STUMP » Articles » Taxing Tuesday: the Governor of Illinois Talks Taxes (and Meep Does Her Taxes) » 11 February 2020, 05:33

Where Stu & MP spout off about everything.

Taxing Tuesday: the Governor of Illinois Talks Taxes (and Meep Does Her Taxes)  

by

11 February 2020, 05:33

GOVERNOR OF ILLINOIS CALLS FOR HIGHER TAXES

Op-ed by Gov. Pritzker Wealthy Illinoisans (like me) should pay more income taxes

To put Illinois back on firm fiscal footing, we must make some hard choices among three feasible options: 1) raise income tax rates on everyone by raising the flat tax; 2) cut schools, universities, public safety, mental health and addiction treatment drastically; or 3) raise tax rates only on the wealthy while giving the middle class a tax break. I choose option 3, the fair tax.

What utter bullshit.

There are so many other options than what he put above (and I’ll talk about #2 in a moment).

For example, given that the state constitution needs to be amended to allow for graduated income taxes, why not amend it to allow changes to pensions, hmmm? That’s a huge portion of the cost pressure.

Let me explain why I support a constitutional amendment to change our tax structure to protect the middle class.

The fair tax is what a vast majority of states and the federal government use. But in Illinois, we don’t. Our wealthiest residents have enjoyed 50 years of the middle class and working class paying a higher tax burden while the richest pay a much lower tax burden. In fact, today in Illinois, the lowest earners in our state pay 14 percent of their income in taxes while the wealthiest people in our state pay only about 7 percent.

I don’t believe this is fair. Wealthy people like me should pay more to help balance our state budget.

I asked the General Assembly to move the constitutional amendment because it would allow us to more permanently stabilize the state’s finances, pay our bills, make our pension system more secure and invest in the future while allowing middle-class families to pay less.

Yeah, I have an idea for making pension systems more secure. Allow pensions to be partially variable, and no automatic 3% COLAs at the very least.

We also have a serious problem with property taxes. They are simply too high, and they suppress property values for residents and businesses alike. That’s why in my first year in office, I’ve taken important steps to alleviate this tax burden by attacking three of the biggest components of your local property tax bills.

The bulk of homeowners’ local property taxes—nearly 60 percent on average—goes to fund local schools. If the state does more to pick up its share of school funding, property taxes can go down. So I began to make that shift by increasing the state’s share of school funding.

Uh huh, and that school funding will come from… higher taxes. On everybody.

The next-largest property tax driver is municipal and first responder pension funds—which is why I insisted on passing landmark pension reform to consolidate police and firefighter pensions. This will improve investment returns and lower costs, and that means a lower property tax burden for homeowners.

That is not going to reduce costs enough to make a difference. This is bullshit. The only way to seriously lower those pension costs is to allow pension benefits to be variable or cut.

As for threatening cuts:

If voters reject progressive income tax, Pritzker promises to cut state spending

I know this is supposed to be a threat (take it all out via cuts, as opposed to higher taxes AND cuts, which at least would be toward something), but seriously, a lot of people are fine with cutting state spending.

Gov. J.B. Pritzker said the state’s next budget will be balanced, but said if voters don’t approve a progressive income tax in November, he would have to reduce state spending across the board in future years.

The governor is preparing to deliver his budget address later this month. He said Friday that the progressive tax was needed to address “income inequality” and increase state spending on things like education.

….
On Friday, Pritzker told Politico at a conference in Washington D.C. that we would present a balanced budget. However, if voters don’t approve the progressive income tax this November, the governor said 15 percent cuts in state spending would be needed across the board.

“We have to pay interest on our debt and all the other things that are fixed and then you get to what people call discretionary spending and that’s where you’d have to make all these cuts,” Pritzker said. “And these are the things that affect people’s lives, particularly the middle-class and working families across the state.”

Illinois’ most recent budget called for spending about $40 billion dollars in state money. The state spends another $40 billion of federal tax money.

Yeah, whatever.

MEEP DOES THE TAXES

Last week, on Thursday, I felt like a train hit me. So I decided, what the hell, let me do my taxes. I’m laid up in bed anyway.

So, here are the results, plus what I reported last year:

Effective federal income tax rate:
2019: 9.3%
2018: 9.4%
2017: 10.2%
2016: 11.4%
2015: 9.9%
2014: 9.7%
2013: 10.8%

My CT taxes are 5.1% and NY taxes 0%.

The total refunds I got were 16% of the tax I actually paid to all three entities. The most annoying thing to me is that it’s difficult for me to avoid over-withholding state taxes. The CT refund was the largest, and to say that annoys me greatly is an understatement — and there I overpaid by 27% — given it is supposed a flat tax, I cannot figure out why they make me overpay each year by so much. Unfortunately, I can’t do much about the state withholding. My federal taxes were overpaid by only 3%, which I figure is close enough to zero for practical purposes.

Bah.

To repeat myself from last year, let’s get rid of tax withholding.

Tax AI

STATE INDIVIDUAL INCOME TAX

From the Tax Foundation: State Individual Income Tax Rates and Brackets for 2020

And here is a CBS news piece on federal tax rates.

TAX STORIES

Everybody is always in favor of “tax that OTHER guy”. And then that OTHER guy goes elsewhere, and you find out that you’re now the OTHER guy. Because you’re what’s left.

TAX TWEETS

Jackson Carlaw is a Scottish politician.

Now here’s the deal – he made living more affordable for his employees by paying them more. That sounds a hell of a lot more effective than raising taxes on the company.

I’m doing this early in the morning, so I’m seeing tweets from around the world (the U.S. dominates twitter later in the day). I’m seeing some kind of dispute over taxes paid (or not paid) by a news channel in the Philippines.

I have no idea if these are bots or if there’s a reason people not working for the company would take a specific side on the matter.

Look, kid, I am not particularly amped over taxes.

Ok, I guess that person is amped over taxes.

I mean, I’m more annoyed that I overpaid by 16%.

I am NOT gonna pay for Saturn’s rings… tax the people of Saturn for that!

See y’all next week!


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