Tomorrow is Tax Day, so to celebrate accordingly we’ve got a roundup of tax news from Illinois.
The excitement from that announcement can be felt reverberating all over the state. And yes, that was sarcasm, but as Benjamin Franklin once said, “In this world, nothing can be said to be certain, except death and taxes.”
In a nutshell, taxes are important and need to be addressed. Especially in Illinois.
While lawmakers are taking a recess from the spring session in Springfield over the next two weeks, they have some serious tax votes looming on the horizon. The Associated Press’ Kerry Lester has more:
With six weeks left in the spring session, Democrats must weigh the political risks of extending a tax hike in a year Republicans are making streamlined government spending a focal point in their campaigns for governor and legislative seats.
Lawmakers could make the 2011 temporary income tax increase permanent or change the state’s tax code from a “flat” tax, where everyone pays the same rate, to a progressive system, which taxes higher earners more.
House Speaker Michael Madigan last week abandoned a third proposal that he’d floated, to boost education funding by tacking a 3 percent surcharge on all earned income more than $1 million. Madigan couldn’t get enough votes to push his plan through the House, despite a Democratic supermajority of 71 members.
Beyond the partisan divide, the Democratic caucuses in the House and Senate face internal battles.
“Outsiders think that as a Democratic majority we’re monolithic,” said state Rep. Jack Franks of Marengo, who was one Democratic vote against the millionaires tax, and is opposed to the other two tax proposals as well.
All 118 state representatives and 19 of 59 state senators are seeking re-election.
This year in particular has seen politicians in Springfield and in Chicago push hard to raise taxes. But why? The Chicago Tribune editorial board believes they know why the politicians are so frantic to raise taxes.
Here’s some of what the editorial board has to say:
Millions of Illinoisans have come to know this decade as among the most treacherous in two centuries of statehood. It’s a time of paltry growth, of stubborn joblessness that ranks second nationwide — yet also a time of headlines about this or that politician, rushing pell mell to raise taxes. Those officials have cornered themselves: The imbalance between the spending they (or their predecessors) foolishly promised and their current revenue really is that huge.
We have arrived at what finally looks to be a pivotal juncture in the darkening arc of Illinois history. More politicians are coming to realize the truth that Madigan spoke three years ago. It is, as he partially admitted in a House debate last week, a truth he helped create:
Illinois is overpromised, overspent, overborrowed. Present trajectories point to doom. So the race for luscious new revenue is quickening.
Meanwhile, one of the taxes Madigan proposed has had the plug pulled by the Speaker. It’s a curious case of the vanishing millionaire tax in Illinois, but University of Illinois at Champaign-Urbana political science professor Brian J. Gaines lays out why it happened in an op-ed column in the State Journal-Register.
So why is the surtax off the table? Constitutional amendments always are hard to pass because they require super-majority support. Even with a commanding 70-47 edge in seats, Madigan could pass the bill only with universal support in his own Democratic caucus. He could not lure any of the minority party to his side to make up for a few tax-shy Democrats.
Or the surtax was never anything more than a red herring floated to generate headlines, to force ultra-wealthy Republican gubernatorial candidate Bruce Rauner to take a position that could be held against him in the campaign, and maybe to provide something for vulnerable Democrats to oppose so they could brag of their independence from Madigan.
A still more interesting explanation is that the public’s appetite for raising taxes on the rich is weaker than poll results suggest. Two-thirds of the same survey respondents, asked to estimate federal income taxes paid by those making $1 million a year, answered at least 10 percent below the actual effective rate, which is about 25 percent, according to IRS data.
Want more tax content? Of course you do! Read on.