STUMP » Articles » Taxing Tuesday: Illinois Tax Persiflage » 19 March 2019, 05:58

Where Stu & MP spout off about everything.

Taxing Tuesday: Illinois Tax Persiflage  

by

19 March 2019, 05:58

I usually put the tweets at the end of a post, but this one caught my eye.


So that supposed $3.4 billion is pure made-up bullshit.

Wooo.

But really, trust us! Just change the state constitution to allow for all sorts of arbitrary taxation! We’ll totally use it in a responsible manner!


Looks like They did release a breakout, and I have no idea how credible those specific numbers are.

Waiting For Pritzker Administration To Backward Solve For Its Revenue Claims – Quicktake:

The Civic Federation took a close look and said it “has not been able to replicate the $3.4 billion number and the Governor’s Office has not yet provided information about the methodology used to arrive at the figure.” The Illinois Policy Institute has been particularly critical. In response to their FOIA request for the administration’s basis for its projection, the administration said it needed more time.

Our own back-of-the-envelope calculation indicated a lower estimate than Pritzker’s, too. We didn’t make a more serious effort or share ours because we have only 2016 information on stratification of Illinois income groups to work off. That’s the latest we could get from our own FOIA requests, from the Rauner Administration as well. That, too, is inexcusable – more current data should be publicly posted.

The document posted should be easy to check.

So let me check it:

2016 numbers: 62,137,674,453
New numbers: $ 80,627,028,570

Let’s do a ratio: 80.6/62.1 = 130%

Is 7.95%/4.95% the same?

Hmmm, that’s 160%.

Let’s see what they have to say:

The team assumed that 10 percent of filers with net income more than $1 million and less than $2 million would try to capture a lower marginal rate. This is an extremely conservative assumption. In reality, only filers who have a net income between $1,000,000 and $1,009,305 would pay more in taxes than they would receive in income above $1,000,000 when the 7.95 percent rate is applied to all their income.

Okay, so, I don’t know the distribution of taxpayers above $1 million in income. The numbers look semi-plausible.

TAXES TO INCREASE TIL HUNGER IS FILLED

The WSJ editorial mentioned above: Pritzker’s Illinois Exit Ramp

Illinois has been a fiscal mess for years, but a saving grace has been that the state Constitution mandates a flat tax rate that is now 4.95% on personal income. This makes it harder to raise taxes because politicians have to include the middle class. Now Governor J.B. Pritzker is bidding to blow up that safety valve with a progressive tax that would drive even more taxpayers out of the state.
…..
Mr. Pritzker claims his “fair tax” would raise $3.4 billion in new annual revenue. But when the Illinois Policy Institute crunched the numbers with Mr. Pritzker’s new rates, it came up $1 billion short. When it asked for the math and assumptions behind his figures, the Governor’s office asked for a delay because it didn’t have the information in hand.

Aka, they just made shit up. Because math is hard, and they assumed nobody would check.

The Tax Foundation says the Governor’s proposal would catapult Illinois into the ranks of states with the worst tax burdens. Corporate income would be taxed at 10.45%, the third highest rate in the U.S., while pass-through business income would face a top rate of 9.45%, fourth highest. If the Governor manages to enact all that he’s proposed, Illinois would drop from 36th on the State Business Tax Climate index to third worst after New Jersey and California. Congratulations.
…..
With his proposal, Mr. Pritzker is doing the bidding of the state’s public unions, which have long run the state through the office of House Speaker Michael Madigan. Having run Republican Bruce Rauner out of town after one term without reforming any part of government, these rulers for life now want to eliminate the last fiscal restraint in the state.

As it happens, all of this was predicted by no less than investor Warren Buffett late last month. In a Feb. 25 interview on CNBC, Mr. Buffett warned investors to avoid states with large unfunded pension liabilities. He said he couldn’t be sure how such states would try to bring in more revenue—whether by raising corporate taxes, personal income taxes, or a combination. But he had no doubt the taxes are coming.

Because those pensions must be paid.

(Until, it will be magically discovered, that they can’t be paid, because the tax base eroded. This is why pensions must be pre-funded. If they’re not…bad things can happen.)

When he looks at the billions that some states owe, Mr. Buffett said he asks himself: “Why do I wanna build a plant there that has to sit there for 30 or 40 years? Cause I’ll be here for the life of the pension—plan—and they will come after corporations, they’ll come after individuals. They—just—they’re gonna have to raise a lotta money.”

Mr. Buffett didn’t mention Illinois specifically, but everyone knows that’s one of the states he is talking about. With his tax proposal, Mr. Pritzker has now confirmed everything Mr. Buffett said.

I mean, why locate in Illinois?

The state Legislature can change the state Constitution with a three-fifths majority in both houses, which Democrats have, and then if voters approve it as a ballot measure in the next election. If they succeed in replacing the state’s flat tax system, the Illinois tax-rate increases won’t stop at 7.95%.

I agree. (SALT cap zero! Now!)

TAX STORIES

Yes, there’s one from Trump there (I think it’s the one Rachel Maddow hyped.)

TAX TWEETS






Huh, video games are good for something.


I’m starting to see people comment on how they’re spending their tax returns.

(I bought myself a new computer)


It’s not the federal government’s fault you live in a high-tax location.

(SALT cap zero!!!)

“All the exact numbers don’t really hit you until you’re there,” said Ryan Mills, 30, of Vero Beach, Florida, about moving from a $400,000 house to one valued at $1.1 million. He concedes it’s “a first world problem,” but said owing taxes was “a little disheartening.”

Did they even check who they were quoting?

None of these people are “middle class” under any reasonable definition. Buying a $1-million-house when you’re 30?! I’m in the top 10%, and I can’t afford a $1 million house.

As for Fawcett, the New Jersey homeowner, she said she understood the law meant she’d pay more, and that people who live in low-tax states aren’t likely to commiserate. “But it was still hard to swallow,” she added.

I live in a high tax state, and I have no sympathy. Jeez.


Related Posts
Taxing Tuesday (on Monday): Trump Taxes! Surprise Money! Or Not!
Taxing Tuesday: The SALT Cap Battle Continues
Taxing Tuesday: Not Too Many Interested in Iffy Way to Avoid SALT Cap
| Main |