Wednesday, July 02, 2008

A Taxing Problem

This one is a little long, but I think that it's worth a read, so bear with me.

As part of the select group of citizens who have just seen their sales tax rate go up to 11.25%, (I've yet to be able to fathom the rationale that the businesses in my district somehow reap such a benefit from McPier that their customers should pay 0ne percent more than do customers of stores in the rest of the county), I share in the public frustration that our present level of taxation has reached its rational limit. So have taxpayers.

For too long, government has shown an inability to the very thing that is expected of homeowners on a daily basis - live within our means. Rather than make tough decisions in tough times, and (thankfully) without the federal option of printing more money, local governments have found themselves unable to resist dipping into the pockets of their constituents. If one person does it to another, it's called robbery. When the government does it, it's called taxation.

Taxes are like fiscal crystal meth for governments. They just can't get enough.

But between increased taxes on everything including bottled water at the city level, and a county sales tax hike that was shamelessly, almost offensively, coupled with the creation of over 1000 county new jobs, the sad fact is that local officials have let down the very people who have repeatedly elected them into office.

Now this isn't to say that there are not tax proposals that I think make sense. In the interest of full disclosure, I have long supported an increase in the state income tax, provided that the revenues would be used to address some of our structural budgetary shortcomings, such as our pension obligations. I have also advocated for a change in our sales tax structure that would better reflect the present-day service-based nature of our economy. But the unabashed ramping up of taxes to feed the insatiable beast that is government is simply no longer acceptable.

What about the state you rightfully ask? I think that the latest gamesmanship at the state level displays its own form of egregiousness. Trying to prey upon taxpayer frustration, the Governor is once again attempting to play the 'Speaker Madigan wants to raise the income tax' card. And it must be noted that his play is being made in furtherance of his shilling for his version of a much-needed capital bill.

But what would ordinarily be valid political posturing rings hopelessly hollow when one looks at the facts coming from the man behind the curtain.

Last year, the Governor pushed what may go down as the biggest failed proposal in the history of big failed proposals when he tried to force through his $8 Billion Gross Receipts Tax. In defense of his efforts to pummel Illinois' business community, the Governor trotted out his message that he 'would not tax the working men and women of Illinois'. (He had long given up on the whole 'reform and renewal' mantra, but that's a story for another day.) Never mind if those men and women would no longer have jobs if their employers left Illinois because of the GRT, he was simply not going to tax those working men and women. More power to him.

Sounds good, right? Well it might have until you look at his proposal to help balance the budget and to fund his capital bill proposal. While the Governor continues to blame Mike Madigan and the House Democrats for the out-of-balance budget on his desk (you know the one, the one that was also approved by the Senate, controlled by his staunch ally Senate President Jones; the one that the Governor was going to make critical cuts to, but then lacked the testicular virility to actually do it), he doesn't have much to say about his plan to help balance the budget and to fund his $34 Billion pet project. (And let's not forget the fact that the House also passed a no-growth budget, one which may have left a number of needs unmet until another day, but one which would have also resulted in us living within our means for a change.)

It turns out that the same Governor who simply would not, could not tax working men and women put forward a plan that is blatantly propped up on some of the most regressive taxation known to working men and women. The Governor's capital bill plan is premised, in large part, upon a massive expansion of gaming as well as a leasing of the state lottery.

Now I won't go into much detail on either one of these proposals, but let me say this. Gambling is the most regressive tax out there - plain and simple. Yes, it's self-selecting, and yes, more casinos here may help capture dollars going out of state and from out-of-staters. But at the end of the day, gaming revenues have historically come from those who can least afford it. (For the record, I have long opposed the placement of a casino in Chicago, and I additionally voted against the Rosemont bill several years ago.)

As far as the lottery is concerned, and without getting into the bigger picture issue of the wisdom of leasing state assets, two of the underpinnings of the lottery lease are to allow better targeting of 'key market demographics' (read poor and minorities), and a reduced number of winning tickets. Take more money from poor people and let fewer of them win. Yeah, that's the ticket.

