The Illinois Tax Increase: “Legislators ought to hang their heads over awful income tax deal”

There will come a time when all sides can dispassionately discuss the great Illinois income tax deal of 2011.
Today is not that day.
Today is a day for anger. Our Springfield leaders have failed us in producing a one-sided monstrosity that will cause true pain, avoids needed decisions, makes it markedly harder to get a job in a state with too few and, worst of all, won’t really solve the state’s fundamental budget problems.
I wish this normally left-leaning blogger could report otherwise. I can’t. This one is indefensible.

Greg Hinz gives the horrible details.

As our colleage Carl from Chicago so aptly puts it: Stone-cold redistributionists run our state.

Greg Hinz concludes:

So, the folks who run Springfield can talk about how they made the tough decision. But, I think, they instead acted like another fellow who just decided to grab everything he could get. That would be Todd Stroger, father of the nation’s highest sales tax and, as of this writing, the former president of the Cook County Board.
We’ll have to see how the taxpayers of Illinois react. But if this taxpayer is typical, watch out.

Greg is right. But it is a long time until the next election.

15 thoughts on “The Illinois Tax Increase: “Legislators ought to hang their heads over awful income tax deal””

  1. The people of Illinois just voted for this, in selecting their Democratic Governor who told them he preferred raising taxes to cutting public employees’ future pensions. This happened in California too, where we have the same kind of voters as a majority.

  2. yes, what can be done when a large majority of the state’s voters actually favor this kind of thing? just wait for total collapse and de-population i guess.

  3. Cjm,

    People are voting with their feet in California, but collapse is not imminent.

    I predict, though, that this Illinois tax increase will produce only 60% or less of the expected revenue. The same thing happened last year with a major tax increase in Oregon.

    IMO the big blue states like California, Illinois and New York won’t address their public pension problem until the federal income tax deduction for state and local taxes is eliminated. The latter is a just a subsidy from red states to blue states, but the former haven’t figured it out yet. Change won’t come until after years of educating the voters about this.

  4. I read in the Hinz column that they eliminated loss carry forward offsets for corporations until 2015! Wowzers!

    I hope the anger I am seeing from Lex and others is real – I just have been wondering forever how long the people will keep taking it.

  5. Dan,

    What is really necessary is to change all defined benefit public pension plans into defined contribution plans for employees with less than ten years seniority, and substantially increase the contribution requirements for employees with more than ten years seniority who are under the age of say, 55. Plus terminate any health care benefits of public pension plans for as many employees as possible under the Constitution’s prohibition against the impairment of contracts.

    These two changes are IMO inevitable because the money to pay future public employee retirement benefits just isn’t there. The longer these two changes are put off, the higher the age cohort they will affect when they are finally imposed.

    I also feel that the termination of public employee unions is inevitable because, again, the money to pay their inflated wages and benefits just isn’t there. Margaret Thatcher’s comment that, “They [socialists] always run out of other people’s money” applies here.

    These changes will come only over the dead bodies of public employee unions. “DARVIN: I don’t know. I never saw one before in my life, and I hope I never see one of those fuzzy miserable things again.
    BARIS: I’m certain that can be arranged, Darvin.” The Trouble With Tribbles, Star Trek, Season Two.

    IMO a number of things must happen before public employee unions are prohibited in the US, and one of those is termination of the federal income tax deduction for state and local taxes. That would have an enormous impact on the blue states presently dominated by public employee unions. IMO that will happen eventually, but just when is speculative.

  6. Illinois is blessed with neighbors that are eager to eat it’s lunch. Reformers will have lots of examples to point to going into, and after the next election. It is a real shame we are stuck with the next two years of idiocy.

  7. Lex – in the short term (I am talking the next decade), the border states are all going to eat Illinois’ lunch and many of those people/business will never come back. But Mitch Daniels (gov. of Indiana) in a recent interview said that it is important for Illinois to eventually get back on its feet for the region as a whole to move forward. I think that is right.

  8. I don’t see the problem here. Illinois has a republican government as guaranteed by the Constitution under Article 4. The people have properly elected lawyers (and a few others, probably by mistake) who represent their wishes. Guided by the will of the people, these representatives have enacted lawful legislation. Tax increases are not a mistake: they are the will of the people.

  9. Dan says ” Mitch Daniels (gov. of Indiana) in a recent interview said that it is important for Illinois to eventually get back on its feet for the region as a whole to move forward.”

    Pure political rhetoric Dan. In reality Mitch must be rubbing his hands at the thought of Illinois businesses moving overseas…to Indiana.

    Illinois government never, ever gave a crap about “the region” unless it was within the Illinois state boundaries. I offer the Gary airport as just one example.

    Instead, Illinois pushes for an airport built from scratch on the fertile green farmlands of Peotone or the costly and dangerous expansion of an overcrowded O’Hare.

    The Gary Indiana airport currently exists twenty five miles from State and Madison. If expanded with a minimal investment it could serve as a third Chicago airport able to at least handle regional air cargo thereby reducing the need for a third airport or expansion of O’Hare to handle the increaseing air traffic. Gary could and should be the “regional” cargo hub and provide economic relief for the small and depressed northwest corner of Indiana that has suffered from the loss of industry.

    Due to powerful Chicago and Illinois influence in D.C. there is little chance that a “regional” effort for an Indiana airport, or third Chicago airport in Indiana is possible.

    That’s the way Illinois does business, with little regard for “regional” considerations.

    Mitch is being kind. It”s economic payback time and it is my hope that Indiana wins. No. make that I hope Indiana “kicks ass” and prevails when it comes to Illinois’ poor planning and elected government malfeasance.

  10. I don’t mind if Indiana kicks Illinois’ ass one bit and I hope Wisco does too. If IL wants to run the place like a third world country with all the patronage and corruption, they get what they deserve. I do think that Daniels is speaking the truth when he is talking about the region. It would only help Indiana if the sick children like IL and Michigan would bet back on their feet.

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