Taxing Tuesday: Is Illinois a Low Tax State?
by meep
Bwa ha ha ha ha.
Okay, fine.
Wirepoints: Progressive tax proponents say Illinois is a low-tax state, your tax bills say the opposite
Gov. J.B. Pritzker wants you to think Illinois doesn’t tax or spend enough. “A fair tax system will allow us to eliminate the structural deficit that has plagued our state for nearly two decades,” the governor said in his first budget address.
But there’s plenty of data which shows Illinoisans are far from undertaxed. On the contrary, residents face one of the highest combined state/local tax burdens in the country. High taxes is one of the reasons why Illinois is losing more people than every other state in the country, bar New York.
Yet the low-tax myth is consistently repeated by proponents of the progressive tax, especially Ralph Martire, head of the union-backed CTBA. Illinois is a “relatively low tax” state he says, with “one of the 10 lowest combined state and local tax burdens.”
That claim is contradicted by analyses from a Chicago Fed economist to the Tax Foundation to personal-finance firm WalletHub. All show Illinois to be a high tax state once all state and local taxes are added up.
Pretty much. Read the whole thing – it has graphs and everything.
VALUE OF THE SALT DEDUCTION
I dug up this Tax Foundation testimony re: the SALT cap:
Prior to the TCJA, the top ten counties that claimed the SALT deduction were concentrated in four states: New Jersey, California, New York, and Connecticut.2 Six states– California, New York, New Jersey, Illinois, Texas, and Pennsylvania– claimed more than half of the deduction.3
Let’s look up their source. Ah, it’s their own research: The State and Local Tax Deduction: A Primer from March 2017.
The deduction favors high-income, high-tax states like California and New York, which together receive nearly one-third of the deduction’s total value nationwide. Six states—California, New York, New Jersey, Illinois, Texas, and Pennsylvania—claim more than half of the value of the deduction.
They have a data table farther down using IRS data from 2014.
Here’s a map:
(Looking at NY: We’re number one! We’re number one!) Fine, Illinois is only #10. That is far from being low tax, though.
But let us investigate how much the SALT deduction is to various states, shall we?
I want to graph the percentage of the “share” of the deduction benefit….
….AND compare it to the population by state, to make a fair comparison.
Are half the nation’s population in the 6 states receiving the benefit? First answer: no. They’re less than 40% of the U.S. population.
Fine, how about the state-by-state disparity?
Unsurprisingly, no-state-income-tax states (at least some of them) have the biggest deficits in receiving their share of the SALT deduction, going simply by population.
I will simply list the top six states for disparity between their share of SALT deduction benefit and share of population: (I’m listing the percentages)
1. California 7.4%
2. New York 7.1%
3. New Jersey 3.1%
4. Connecticut 1.5%
5. Massachusetts 1.4%
6. Maryland 1.3%
Hmmm. So. The states suing the IRS and federal government over the SALT cap get disproportionate benefit from the SALT deduction (CT, MD, NJ, NY). What a non-surprise.
WE’LL TAX YOUR WINE, FRANCE!
Last week I looked at the French attempt to tax U.S. tech firms. Obviously, Trump has something to say about it (even though the tech firms aren’t his buds):
Trump Says U.S. to Take Action Against France for Tax on American Tech Companies
President Trump promised to take “substantial reciprocal action” against France after the nation’s President Emmanuel Macron this week signed into law a tax on American tech giants like Alphabet Inc.‘s Google and Amazon.com Inc.
“France just put a digital tax on our great American technology companies,” Mr. Trump said on Twitter on Friday. “If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!”
Despite Mr. Trump’s mention of French wine, it couldn’t be immediately determined what the reciprocal action would target.
…..
In 2018, French imports to the U.S. totaled $52 billion, of which about $5 billion is alcoholic beverages, according to Commerce Department data.
Hmmm, about 10% of their imports. Are US tech services about 10% of our exports to France? No clue.
TAX STORIES
- Illinois Policy: PROGRESSIVE TAX UNCERTAINTY COULD TRIP ILLINOIS’ ALREADY-STUMBLING ECONOMY
- Kent Reporter: New annual income threshold to provide property tax relief in King County next year – Amount to go to $58,423 from $40,000. According to this, that’s at about median household income in the U.S. in 2018.