So in sum, the Governor rightfully wants to improve our state's school, road and bridge infrastructure. On that part, I'm with him 100%. But the same Governor who was so adamantly opposed to any new taxes on the working men and women of our state wants to pave those roads and bridges on the backs of those very working men and women. I'm not buying it - and neither should the public.

I don't profess to have all of the answers, but when I look at what is going on at every level of government these days, I sure see a lot of problems.


At July 2, 2008 at 3:31 PM, Anonymous Anonymous said...

John -- I think you have the wrong rate. 11.25% is only for restaurant food (with the McPier 1% tax). Everything else is 10.25% (which is bad enough)

At July 2, 2008 at 7:19 PM, Anonymous Joe S. said...

"While the Governor continues to blame Mike Madigan and the House Democrats for the out-of-balance budget on his desk...."

I am no fan of the Guv. Let him twist in the wind. But when the General Assembly passed an unbalanced budget, is it really his fault? Isn't the GA lacking "testicular verility" in not presenting a balanced budget?

At July 2, 2008 at 7:29 PM, Anonymous DuPage Saint said...

Your answer is the last sentence "every level of government". Every level taxes, we need a con con, get rid of twownships, consolidate and eliminate. Everyone is a king now (or a queen) and the first rule is spend spend spend, tax tax tax and elect elect elect. Here comes the revolution.

At July 3, 2008 at 7:01 AM, Anonymous Anonymous said...

How about joining the 20th century and moving state employees from pensions to 401(k)s? How much would that save the taxpayers?

Time for the ruling class to retire your powdered wigs, John.

At July 3, 2008 at 10:11 AM, Blogger Extreme Wisdom said...


Why not propose a grand bargain with the people of the state...

A removal of the income tax caps along with permanent, hard, no excepted streams of revenue, SPENDING caps. (inflation + population growth) for EVERY IL entity? Allow for a 60% referendum to break the cap.

You may or may not agree, but raising IL income taxes with out serious and robust spending restraints will destroy what little tether IL has to being a "business friendly" state.

People and businesses don't have to stay in states that are profligate. If you and Martire get your HB750, you will succeed only in depopulating the state of the upper middle & middle class necessary to keep it vital.

I can't speak for Bill Brady, but the "Brady-Fritchey" compromise sounds like a good name.

Forget the greedy teacher's unions. After this passes, you won't need them.

At July 4, 2008 at 12:14 PM, Anonymous lake county democrat said...

It's not just the governor blaming Mike Madigan, especially of late. Caution: Fleas. Dogs. Lay.

But anyway, I don't think most people would be upset at higher taxes if they didn't think they were being squandered -- it's not the pensions that enrage (not that they aren't a problem, but it's complicated -- many civil servants get paid lower salaries than the private sector and the pensions help make up for that).

It's when nurses are cut but Todd Stroger's family is fattening up on the county budget. It's when we can't expand state health insurance measures but we're throwing millions just at the chance to host the Olympic games. The state government acts like Pilate -- is it unfair to think that you all could make Daley and Stroger's life a living hell if you wanted to, not just with the bully pulpit but by sticking some private auditors onto any local program that gets state funding. You all could say "Mr. Mayor, we don't believe you when you claim to have no knowledge of [insert stream of corruption here]. We think it's outrageous you're trying to get out of the Shakman decree." But of course the ultimate blame lies with us, the voters. We grumble, but we eat this dirt that is being shoveled. Give us a basic delivery of services and we'll let you all do what you want (I'd cite the famous line from Mussolini that "the trains run on time," but that's one service they're still working on...)

At August 22, 2008 at 9:03 PM, Blogger brettlee said...

If we join the 20th century and move state employees from pensions to 401(k)s?How much would that save the tax payers. They can afford to pay the taxes only if they receive pensions.
Illinois Drug Addiction

At August 22, 2008 at 9:07 PM, Blogger brettlee said...

If we join the 20th century and move state employees from pensions to 401(k)s?How much would that save the tax payers. They can afford to pay the taxes only if they receive pensions.
Illinois Drug Addiction


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