Games With Numbers
One of the wonderful things about numbers is the games you can play with them. They can be presented in so many different ways that you can tell just about any story you want to and find numbers to back it up.
This is particularly true about percentages. Going from 2 to 4 is a 100% increase. Going from 2 to 6 is a 200% increase. Going from 4 to 6 is only a 50% increase. And going from 6 back to 4 is a 33% decrease. The game is simple. If you want a large percentage to make your point, find a low number to start your comparison. If you want a small percentage to make your point, find a high number. And you don’t have to make up any numbers.
Which brings us to the gross receipts tax that has been called the largest percentage tax increase in any state in the last 10 years.
That is probably true, but true because Illinois starts from a base that is lower than 46 of the other 49 states.
Illinois is a low state when it comes to public expenditures. The latest available data from the Census and the Bureau of Economic Analysis (FY 2004) shows that total state and local government “general revenue from own sources” (which includes taxes, fees and interest, etc.,) in Illinois comes to $14.20 per $100 of personal income, well below $16.08 the mid point of all the states.
If the gross receipts tax is passed, total taxes will increase approximately $1.41 per $100 of personal income, bringing Illinois to $15.71, still in the bottom half of all the states, and below all of our neighboring states except Missouri.
If one is looking at “tax burdens” it is the total in taxes and fees that are paid that makes Illinois more or less competitive with other states. It will be the total that is factored into costs, not just one tax, or two taxes. When all taxes and fees are taken into consideration, even with adoption of the gross receipts tax, Illinois will be competitive.
And what the money will be spent on, an improved education system and universal health care coverage, will make Illinois more attractive as a place to live, to work, and to run a business.
7 comments:
And what the money will be spent on, an improved education system and universal health care coverage...
Visit Elgin's schools or Stroger Hospital. Convince me throwing money at those places will make a difference.
...will make Illinois more attractive as a place to live, to work, and to run a business.
A tax passed onto to those least able to pay is no progressive paradise.
Doug,
Could you please explain how tossing more money at education will improve education?
Wow, if we could only tax our way to the prosperity that they have in Wisconsin, we would really be getting somewhere.
Could someone in state government toss one bone of reform to the voters before they conjure up new ways to pluck money from the taxpayers? Pick one
1) Launch School Vouchers
2) Permanently dismantle the Illinois Healthcare Facilities Planning Board
3) End early retirment featherbedding.
No new taxes, no discussion of taxes until 1 of the above is accomplished.
JBP
Doug,
Under your theory, we'd all be leaving the US for France & Germany, yet many of their best & brightest are moving here, Australia or Canada (i.e. the Angloshpere).
As to your point, the Tax Foundation data puts IL at #24 - dropping precipitously if Federal Taxes are taken into account. This is probably a function of our taxing AGI instead of income after deductions and the high earners of the Chicago area skewing the curve.
Regardless, your theory is missing a major factor in comparative tax policy, and that is not only the total tax take, but also the direction a state is going relative to other states.
The fact is that this tax (and HB750 as well) will cost jobs and business creation.
Further, you continuously talk about all the wonderful services that we will benefit from, ignoring the fact that these benefits will accrue only to bureaucrats (education) and the poor/lower middle class (Health care designed to draw people out of private and into government care).
Though only anecdotal at this point, I can think of at least 20 people (high earners) who have left IL. I know of 5 businesses that will either a) not come here, or b) leave if this (or HB750) passes.
I personally won't pay a dime of these hikes after my son graduates (1.5 years) as I can work anywhere (or structure my life so as to avoid the tax increases)
The argument is academic as you have the votes to pass some form of awful tax policy, and therefore will.
Here is the real question that needs to be answered.
Given that;
* Nothing in either HB750 or GRT has an iota of reform re: spending.
* Property tax relief in either bill is so illusory as to be a lie
* Health Care benefits are structured only to climb, as they reform nothing in terms of delivery
* and the education $$ will do nothing but build more glitzy buildings populated by an even larger number of pension whores....
Have you, Blago, and the 4 tops started devising your marketing plans for the even larger and more "necessary" 2009 Tax Increase?
Keep us posted.
Actually, the Tax Foundation puts Illinois at #22 for state & local, #14 when federal taxes are included.
Anon,
You are correct. I was looking at last years numbers.
Note that #14 is 14th Highest.
The most important feature of 750 is its bait and switch tactic regarding property tax relief.
Taxpayers who support this because they think 750 will provide such relief need to look again.
The state cannot control local property taxes and they will not be able to control what local communities do with the additional largesse provided by either the GRT or 750. So, the money will be spent on building larger buildings, higher administrative and teacher salaries (contributing to a general teacher salary inflation unconnected to performance), lots of money to politically connected education contractors, but the end result will not be higher quality schools--only higher-paid education hacks and newer buildings. The multitude of Illinois teachers who are not smart or accomplished enough to teach now will get higher salaries just as their few competent colleagues will. And in a year or so, local communities will get right back to raising property taxes. That 12 percent of property tax relief will shrink fast in real money terms.
It's bait and switch, and the bait is fake.
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