re in worse shape now than we were six years ago and there’s no way that they will run a tax increase because of the next election. A real shame, IMHO.
Comment by chiatty Monday, Feb 25, 08 @ 1:15 pm
If an income tax increase is coupled with some type of property tax relief, in addition to at least the appearance of government reform and more harmony in the GA, it’s got a pretty decent shot of passing. I think Dems and Reps alike are beginning to realize that the fiscal shape of Illinois is dismal, and that casinos aren’t a viable solution. In addition, the specter of calamities like the I-35 bridge collapse in Minneapolis, in addition to the so-called health care crisis et al, can provide some cover for the politicians seeking to escape relatively unscathed. Plus, there’s the added benefit of spite - passing legislation that Blagojevich has unilaterally opposed will give a number of lawmakers the warm fuzzies.
Comment by The Doc Monday, Feb 25, 08 @ 1:17 pm
Reducing spending in a big way would be the first order of business. When was the last time an efficiency study was done at the state by an outside firm? The problem with that ,of course, is finding or allowing, an unbiased firm to perform the study. No doubt they could show a huge potential savings. Now, re-enter the real world…a tax increase could fly if there was a modest across the board cut in spending, as has been proposed, and you didn’t target the poor and seniors. That assures you a good voting bloc to help it pass. The ‘middle class’ will be at the mall on Election Day and not at the voting booth to exact a toll on those voting for the tax increase. I believe the spin masters and politicals see that, so we should prepare to continue the tax and spend mantra of Illinois government.
Comment by Justice Monday, Feb 25, 08 @ 1:18 pm
The problem with Hickory’s & RMW’s suggestion to look at all expenditures individually, vs a 3% across the board cut is, who does the looking? Who sets the criteria? Everyone has different priorities, so it’s hard to agree on what to cut, therefore, in practice, across the board tends to work better. To answer Rich’s question, IMO as the economy worsens voters will pay more attention to tax increases, Obama coattails or no.
Comment by Sir Reel Monday, Feb 25, 08 @ 1:23 pm
1983: Worst recession since the Great Depression in Illinois. No incumbents lost who voted for that year’s income tax hike. Same goes for every other income tax hike since then.
Also, despite the Tribune’s best efforts, Cook County voters overwhelmingly rejected the argument this month that a vote for Gene Moore and Joe Berrios was a vote for higher taxes.
Comment by Rich Miller Monday, Feb 25, 08 @ 1:26 pm
Rich,
Certainly not going to argue IL political history with you, but could perhaps the fast-declining federal rates of the 1980’s offset some/most of the state-level anger? I believe top marginal rate came in massively right before 1983. Whereas in 3 years, we expect top marginal, capital gains, and dividend rates to increase…
Comment by Greg Monday, Feb 25, 08 @ 1:34 pm
Except those same rates have dropped in the past 7 years.
Comment by Rich Miller Monday, Feb 25, 08 @ 1:36 pm
I don’t think so.
1.
Comment by bankman Monday, Feb 25, 08 @ 1:55 pm
until there is agreement on a single policy priority by both the legislature and the Governors office, there will be no peace in the land and the strife, financial and otherwise shall continue unabated….
Comment by Anonymous45 Monday, Feb 25, 08 @ 1:59 pm
I don’ think the democrats can count on a passive voter this cycle.
1.Economically (family budget) this is not the 80’s with $ 3.00+ gasoline, heating and electric rates and the media setting us for higher food cost. While I know on an inflation adjusted basis all or most of our cost of living cost are better now than in the 80’s but very few rank and file have seen their after tax pay keep up with inflation.
2. Any tax increase that affects net payroll I would expect will be immediate and subject to the voter’s attitude come election time.
3. A form of a stealth tax increase would seem to overcome item # 2, but real revenues for the state can only come from a sales tax increase and that is not very stealthy.
Comment by bankman Monday, Feb 25, 08 @ 2:07 pm
Bankman, did you live through the early 1980s? I did. Gas prices were high, unemployment was skyrocketing (nearing 20 percent in some smaller Illinois cities), we had the highest electric bills in the Midwest, interest rates were double-digits.
Comment by Rich Miller Monday, Feb 25, 08 @ 2:12 pm
How much of this across the board cut of 3% will be attributed to the improved eficiency that shared services and moving more agency functions to CMS. Talk about a way to escalate costs, improve inefficiency and decrease service to the citizens!
Comment by Leave a light on George Monday, Feb 25, 08 @ 2:44 pm
Sir Reel,
Your right that looking at each agency, program, ect separately is going to be a lot hard because of different criteria, agendas, ect., that of course is why we hear about across the board cuts not focused ones. As a start the Governor and the leadership of the General Assembly, or more realistically their staff and advisers, should be doing the looking and of course it would take a lot of work and it would probably end up with a lot of compromises in the end, but the results would probably be better for the State.
