GRT gets headlines while Madigan plays with HB750
Phil Kadner at the Daily Southtown has the scoop that I haven't seen anywhere else.
The Illinois House of Representatives Committee on Appropriations -- Elementary and Secondary Education is expected to hold a public hearing today on House Bill 750.
This is a measure that would change the way public schools are funded by increasing the state income tax from 3 percent to 5 percent....
Lots of good stuff in his column. Last year Speaker Madigan didn't let this tax increase go anywhere even after a Senate committee approved it. Now he's apparently allowing a House committee vote on it, which should raise more than a few eyebrows. Blago's gross receipts tax and new 3% payroll tax are horrible, but HB750/SB750 is also bad.
Not that I think they are smart enough to pull it off, but it almost looks like Madigan and Blagojevich are working together to make sure some form of tax increase is passed this year. Blago proposing the awful gross receipts tax sure does make HB750/SB750 look a lot better in comparison and sets HB750/SB750 up to be a compromise. Watch your wallets and call your Reps.
If it's voted on in committee today I'm going to be very curious to see how Republican Reps. Eddy and Prtichard vote, both of whom have not ruled out support of an income tax increase.
9 comments:
Hey Trigg, apparently this fact slipped your mind:
"No state with a flat rate state income tax has a lower rate than does Illinois!!!"
This isn't 1972 anymore. It's time to stop thinking of the state income tax like it is a leper colony. It is a far less regressive tax than any other alternative, particularly if you couple any increase in the rate with an increase in the standard exemption and throw in some property tax relief.
As for Gov. Sleazy's proposed GRT, that idea should rot in Hell with him.
Hey Trigg, apparently this fact slipped your mind:
"No state with a flat rate state income tax has a lower rate than does Illinois!!!"
This isn't 1972 anymore. It's time to stop thinking of the state income tax like it is a leper colony. It is a far less regressive tax than any other alternative, particularly if you couple any increase in the rate with an increase in the standard exemption and throw in some property tax relief.
As for Gov. Sleazy's proposed GRT, that idea should rot in Hell with him.
"No state with a flat rate state income tax has a lower rate than does Illinois!!!"
Come back and comment after you are able to compare apples with apples. Do all the other states tax gross income or net income based on federal returns? Less regressive is still regressive and still harmful to the poor, families, and middle class.
The state doesn't need or deserve one more of our pennies while $200,000/yr pensions are still being handed out. You need to wake up and realize it isn't 1972 any more and millionaire pensions are long past their prime in the real world.
Jeff,
Where is the data that shows the actual impact of Illinois income tax on "gross" income instead of net? I'd like to see the impact, especially on the working poor.
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Fed up Dem has one point which few free market commentators take into account, and that IL property tax is a proxy for a steeply progressive income tax. Like all such proxies, it hurts the working poor.
If Republicans had half a brain, they would argue for a tax swap that was a permanent property tax cut. But alas, they too are purchased by the Education Monopoly.
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As for the pensions, the constitutionally locked in nature of the existing pensions dictates either spending cuts or tax increases.
I'll have to look through my links at work. The Tax Foundation has some and they point to the Census Bureau and various federal departments for other stats. Readily available, the Tax Foundation has Illinois ranked 14th highest taxed state for 2006 for state and local tax burden at 10.9% of our income going to pay state and local taxes.
The IL Dept. of Revenue should be providing us with all kinds of info like you suggest. This number of people filed tax returns with under $XX,XXX in come and paid this amount in state income taxes. Yet another reason we can't trust them with more money.
An aspect to any tax swap to reduce it's impact on the poor and especially renters should include raising the standard deduction considerably, like to $25,000. An even swap would need a lot of tweaking.
My point was that you can't compare a 3% state to a 5% state when the 5% state has a much higher standard deduction and all the various other deductions and exemptions. We're 10th at 32.7% of our income going to taxes when Federal taxes are added in. Anyone wanting to increase that 32.7% is just crazy.
We can greatly decrease our pension obligations and thus reduce our pension payments which would have a small impact to upcoming budgets. But you are right, spending cuts are also needed. Throw those into a real tax swap plan that actually reduces our tax burden and you've got something to talk about.
Jeff -
Reading bills before commenting on them should be a requirement, especially for blog posters.
