"Always look on the bright side of life...."
The post title is the title of the closing song (and my favorite part) of the Monty Python musical Spamalot. I catch myself whistling that tune quite a bit.
So, to apply that piece of wisdom to the overtime session in the Illinois General Assembly, I'd like to point out the good things about an overtime session.
Because a budget requires a 60% vote, the General Assembly has more institutional power. Once 71 Representatives and 36 Senators agree on an agenda (and the Speaker and the President sign off), lots of good things can happen that are normally taken off the table when only a 50% vote is required.
Good things like putting constitutional amendments on the ballot.
If we want a modern, progressive income tax to match the new structure of our economy (where the middle-class is under pressure and most of the new income is flowing to high income people), we need to amend our constitution.
(Note we can make our flat rate income tax more progressive as Voices for Illinois Children explains in this policy brief by raising the personal exemption and the state's earned income tax credit, but if we really want a modern income tax, we should get rid of that constitutional provision prohibited a non-graduated rate.)
It takes a 60% vote of each chamber to put a constitutional amendment on the ballot. Well, since it takes a 60% vote of each chamber to pass a budget, it's just as easy to pass a budget as it is to put a constitutional amendment on the ballot. And since most of our budget troubles are based on an out-of-date tax system (too heavy on low incomes and it doesn't tax enough of the modern economy -- services and high incomes), it would be prudent for those who care about the FY10 and FY12 budgets just as much as the FY08 and FY09 budgets to ask the electorate for the ability to implement a progressive income tax in 2009.
Note that a constitutional amendment does not require gubernatorial action.
Speaking of gubernatorial action, another nice thing about overtime is that the threat of a veto doesn't matter so much, since it takes 60% of each chamber to override a veto. So, since it takes 60% to pass a budget, and 60% to override a veto....whomever votes for a budget and sticks to their guns will be able to override a veto.
That means when the Governor makes a mistake and threatens to veto good public policy, it doesn't matter. Once 60% of each legislative chamber agree to implement good policy, a veto is irrelevant.
That dynamic opens up the possibility of a legislative consensus, since this year, the Governor's bold vision was unfortunately matched by hostility to alternatives. That hostility is less important in June.
If ever there was a time to have a big picture conversation with your legislator, this is it.
I hope 60% of the General Assembly match the Governor's attractive tendency for game-changing proposals with constitutional amendments and progressive taxes.
cross-posted at djwinfo
14 comments:
Good things like putting constitutional amendments on the ballot.
If we want a modern, progressive income tax to match the new structure of our economy (where the middle-class is under pressure and most of the new income is flowing to high income people), we need to amend our constitution.
So propose it.
Isn't this what this whole mess is about. The Democrats in Springfield can't think of a solution other than an income tax hike but everyone is too cowardly to propose it.
Well, if they want a different kind of income tax, that requires an amendment, some one needs to use that testicular virulity Illinois Dems prone to yak about, and propose it.
I find little cheer with spineless legislatures and the air of corruption and indictiments hanging over the Gov.
Illinois's become a true embarrassement under Democrats.
Or cut spending. Anyone run the software 'game' Simcity ? Early versions were very simple: raise taxes or spend more than you take in >>> crime up, residents leave and tax revenues drop. Cut spending or lower taxes and people flock in, raising revenues.
DJW,
Even in Blue Blue Illinois, it wouldn't pass alone as an amendment.
Add a real (not fake), permanent property tax rollback, and you'll get it passed.
I've argued that our insane property tax system is merely a steeply progressive tax passed by proxy. I've seen no argument made against this point.
Look, conservatives and progressives can agree on enough issues to move this state forward, and I'd back your idea if real property tax relief was included.
You and I both know the real issue. Public Education waste, featherbedding, and greed have bankrupted this state. Throw them off the bus and you will get what you want.
Keep them on the bus, and eventually you will lose big. The game they've run on America is coming to an end, and it will end faster in Illinois because as blue as Illinois might be, few states have been as badly abused by these pikers.
I think a coalition of progressives and conservatives around a radical reform platform if the progressives weren't so timid about reform.
Where's Rich Whitney in all of this? Talk about a guy who earned a little bully pulpit to rail against the powers-that-be and has totally failed to use it.
DJ,
One of the best things about a flat income tax and a high property tax is that everyone in the state is effected by property tax. New immigrants, retired people, farmers, renters, suburbanite, citydwellers, all must pay this tax..
There is no pass off to tax some politically disfavored other guy, so that the politically powerful can go tax free.
Te current system works to insure a tiny bit of accountability in Springfield, so, you propose to scrap it, "to match the new structure of the economy", where taxpayers are pitted against one another in a dishonest battle to the bottom.
JBP
extreme wisdom wrote:
I've argued that our insane property tax system is merely a steeply progressive tax passed by proxy. I've seen no argument made against this point.
