Illinois is NOT broke, but our Tax System is!

HUH??? But all the media says Illinois is one of the worst business states in the universe!!!! If ET had landed in Illinois, he'd still be stuck! Sure...don't ya just love the crap the right/rich/corporate/take you pick like to try to shove down our throats? Too often it works because sound bytes and snappy little phrases work much better for people who don't feel like they have the time or the knowledge to understand these things. Oh, and you know its MY fault Illinois isn't paying its bills...so, what are some facts? 

First: Illinois has the least amount of state employees per capita than any other state, yes, that means that even Mississippi cares more for their residents than we can. You can't lay off more employees, because many places are down to bare bones minimum to begin with. 

Second: Why make cuts???? Our tax system is antiquated and needs to be updated. We also need to get rid of a couple tax laws that either aren't needed any longer or are not needed in a time when we, the middle class, state employees and/or retirees, are expected to pay more while the corporations are paying less.

So, some facts about the tax system. In my last post, I spoke about the difference between our flat tax and a graduated income tax, like all of our neighbors have('cept Indiana):

• Iowa: 9 rates that start at 0.36% to 9% (rate is higher than Illinois at $12K-6.12%)
• Kentucky: 6 rates that range from 2.0% to 6% (rate higher than Illinois at $5000)
• Missouri: 10 rates from 1.5% to 6% ( rate is higher than Illinois at $9,000)
• Wisconsin: 5 rates starting at 4.6% to 7.75% (rate is higher than Illinois at $13,580 - 6.15%)
• Indiana: 3.4%--ok, they're lower, but...its Indiana(spoken like a true FIB).

OMG!!! LOOK--all of the states have rates that actually are higher than ours at the top end! How could that be??? You mean all those fine business/media types have been lying to us?!?!?!?? Sure seems that way.

Not only that, but all, including Indiana tax services as well as goods. In other words, they have broadened the sales tax base.  So, what services? Dining, marina fees, landscaping, dry cleaning are some that were in a bill a couple of years ago(that also included seniors being able to get a property tax rebate on income taxes-now its just a credit). And how do those state sales tax rates compare?

• Illinois:       6.25%          Indiana:   7%
• Kentucky: 6%                Michigan: 6% 
• Iowa:        6%                 Missouri:  4%

Illinois is not out of bounds on sales tax, in fact it looks like we're about the same place as everyone else. 

Another area that we could set up a tax is on financial transactions--sales of stocks, etc., not withdrawing $100 from your savings. Again, this is something that would be small, but effective in 2 ways: first, more revenue, second-more stability in the market and less fluctuation--think gas prices and how they've been manipulated in the last couple of months by speculators...same thing can happen statewide vs. nationwide.

So, now that I've begun to get Illinois out of the trash bin that others have built for her, I've got a couple more ideas...

Large businesses in my state get a much larger piece of the tax cut pie than small and medium sized businesses, specially in the area of the "Single Sales Factor"(I will try to explain this later in another post because its very, very, wonky), suffice to say that this bomb allowed Caterpillar to pay NO sales tax in Illinois, this costs us about $600 million annually! But there are 2 other cuts/credits that businesses receive that just don't seem very fair:  the Retailer's Discount on Sales Taxes and Accelerated Depreciation.

Accelerated depreciation is very easy to understand. Some businesses get to depreciate equipment (computers, cars, JETS) at a faster rate than other businesses--doesn't sound very fair to me.

The Retailers Discount goes sorta like this---I go to a store, buy $100 worth of clothing and pay the 6.25% state sales tax. The retailer then sends the $6.25 to the state at the end of the quarter/year, right? Nope. This  tax cut allows the retailer to keep some of the sales tax. It was established years ago when it was more difficult to figure out the taxes in a small window of time. My idea? To the State legislature...ummm, we have computers now, this problem is alleviated! Get rid of this giveaway NOW! 

Yes, Illinois needs to budget the balance, but there are many ways to balance that would be fair to the state employees, the retirees and to all of the people in Illinois, not just kow-towing to the Chamber of Commerce and the Chicago Civic Federation.

The state of the State of Illinois-it ain't broken

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.