Comment by RMW Stanford Monday, Feb 25, 08 @ 3:09 pm
Polls show that about 2/3 of Illinoisians support an income tax increase to equitably fund education. The number is higher when property tax relief is included. Yes, it should have been done during the governor’s first term. Yes, it should have been done last year. Yes, it should be done this year. This fear of voters suddenly surging to the polls to oust incumbents who vote for an increase is a myth in legislators minds. Most legislators are multi-term incumbents who will be re-elected no matter what they do.
Go ahead and do the right thing. You will be suprised at how good it will make you feel. Your voters will still be there for you in November, You may even attract some new ones.
Comment by Bill Monday, Feb 25, 08 @ 3:19 pm
In case you’re wondering, that’s the “real” Bill. I checked, just to make sure. lol
Comment by Rich Miller Monday, Feb 25, 08 @ 3:22 pm
Do the right thing - increase the income tax modestly so that Illinois can meet its existing financial obligations, not so that it can expand existing programs or start new programs. I attended an education forum in Evanston yesterday - Julie Hamos suggested that the State probably could not sustain its current level of education funding during the next fiscal year without some substantial change. I coubt that an income tax initiative can succeed given that Governor A is intransigent on the issue, despite its fiscal necessity. Maybe there is a glimmer of hope, but Hamso didn’t appear to think that the prospects for change were favorable in the present “conflictual” political climate in Illinois.
Comment by Captain America Monday, Feb 25, 08 @ 3:30 pm
Rich
Yes I did live through the 70 and 80’s and yes it was bad. We even had gas shortages (gas stations with no gas - at any price). By the way while it was bad, I did not see evidence of the consumer chosing either a tank of gas or a sweater, and yes interest rates were high, but guess what the foreclosure rate did not mirror the interest rates. It was tight, but the average consumer actually better off financially What I am saying is the consumer (lunch pail crowd)is squeezed, somethings they can cut back on, but when they see their paycheck shrink and can point toward the tax bite, I suspect there will be a backlash.
Comment by bankman Monday, Feb 25, 08 @ 3:32 pm
It’s also possible that raising the income tax is not the “right thing.” Seems to be taken as a given here.
Comment by Greg Monday, Feb 25, 08 @ 3:35 pm
bankman, the “lunch pail crowd” was losing jobs at an historic rate back then. It was far worse then by just about any measure.
Comment by Rich Miller Monday, Feb 25, 08 @ 3:36 pm
“Polls show that about 2/3 of Illinoisians support an income tax increase to equitably fund education.”
That may well be then the question becomes is that what the an income tax increase would end up funding? Would go to fix the problems in the state budget? Or would it end going to fund to new and expanded programs and do nothing to fix the State’s long run fiscal problems?
Comment by RMW Stanford Monday, Feb 25, 08 @ 3:44 pm
“the “lunch pail crowd” was losing jobs at an historic rate back then. It was far worse then by just about any measure.”
Worse than 1929?
Comment by Dirty Bath Water Monday, Feb 25, 08 @ 3:52 pm
What I meant was, it was far worse then than it is now. You’d have known this by following the thread (I specifically pointed out this in an earlier comment), unless you were deliberately trying to twist my words.
Comment by Rich Miller Monday, Feb 25, 08 @ 3:54 pm
And now that I’ve pulled up some of your older comments, I see you have a tendency to do that with me. I should’ve just considered the source.
By the way, I’m still awaiting a reply on your last little goofy dig.
Comment by Rich Miller Monday, Feb 25, 08 @ 3:56 pm
Why is there no discussion of a graduated income tax? Reduce taxes to 2.5% for everyone making less than $30K. Leave it at 3% between $30-$50K. Increase it to 4% between $50K-100K, 5% between $100K-$300K, and 6% for those earning over $300K. And tax at that rate from “dollar-one”. You make $300K, you pay $18K in State Income tax. No of this 2.5% for the first $30K, 3% for the next $20K……..
Comment by Anon13 Monday, Feb 25, 08 @ 4:01 pm
===Why is there no discussion of a graduated income tax? ===
Because you have to change the Constitution to do that.
Comment by Rich Miller Monday, Feb 25, 08 @ 4:03 pm
That’s got to be easier than passing a budget!
Comment by Anon13 Monday, Feb 25, 08 @ 4:04 pm
lol
Comment by Rich Miller Monday, Feb 25, 08 @ 4:06 pm
Anon13,
People talk about it constantly here, though I would dispute that it’s the right answer. By the way, in your “dollar-one” scenario, I assume the employee would welcome a $1,000 pay cut to avoid $2,000 in extra taxes (not that that’s integral to my opposition of it.)
Comment by Greg Monday, Feb 25, 08 @ 4:09 pm
That way we could help out business by reducing salaries….. Why would it not be a reasonable course to take? From a political point of view G-Rod could claim he was helping out low income wage earners. The flat State income tax always has struck me as odd, given the graduated Federal tax system.
