More on Illinois’ income tax increase –thinking about globalization
by Linda Beale
More on Illinois’ income tax increase –thinking about globalization
crossposted with Ataxingmatter
As states continue to face difficult times and vulnerable residents unemployed by the Great Recession come to the end of their ropes with the last of their unemployment support checks (those unemployed for 99 weeks don’t get any more help under the latest extension), the rhetoric continues to escalate.
As I noted in my last post on Illinois’ decision to increase its personal and corporate income tax rates (See Illinois Senate Bill 2505, signed into law by Gov. Quinn on Jan. 13), tax increases–especially those that require people and companies of wealth and power to kick in a fairer share of the tax burden–may well make sense even as the country deals with the continuing fallout of the banksters’s binge of casino speculation. Governor Quinn noted when signing the Illinois legislation that the tax increase was need to stave off fiscal insolvency. The 5% individual income tax rate applies until January 2015, at which time the rate reverts to 3.75% for ten years and then 3.25% after 2025.
The right wing’s preferred solution– to see the states fire public employees or at the least reneg on their earlier commitments to fund pensions (which generally permitted them to hire highly skilled employees at lower wages than would otherwise have been possible)– would only make grave matters much worse. There are important programs to be funded in the states, and ultimately a higher tax burden that is allocated to those who can best pay it may be the best solution. Management efficiencies need to be undertaken, and wasteful spending and corruption stifled, but in many cases those savings are relatively small. The “no new taxes” mantra that has dominated public discourse under the Chicago School thinking has kept states from dealing forthrightly with these issues for decades.
Wisconsin’s new governor, right-winger Scott Walker, is a perfect illustration of the zany rhetoric and gamesmanship being played about tax matters all across this country. He has said he would spurn federal stimulus money and ditch a planned high-speed rail line between Madison and Milwaulkee. See James warren, Wisconsin Sounds Off, but Misses the Point, New York Times, Jan 15, 2011. High speed rail is the wave of the future, and the US needs to catch that wave soon or be left behind. Walker’s rhetoric here seems designed to please wealth and power (and the kooks in the “tea party” who are foolish enough to think that federal monies for infrastructure is a waste of “their” tax money), but move the state in the opposite direction from where it needs to go. Walker has also gone on the air in a campaign intended to take advantage of corporate dislike of the Illinois tax hike, inviting corporations to “escape to Wisconsin.”
James Warren’s piece in the Friday New York Times challenges that sentiment. Seems that the Illinois personal rate (5%) is probably less than taxation under the progressive scale of 4.6% to 7.75% in Wisconsin. And if Caterpillar or some other big corporation were to move to Wisconsin, it would face a higher rate of 7.9% compared to the 7% rate passed for Illinois. So Walker’s rhetoric is just that–trying to make hay out of the mere fact that Illinois increased its tax rates. As Warren points out, politicians need to start thinking about what is good for the region and “not just poach others’ enterprises”.
We need to think strategically, as globalization has made it much easier for companies to move to greener pastures–not just other states, but out of the states. Congress could help that by eliminating the provision in the Code that permits companies to move active business assets abroad without paying tax on the built-in gain. In fact, Congress ought really to consider revamping the entire reorganization provisions in the Code. We have seen that too big to fail banks are costly for us. Rather than aiding consolidation of companies through nonrecognition provisions, what if we made reorganizations more difficult and costly? Combine that with a renewed anti-trust vigor, and encourage smaller businesses to stay in this country. Localvore could take on a new meaning.
If the Business want to relocate, fine, but not at the expense of the citizens as a whole. The big hole no one is willing to address, is that if there is a need, other smaller businesses will fill it. Anti-trust laws need to be inforced, reinstated, what ever it takes to change this downward plunge the country is in today, before it crumbles beyond the band-aid approach that’s presently applied. The time to reverse course is now, for the Government to stop letting the mouth write checks that the ass can’t cover, because that big bad ass hungry monster is about ti bite if off.
Actually high speed rail is the wave of the present, and we have already been passed by. Too bad. Ignorance trumps logic.
The states with the biggest problems (illinois, CA, NJ, Michigan) have all, to one degree or another, been involved in accounting and financial flim-flam to put off the day of reckoning, and the day of reckoning is here, pushed forward by a brutal recession.
I;m not surprised that Professor Beale, a public employee of the State of Michigan, is in favor of tax increases, it is in her personal self-interest, beyond being a standard policy recommendation of the left.
