The Chamber of Commerce and the Chicago Civic Federation have been jumping up and down about how Illinois is broke and its all "my" fault, being a retired state employee who receives a pension that I put up to 9% of my salary into....naw, I don't have an issue with their lies....but anyways.....
First, nothing to do with finances directly, but Illinois received a "C" in public integrity, placing 10th in the nation...yep, there are 40 states that are worse than Illinois and that includes all the ones that surround us, imagine that. Yes, we've had our share of corrupt politicians, but ours actually end up in prison or at least indicted and out of public office.
So, back to the financial state of Illinois. I do agree that our tax system is broken, but not because its too much...its broken because its a "flat tax"--everyone alleges to be taxed at the same rate...not really. We have an antiquated tax system--flat tax, no taxes on service(unlike the surrounding states). We have not actually changed the tax structure since the 70's, partially because to change the flat tax, we need an amendment to our constitution, but we do need to do something.
So, how broke is Illinois? Not very. Illinois has the 5th largest economy in the United States...and has been for over a decade! Obviously, some people are doing all right in the Land of Lincoln. Much of this is in northern Illinois--Cook, Will and DuPage counties. So why do we have such a problem with paying our bills? Greed?
I do believe that part of the problem is greed, considering the disproportionate income/wealth inequality that has developed in this country in general, but in Illinois we also have a very unfair tax system, the one that so many right wing folks dream of--the flat tax. The idea is that everybody pays the same, and that's more fair than a progressive income tax.
So, why is a flat tax unfair? It seems to be fair, a guy making $10K pays the same as a guy making $10M, right? Wrong...
The less income you have, the more you pay in taxes, when all taxes are considered. The Center for Tax and Budget Accountability is a bi-partisan non-profit think tank that promotes fair, efficient and progressive tax, spending and economic policies--the definition on their website. This group has been instrumental in research on different ways to end the funding problems in Illinois and make it a better system for all Illinoisans, not just the top percentage.
In February of this year, the CBTA issued a report on why Illinois needs an overhaul of the tax system and why the flat tax is one of the most recessive ways of taxing. The first graph in this report shows the different taxes we all pay, Sales/excise, property and income. People making $18K or under spend 13.7% of their income on taxes...people making $500K and over? Only 5.3%! Now, if you're sitting there with the idea that, "well those poor folks should try harder...they're the burden"...if you make under $50K, you're still paying about 12% of your income on taxes. So how fair is it that we (middle class) should pay more than the wealthiest? I'm not talking about a percentage point or so, its almost 7% difference! This report also points out that the bottom 60%(making up to $58K annually) of working people in Illinois bring home less than they did in 1979! And our taxes really haven't changed much since the 70's.
Part of the reason that Income tax is such a big issue is that its the only one that can be controlled by our present situation. For example, I'm very lucky and I'm making $100K...all of a sudden, the company I'm working for closes up and all I can find is a job as a barista making $20K...with a progressive income tax(and to a point, the regressive income tax), the tax automatically adjusts. That doesn't happen with other types of taxes...I can't go to the gas station and tell them, "I can't pay that much right now cuz I lost my job"...best they may do is say, "Fill out an application, we're hiring", that is if they don't laugh me out of the door....
So, you're still cynical...."What about cutting spending? We all know that the government spends too much!" that might work somewhere else, but Illinois is 47th in the country when it comes to spending and we are 50th when it comes to state employment rolls(not the lowest in number, but as a ratio of state employees per capita). If we go along with some of the budget cuts that are running around, we are not only putting more people on unemployment, we are putting the clients in danger. Illinois does not act like a drunken sailor on Friday night, more like a spinster librarian on Sunday morning!
"What about all of those businesses that would move?" Hasn't happened yet. Remember when WI and IN scab governors put out ads and billboards about the great business climate in their states? In the last year, Illinois has gained 30K jobs, while both IN and WI have lost thousands of jobs....hmmm....but, then again, our tax structure does some other interesting perks than others for business, such as a retailers discount on sales taxes. Huh? This began years ago when it was difficult for retailers to figure out the exact amount to send to the state...we have computers now...I think we can stop this practice. I'll have more tomorrow-this has gotten reallllll long and I'm hoping you haven't fallen asleep.
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