- Block Club Chicago: Logan Square Saw Highest Property Tax Hike Of Any Neighborhood In The City, Ald. Ramirez-Rosa Says
- Vanity Fair: AS DEFICIT EXPLODES, GOP DEMANDS EMERGENCY TAX CUT FOR THE RICH – it’s about a capital gains tax cut, and, specifically, to index the basis to inflation
- CNN: Brain drain claimed 1.7 million youths. So this country is scrapping its income tax — the country is Poland.
- Politico: Judge seeks compromise in fight over Trump’s state tax returns
- Forbes: Voraciousness Of The New York Income Tax And The Jersey City Solution
- Forbes: Don’t Be Fooled: IRS Is Still Enforcing Healthcare-Related Tax Provisions
- CBS Miami: Florida’s Back-To-School Tax Holiday Starts Friday
- LA Times: Those seeking access to Trump’s tax returns now wait for Gov. Gavin Newsom – this relates to a bill that would bar candidates from the ballot if they don’t release tax returns. This is probably unconstitutional… and, ffs, it’s California. Trump wasn’t going to win its electoral votes in the first place. This is a really idiotic move.
- The Hill: What to know about the fight over Trump’s tax returns – what to know: this is stupid, there will be no smoking guns in the returns, and the Congresspeople don’t even know how to look at these things in the first place [note: that’s not what the piece says. It’s what I said.]
- Washington Examiner op-ed: Don’t let Rashida Tlaib fool you: Tax credits aren’t tax cuts
- WSJ: Notable & Quotable: Blame Taxes for Baltimore’s Rot
- Reuters: Trump’s tax threat on French wine is ‘completely moronic’, says farming minister – as is your digital tax. So?
- Accounting Today: Jeffrey Epstein’s wealth boosted by Virgin Island tax breaks – nice ad for a tax haven
I think it would be hilarious if the ultimate “we must impeach!” group finally settles on the tax returns as the immediate cause for impeachment. They’re at a bit of a loss for what to pin it on right now.
TAX TWEETS
Why is Manafort facing 80 years in prison for tax fraud but Al Sharpton who owes millions in taxes has never been convicted, arrested, or tried for tax evasion?
— Charlie Kirk (@charliekirk11) July 29, 2019
Government must put our taxes to judicious use and Drop the #KillerTaxBudget pic.twitter.com/g3HPn5NSob
— Scholae (@ischolae) July 30, 2019
Whether you like it or not you will pay more Call and Fuel Tax …. Akufo Addo#KillerTaxBudget pic.twitter.com/DYvDKqTW5C
— Ing. Paul Afotey Quaye (@niiafoteyquaye) July 30, 2019
This is about taxes (and the budget) in Ghana. More here: Government increases ‘talk tax’ to 9%. They also canceled a luxury car tax.
#KillerTaxBudget Akufo Addo wants to be applauded for abolishing a tax he introduced ?
— Horny Bitch (@AmaTailor) July 30, 2019
I remember the NPP was defiant even when it was obvious the tax was ill-conceived.#KillerTaxBudget pic.twitter.com/hWfNBOD3Po
#BIGNEWS: #VGSiddhartha also mentions over alleged harassment by Income Tax Department in the letter. pic.twitter.com/WEPHyUATwL
— NEWS9 (@NEWS9TWEETS) July 30, 2019
Dear Govt of India,
— Rajeev Mantri (@RMantri) July 30, 2019
You cannot have welfare AND high taxes AND zero privatization of state-owned companies AND economic growth.
You have to drop one of those. Understand this or it will come to bite you in the ass.
Want to fix Baltimore? Tax the #KochBrothers and Adelson's at 90% of their income over $100 million. Make estate tax on estates of over $1 billion at 90%. End the oligarch class. Tax them out of existence and put the money to work for Americans. Right
— Tim Hogan (@TimInHonolulu) July 30, 2019GroverNorquist</a>? <a href="https://twitter.com/SenateGOP?ref_src=twsrc%5Etfw">
SenateGOP
ok which taxes are not "confiscatory taxes designed for redistribution"?
benshapiro</a> <a href="https://t.co/vGHRJnuxV2">pic.twitter.com/vGHRJnuxV2</a></p>— uberfeminist (
uberfeminist) July 30, 2019
Twenty senators have urged the Treasury to give the wealthy another tax cut via executive order. https://t.co/HjrahyitmY
— Linda Hill (@bulldoghill) July 30, 2019
Taxes and White claws pic.twitter.com/2t1dJnQ3r1
— QP (@ParrottQuintin) July 30, 2019
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