The only real growth industry in Michigan is moving vans, as businesses and citizens move for a number of reasons, including lower taxes, weather, better tort environments, and freindlier regulatory climates.
So yes, taxes are not the only reason, maybe not the largest reason, but taxes do matter.
A couple of things about Walker. He is a not very bright one trick pony–hold or reduce taxes. He is going after the public employee unions big time because there is no other way to close a $3 billion budget gap without gutting popular government spending–mostly supporting local governments and the states education system. He left Milwaukee County finances a mess–he would never have been elected were it not for the corruption of the Democrats who preceeded him. His big pledge is to add 250,000 jobs. So far we have only lost jobs since his election.
This country’s middle class needs to seriously look at accountability of the government. On the right, the Wall Street business elites lobbys the congress for their own special interest tax cuts. On the left, the progressives, especially top union officials, intellectuals whom really have a disconnect with actual working world, help elect the congress whose on the take from both sides.
People in the state of Illinois and in the US needs to seriously think about what they need and what they want. You cannot have it both ways! Public Unions needs to self-police so their top members do not abuse their positions. The stock holders needs to demand pay for performance from their board members and CEO. None of which is really happening yet! Until this kind of leadership corruption stops none of the “reforms” of the republican party nor democrate party is going to be amount to anything.
Like Warren Buffet says- “tax me!” President Obama-federal salary freeze. Those are examples of accoutability that’s needs to be looked at for this country! The tax payer pays but no one seems to ask, where did the money go? The senior publically funded armchair intellectuals, senior top union officials, CEOs of major corporations, elected officials all needs to start justifying why they are getting paid; if they can justify their pay/their job, then tax payer will be more willing to get a tax increase to fund their projects, salary for the public good…
This country’s middle class needs to seriously look at accountability of the government. On the right, the Wall Street business elites lobbys the congress for their own special interest tax cuts. On the left, the progressives, especially top union officials, intellectuals whom really have a disconnect with actual working world, help elect the congress whose on the take from both sides.
People in the state of Illinois and in the US needs to seriously think about what they need and what they want. You cannot have it both ways! Public Unions needs to self-police so their top members do not abuse their positions. The stock holders needs to demand pay for performance from their board members and CEO. None of which is really happening yet! Until this kind of leadership corruption stops none of the “reforms” of the republican party nor democrate party is going to be amount to anything.
Like Warren Buffet says- “tax me!” President Obama-federal salary freeze. Those are examples of accoutability that’s needs to be looked at for this country! The tax payer pays but no one seems to ask, where did the money go? The senior publically funded armchair intellectuals, senior top union officials, CEOs of major corporations, elected officials all needs to start justifying why they are getting paid; if they can justify their pay/their job, then tax payer will be more willing to get a tax increase to fund their projects, salary for the public good…
This country’s middle class needs to seriously look at accountability of the government. On the right, the Wall Street business elites lobbys the congress for their own special interest tax cuts. On the left, the progressives, especially top union officials, intellectuals whom really have a disconnect with actual working world, help elect the congress whose on the take from both sides.
People in the state of Illinois and in the US needs to seriously think about what they need and what they want. You cannot have it both ways! Public Unions needs to self-police so their top members do not abuse their positions. The stock holders needs to demand pay for performance from their board members and CEO. None of which is really happening yet! Until this kind of leadership corruption stops none of the “reforms” of the republican party nor democrate party is going to be amount to anything.
Like Warren Buffet says- “tax me!” President Obama-federal salary freeze. Those are examples of accoutability that’s needs to be looked at for this country! The tax payer pays but no one seems to ask, where did the money go? The senior publically funded armchair intellectuals, senior top union officials, CEOs of major corporations, elected officials all needs to start justifying why they are getting paid; if they can justify their pay/their job, then tax payer will be more willing to get a tax increase to fund their projects, salary for the public good…
This country’s middle class needs to seriously look at accountability of the government. On the right, the Wall Street business elites lobbys the congress for their own special interest tax cuts. On the left, the progressives, especially top union officials, intellectuals whom really have a disconnect with actual working world, help elect the congress whose on the take from both sides.
People in the state of Illinois and in the US needs to seriously think about what they need and what they want. You cannot have it both ways! Public Unions needs to self-police so their top members do not abuse their positions. The stock holders needs to demand pay for performance from their board members and CEO. None of which is really happening yet! Until this kind of leadership corruption stops none of the “reforms” of the republican party nor democrate party is going to be amount to anything.