Actually, I'd say in many cases the property tax is steeply regressive.
For example, take a couple that purchased a modest home in Arlington Heights 25 years ago. That home is now worth a heck of a lot more than when it was purchased, and so the property tax on the home goes way up. But the income of that couple didn't necessarily keep up with the home's value, especially if the couple is now retired.
That sounds extremely regressive to me.
Moreover, for most middle class people, their primary asset is their home. They are taxed at the high property tax rates on that asset. Rich people have other assets, primarily stocks and other financial instruments. These are taxed at the (comparatively) low flat income tax. Moreover, the increase in value of the stocks is taxed only once, when the stock is sold and a capital gain is realized. The increased value of a home is taxed every year, and the assessment is adjusted every three years to capture the increase in value.
Last, it's the case in Illinois that the highest property tax rates are in counties in Southern Illinois where the home values are fairly low. Again, sounds regressive to me.
I agree with DJW that we need to change our tax structure in Illinois to make it more progressive. But I fail to see how going into overtime makes that solution more likely.
Thanks other anonymous. The reason why I think going into overtime has an upside is that it makes it more possible to put a constitutional amendment on the 2008 ballot that would eliminate the non-graduated rate provision of the state constitution. That would mean a progressive income tax could be implemented in 2009 (assuming the electorate approves the amendment).
And Bill, legislative have proposed this. It's HJRCA 23 (Will Davis and Barbara Flynn Currie) and SJRCA 7 (Martin Sandoval and Michael Frerichs).
Other Anon,
You raise good points that I need to add to my presentations and proposals. Thanks.
What you have effectively shown is that our ridiculous property tax system is regressive for those no longer earning. I would still argue that they are steeply progressive for upper income earners.
My family and my neighbors (in their 80s) prove both our points. If I could swap DJW's steeply progressive tax while getting a complete repeal of the obscene education portion of my property tax, I/we would pay less tax.
This proves the "steeply progressive" portion of my argument for those living (and earning) in the Suburbs.
What you have proven (and thanks again, btw) is that for those who have stopped earning, it is steeply regressive.
In closing, you have added to my argument that the property tax for education pretty much hurts everyone except for the rapacious education monopoly - which knows no bounds for its greed.
JBP wrote:
One of the best things about a flat income tax and a high property tax is that everyone in the state is effected by property tax. New immigrants, retired people, farmers, renters, suburbanite, citydwellers, all must pay this tax..
While this is an interesting and generally good point about the "optimal" tax mix, it doesn't apply to Illinois.
Though things vary from region to region, the lion's share of property taxation goes to the educaiton monopoly - which obviates the argument about an "optimal" mix.
When you are paying that high tax in the northern suburbs, you aren't buying a "good education."
You are buying Max McGee an unwarranted car allowance and a fat paycheck that adds not one single neuron to your child's head.
There can be nothing "optimal" about paying for such waste. This is one reason why swapping a "zeroing out" of education property tax for DJWs progressive dream is a good bargain for Illinois.
Max McGee has to go to New Jersey to troll for baubles, while the state of Illinois can apply the new taxes to fixing pensions, getting some health care for some poor kids (whose parents earn 3X the poverty level?!!) and roads.
All other things being equal, JB, you make a good argument. But until the education monopoly gets the massive haircut it deserves, there is no "tax mix" argument to be made.
Fund Children, not bureaucracies.
Build Clinics, not insurance schemes.
Build Tracks and stations, not featherbedded and over-pensioned payroll.
DJW wants it all, and if he gets it on the ballot, even the currently irrelevent Baise and Whitley would balk at a swapless tax hike.
Fund Children, not bureaucracies.
Build Clinics, not insurance schemes.
Build Tracks and stations, not featherbedded and over-pensioned payroll.
Radicals used to talk like that.
Things that directly benefit people and not the people admistering the benefits.
And Bill, legislative have proposed this. It's HJRCA 23 (Will Davis and Barbara Flynn Currie) and SJRCA 7 (Martin Sandoval and Michael Frerichs).
So why did you have to wait so long to tell us instead of putting it at the top of your post?
Bruno,
I am with you on attaching money to students rather than politicians and teachers unions, but the wisdom of sending more money to Springfield to accomplish this escapes me.
Wouldn't local people be in a better position to make such a decision? Isn't part of the teachers pension mess due to money sent from local schools being managed by an unaccountable centralized authority?
I don't want to pay Max McGee much of anything for his political manuvering, nor do I want to pay mandatory tutoring so that our full time teachers can take more time off, but I want Springfield to decide such things even less.
JBP
Dan-
I haven't seen Spamalot, but I know that song from the lasat scene/credits of the Pythonn classic Life of Brian. If you haven't seen that movie, where have you been?
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