Comment by Anon13 Monday, Feb 25, 08 @ 4:15 pm
These guys do not want to take chances after last summer. They do not want to add any fuel to any hot embers left among voters.
Job number one in 2008 is getting re-elected. Everything else is secondary. They will pretend to cut the budget, and pretend to discuss the need for more money so they can do a tax increase in 2009.
Obama isn’t going to have coat-tails anymore than any other presidential candidate has over the past twenty years. He has peaked.
Comment by VanillaMan Monday, Feb 25, 08 @ 4:18 pm
VM,
You’ve been predicting Barack’s doom for a long time. Now it seems like you are conceding that he will be the nominee. When are you going to admit that he is going to be the next president? Talk about a slow learner!
Comment by Bill Monday, Feb 25, 08 @ 4:23 pm
VM, your predictive powers are not that great in this regard.
12/6/06: “Rodham-Clinton has already bought and set up the teams to take Obama down if he tries to run. Bill is getting ready to get Barak into one of his bear hug death grips of which no human ever escaped.”
1/9/08: “Obama might pick up those states, but Super Tuesday will be Hillary’s night, now that she has that New Hampshire win. Edwards will stay in the race, just as he had in 2004 which also helps Clinton.”
There’s more. Lots, lots more, but you get the idea. Perhaps it’s time you backed away from bold predictions.
Comment by Rich Miller Monday, Feb 25, 08 @ 4:28 pm
Well, if Obama is elected and gets universal health insurance through, that could put more federal money into health care and provide relief for the states. A sort of tax cut one removed, maybe. Except…once you give our fearless Illinois Democratic leaders money they just don’t give it back or even spend it wisely. Nope, it’ll go right into more patronage, more overpriced contracts for the connected, more astronomical salaries for Blago/Emil appointees to state agencies.
But hope springs eternal. Maybe we should wait
and see what happens in November before we go ahead and pour more oceans of money on Illinois
state government.
Comment by Cassandra Monday, Feb 25, 08 @ 4:31 pm
The graudated income tax notion seems like a good one - is this something that is (or could be) on the agenda at the con-con? Perhaps we could use this opportunity to actually reform state government, instead of recall proceedings that will likely be futile and only deepen the chasm between the governor and the GA.
I like this idea because those that would be most affected - the wealthy - are typically the least disenfranchised. It could mean both more needed funds into state coffers, along with accountability to those that have the most influence on government.
Comment by The Doc Monday, Feb 25, 08 @ 4:56 pm
Oh geez - I’m a Democrat!
Comment by The Doc Monday, Feb 25, 08 @ 4:57 pm
Doc-
Don’t worry. It’s O.K. That feeling will go away. We Republicans really don’t mind everyone paying according to their ability. We would just like EVERYONE to have the opportunity to contribute.
Comment by Anon13 Monday, Feb 25, 08 @ 5:33 pm
Rich, this dredging up old posts of ours - like VM - is just plain mean spirited! Some would like to change positions on particular issues (flipflop) without being spotlighted as flipfloppers. And besides some posts, not many I’m sure, are made under the influence of intoxicants.
Comment by A Citizen Monday, Feb 25, 08 @ 5:53 pm
LOL. My advice is: Take a deep breath before you hit the “say it” button. Like diamonds, comments are forever.
Comment by Rich Miller Monday, Feb 25, 08 @ 6:03 pm
The income tax ought to pass, of course. The state is so severely broke that anything else would mean crossing lines no politician of either party wants to cross.
The question is Public Official A. If he sticks to his no-new-taxes mantra, I simply don’t see how anything gets done this year — for the basic reason that trust has gone so far out the window that it is easier simply to put the state government in a vise-grip than get a three-fifths majority.
Frankly I think we’ll be lucky even to come up with full matching funds for federal transportation funding. A sad statement on Illinois politics if ever there was one.
The only shred of optimism I have is Emil Jones’ suddenly reinvigorated interest in the income tax.
Comment by Angry Chicagoan Monday, Feb 25, 08 @ 7:30 pm
“- Rich Miller - Monday, Feb 25, 08 @ 6:03 pm:
LOL. My advice is: Take a deep breath before you hit the “say it” button. Like diamonds, comments are forever.”
Rich, as a matter of interest (and perhaps self defense) how far back does your archive go?
Comment by A Citizen Monday, Feb 25, 08 @ 8:58 pm
All the way to the beginning.
Comment by Rich Miller Tuesday, Feb 26, 08 @ 12:17 am
Anon 13 ===That way we could help out business by reducing salaries….. Why would it not be a reasonable course to take?===
I’m sorry? The way to help business is to make them reduce the salaries they pay to their employees?
Comment by mpkomara Tuesday, Feb 26, 08 @ 1:41 am