Like Warren Buffet says- “tax me!” President Obama-federal salary freeze. Those are examples of accoutability that’s needs to be looked at for this country! The tax payer pays but no one seems to ask, where did the money go? The senior publically funded armchair intellectuals, senior top union officials, CEOs of major corporations, elected officials all needs to start justifying why they are getting paid; if they can justify their pay/their job, then tax payer will be more willing to get a tax increase to fund their projects, salary for the public good…
i have been informed recently by my brother in law who works for a large architectul/engineering firm that the “high speed” rail system being discussed is a tad short of the rail i had envisioned being proposed (i.e., china’s that moves in excess of 100mph). evidently, our definition is (fasten your seatbelts!) 39mph.
relative to mr. buffett’s ‘tax me’ comment; i haven’t seen his 1040’s, but i understand he pays himself $100k. wonder if he receives a 1099 for corporate transportation, meals, etc.,?
Hi Rusty:
Lets talk about Tort Reform in Michigan and then I have to chat with MG. Michigan has the worst state SC in the US. Why is that true? Well it has over ruled years of precedent in favor of business.
Kreiner v. Fischer, 471 Mich 109 (2004)
Devillers v. Auto Club Insurance Assoc. (2005)
Cameron v. ACIA, 476 Mich 55( 2006)
Nawrocki v. Macomb County Road Commission, 463 Mich 143 (2000)
Radeljak v. Chrysler, 475 Mich 598 ( 2006)
Philips v. Mirac Inc., 470 Mich 415 (2004)
Hanson v. Mecosta County Road Commission, 465 Mich 492 (2002)
Griffith v. State Farm Insurance, 472 Mich 521 (2005)
Grimes v. Department of Transportation, 475 Mich 72 (2006)
Rory v. Continental, 473 Mich 457 (2005)
Lugo v. Ameritech, 464 Mich 512 (2001)
Reed v. Breton, 475 Mich 531 (2006)
Roberts v. Mecosta General Hospital, 466 Mich 57 (2002)
Burton v. Reed City Hospital Corp, 471 […]
continued:
MacDonald v. PKT, Inc., 464 Mich 322 (2001)
Garg v. Macomb County Mental Health, 472 Mich 263 (2005)
Neal v. Wilkes, 470 Mich 661 (2004)
Michalski v. Bar-Levav, 463 Mich 723 (2001)
Shinholster v. Annapolis Hospital, 471 Mich 540 (2004)
Haynie v. State, 468 Mich 302 (2003)
Greene v. AP Products Ltd., 475 Mich 502 (2006)
Elezovic v. Ford Motor Co., 472 Mich 408 (2005)
Gilbert v. DaimlerChrysler Corp., 470 Mich 749 (2004)
Magee v. DaimlerChrysler Corp., 472 Mich 108 (2005)
Sington v. Chrysler Corp., 467 Mich 144 (2002)
Scarsella v. Pollak, 461 Mich 547 (2000)
Rakestraw v. General Dynamics Land Sys, 469 Mich 220 (2003)
Jenkins v. Patel, 471 Mich 158 (2004)
Costa v. Emergency Medical Services, 475 Mich 403 (2006)
Mack v. City of Detroit, 467 Mich 186 (2002)
Henry v. Dow […]
Rusty:
The biggest issue in Michigan is mismanagement by the state’s largest industries; automotive, insurance, etc.
For those of you who are curious, the Michigan Court System has been anti-consumerism for a couple of decades now. There is no need for tort reform unless it enables citizems and reverses much of what the MSC has destroyed.
Face it folks, the American middle class has seen it’s hay day. Globalization is just a synonym for the reduction of the MC into the Lower Class. The govt. has been theposter boy for ineptness for decades. On top of that it has been in a partnership with big business all along, letting them send millions of jobs overseas without suffcient restrcitions. Funny how industry has changed and reduced employee costs (excluding senior management which as skyrocketed the last 20 years) while govt/ municipal employee costs have stayed the same or risen.
Without jobs (in the USA – not somewhere else) there is no recovery for this country. I psersonally do not see job growth happening in sufficient quantities and with the required quality of jobs, for the MC to come back.
Of course if you are over 50 and get laid off or outsourced, you are pretty much done. Good luck getting a real job. Better plan on that scenario in your retrirement excel sheets. New reality is that you retirement plan includes working at WalMart or CVS until the day you die?