HB/SB 750 contains rent relief, property tax relief, and an expansion of the earned income tax credit that more than offset the impact of the slight income tax increase and personal services tax for low-income and middle class families.
Workers who make $50,000 or less per year will see no net increase in taxes under the bill.
Again, read the bill, then post.
ydd, I've read the bill thoroughly several times. HB/SB750 absolutely does not provide any rent relief whatsoever. The mere mention of rent is nowhere in the bill. Also nowhere in the bill is the earned income tax credit. Please copy and paste the exact language you seem to think provides those two things.
There is a new Family Tax Credit in this bill, but that has nothing to do with rent rebates or relief and nothing to do with the earned income tax credit. The Family Tax Credit also does NOT even out the tax increase for those who make less than $50,000. As for property tax relief, who don't you again copy and paste the exact language that guarantees that property tax will be reduced and stay reduced or even be capped. You can't.
Something else you won't find in HB/SB750 is any mention of any policy to actually improve education. It doesn't provide more sunshine on how the money is spent. It doesn't lighten up the tenure provisions so more than 2 teachers in Illinois per year will actually lose their jobs for poor performance. It doesn't require improved test scores to continue receiving more money. It doesn't cap pensions at a reasonable level like $100,000/year. HB/SB750 does nothing to improve education. All is does is tax us more without (67% higher tax is NOT slight, it's 67% more than we were paying) any increased responsibility or accountability. Go read it yourself YDD, I look forward to your pastes. While your at it, copy and paste what I typed in the post that made you foolishly think I hadn't read the bill in and out.
Wow ... 2 teachers per year in Illinois lose their jobs for poor performance? We have at least that many in our *district* each year.
I'm all for education reform being part of the funding solution. So what's your proposal?
Hey,
HB750 definitely includes provisions to reduce the regressive aspect of the decrease property tax/slight rise in income tax. The Family Tax Credit!
If you look at current legislation on the table, there are 3 bills dealing with the EITC, one which was introduced by Emil Jones, which will raise the percent rate of EITC. That's SB12
Back to the Family Tax Credit -- in some ways its *better* than the EITC because the system used to formulate isnt at all outdated. Plus, it helps families with incomes up to $54,000, and considering EITC only helps out family with one earner, 2 kids, making about $36,000. So there is a HUGE change for the better that makes the 750 reform package a big improvement in ensuring moderate income families aren't so close to falling into poverty.
So, the makers of 750 used Federal Dept of Labor data on spending and correlated that with income levels in order to figure out exactly which services low and moderate income earners make the most use of -- they took that data into account when planning their tax credit system to ensure the credits are actually representative of the income class, not just arbitrary credits and incentive (unlike the way businesses are so graciously given TIF zoning tax exclusions without any concern for what the loss of that taxbase means for Cook County's budget... but i digress)
So about the lack of rent relief: this bill is about tax reform, and the decrease in property taxes has a larger impact on owners than renters. BUT this doesnt mean proponents of 750 are opposed to rent relief. A number of its supporters, in both the House, Senate and in regional organizations, are behind initiaives such as the Real Estate Transfer Tax reform bill and the Open Doors, Open Lands Campaign, plus the Good Housing, Good Schools Act. These are just some of the current policy measures being debated that would reduce the affordable housing crisis that is affecting people across Illinois.
In the end, 60% of Illinois tax payers are NOT going to see a tax increase if 750 goes through as is. That's 60%!
As for the 67% higher tax you're seeing,i would actually really like to read about that, I mean, I do take interest in both sides.
And on your most recent point about education reform--- this bill is dealing with a MASSIVE structural inequality issue here. MASSIVE. i mean, underfunded schools speak for themselves. walk the hallways, try to talk to students, educators. There definitely needs to be higher standards of accountability. I think money in this bill will provide for investigation, research and development of higher standards of best practices. Although there is no gurantee at this point, that doesnt mean us responsible citizens should back off on a bill like 750-- we have to stay vigilant and continue pushing our legislators to make changes, and our educators to respond to students and families.
one specific measure in 750 i know does address education reform is in regards to special ed funding. currently, schools are reimbursed about $6000 per special ed teacher. a dollar amount set in the 1980's and never adjusted for inflation. 750 would raise this up to $19,000!
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