DuPage Republican campaigns, AKA Mean Girl vs. Jock bully

I opened up my local newspaper today to see an "Election Guide" interviews for candidates on why we should hire them for the next 2 years. Since I live in a red-leaning area, this usually means that I'm not gonna be represented very well. We've been getting a lot of campaign compost(the stuff that's sent through the mail that you really don't pay much attention to--just throw it into the recycling bin)  and I noticed a bit of "Republicans Eating Their Own" going on....hmmm, could be a bit entertaining.
I live in the 81st District(State house) and we(Democratic Party) don't have a candidate running this time and although I know I'm not voting for either of them(thinking I'll write in Noam Chomsky, even tho he doesn't live in the district), I found myself researching both to see how mean spirited the local election may be...
First, we have Ron Sandack, who's best known in our area for being anti-worker and getting into a pretty large bruhaha with the fire fighters and the police officers during contract negotiations. Oh and some pretty mean-spirited words towards others that don't agree with him. See, Mr. Sandack doesn't believe in allowing employees to have pensions...actually doesn't like them having many rights at all. His history is of a corporate lawyer who represented banksters and other financial institutions, not the little guy. He has a "business litigation and business transactional practice" which represented small and medium businesses involved in civil action, employment litigation matters; read: anti worker/labor/consumer. And the business transactional practice? Making sure his client gets as much as he can out of the poor sot going through a bankruptcy, foreclosures, etc. Yes, it could be between two businesses(over 70% of all court time is spent on a business  suing another business or business suing an individual), but the business acumen usually wins over the little guy...
Now, Mr. Sandack was DG mayor and seemed to enjoy belittling council members and others who did not agree with him, to the point of some thinking him abusive with his title. In fact, at least one newspaper contributor(more editorial than reporter) has also seen the wrath of this jock bully--if they don't agree with you, intimidate them; such a patriotic, adult thing to do.  He's also made many disparraging remarks against public employees, specially fire fighters and police by saying that, "When I meet retired firefighters and police, I thank them for their service and then tell them they(stuck the taxpayers for pensions)are on the dole, we shouldn't have to pay for them after retirement". Lovely man, eh? People risk their lives everyday  while working and this idiot wants them to oh...I don't know...finish off being a greeter at mallwart???? 
And there is the rub(one of them) with me, I worked and paid into my pension for about 28 years and this guy thinks we're living lavishly! I know people who are living on about $1000 a month(and no Social Security) and he talks about "lavish pensions". Well, he made a big deal about refusing the lavish pension and health care benefits when he was appointed to finish off the state senate term, but he isn't even close to being vested, so I don't know how big a deal that is. He does take the salary. He is still listed as one of the attorneys(and a partner) at the law firm so I'm pretty sure he already has health insurance and some type of retirement plan and receives at least a percentage of the profits.
In the Senate his voting is your regular republicon style-- he voted against SB 4 which increased the amount of exemptions over a 3 year period for all taxpayers, increased EIC over 3 years for the less fortunate tax payers...it passed without his graces. Guess some of our legislators do care about the little guy. He also voted against civil unions, refuses the idea of gay marraige...and, yes, he's anti-abortion and will not vote for marijuana legalization...have I hit the far left pinko knee jerk items for my 'con friends? He loves to say how Illinois is 48th in job creation, although in the past year Illinois has created more jobs than Indiana, Wisconsin, Missouri and Kentucky(hmm, didn't know we had 52 states) and Illinois is just toxic to businesses...although we have the 5th largest economy in the country...and if we were a country our GNP would be greater than Saudi Arabia! Nope...he must not have studied economics or facts...but then we do have the mean girl to consider...
Deborah Boyle has lived in DG all of her life. In 2006, she requested a boundary exemption from the school board because all of her family had attended Downers Grove North and she wanted her son to attend there also...funny thing...I wanted my children to attend DGN so I bought my house in that district! Imagine that! So anyway, the district denies the boundary exemption, Ms. Boyle sues the school district...and loses; again, imagine that! Its not that the school her son would be going to was not up to par, it was just cuz of the family tradition and I guess Ms. Boyle thought she was above the rules.
So a couple of years later, she runs for the school board. I remember her candidate interview and when asked if she attends school board meetings, she replied no, she felt they were a waste of time or something like that. So why run for the office? I thought to myself that anyone that voted for her either was a moron or didn't pay attention...to this day I wonder how many were just morons, because she won. Let the fun begin.
It seemed that every meeting now became a battle, to the point that Ms. Boyle seemed to pad the audience at least at 2 meetings(one that I was at) Ms Boyle took it public, that's when I learned that she sued the school board because she blamed the other members as holding a grudge against her because of the lawsuit. Her biggest and most public outburst was because the board had this silly little policy that if a board member had a family member that was employed by the school, the board member must recuse him/herself. Again, Debbie feels that policy shouldn't apply to her even tho her brother works for one of the high schools. Now, she could vote on anything but employee benefits(salaries & insurance, etc.), but you'd have thought the board had told her she couldn't vote on anything and locked her in a closet! I sure wish they had about then, but no. The board changes the rules and Debbie finally gets her way, I guess. Our very own Caribou Barbie, without her shooting moose.
Now she's running against the jock bully for state rep. She does the perfect mean girl about how Sandack was endorsed by a Teamsters local once in early 2000's so that means he's actually a friend of unions(I figure the Teamsters didn't know what a jerk he was until the next year...and haven't endorsed him since). He sends out flyers about how much havoc she caused on the school board and yells about how he's the true conservative. She flings back that she is the true conservative because the tea party endorsed her! And Sandack voted for evil liberal things...like....the smart grid! OH MY GOD, how heinous. And he's being mean to her.....sorry, but she reminds me of the blond in Mean Girls that gets hit by the bus.
So, where do these candidates stand on the issues? Both want to bring back the death penalty, strip employees' pension rights, cut taxes for those poor rich people, trim government(even tho Illinois has the least amount of state employees, per capita in America, they want to cut more) and so on and so on and so on. So for all their bickering, they pretty much agree on most things...just trying to see who can be meaner or more of a bully to the working stiffs of Illinois District 81.
Let's see how I feel next term...we need some reps that actually care about the people, not the corporations.