Tuesday, March 20, 2012

“We have to do something [about the public pension systems in Illinois]”

Will Illinois policymakers consider a graduated income tax that has been recommended by the Center for Tax and Budget Accountability, the Center on Budget and Policy Priorities, the Center for Economic Policy and Research, the Institute on Taxation and Economic Policy, the National Conference of State Legislatures, the Chicago Metropolitan Agency for Planning, and United for a Fair Economy, et al. for solving a state’s financial difficulties? The answer is an emphatic “No.”

Will our policymakers consider the establishment of a broader tax base so rates are “lower in order to minimize the impact…” and because a broader tax base offers “diversification since it spreads the burden of taxation among more payers than a narrow basis does” (National Conference of State Legislatures)?  The answer is an emphatic “No.”

Will our policymakers consider the taxation of services to increase needed revenue since “the tax system in the State of Illinois does not reflect today’s economic realities” (Chicago Metropolitan Agency for Planning) and because the State of Illinois taxes less than one-third of the 168 potentially-taxable services (Center on Budget and Policy Priorities)?  The answer is an emphatic “No.” 

Will our policymakers consider the elimination of welfare for the rich since “the State of Illinois is among 10 states in the nation with the highest taxes paid by its poorest citizens at 13 percent” (the Institute on Taxation and Economic Policy), and one of the few states where the top five percent of income earners pay the least amount of sales, excise, property and income taxes because of federal deduction offsets or regressive tax loopholes from itemized deductions, such as capital gains tax breaks and deductions for federal income taxes paid that are coupled with a flat-rate structure (the Institute on Taxation and Economic Policy)? The answer is an emphatic “No.” Then will they at least consider the elimination of some tax breaks and tax loopholes for all corporations? The answer is still an emphatic “No.”  

Will our policymakers consider a reduced calculation of the anticipated average of the TRS investment returns, the shifting and “phasing in” of the state's “normal payment costs” to the TRS pension to local school districts, the reduction of the current and retired teachers' “compounded” COLA, the formation of a “capped salary” with an attached “hybrid plan for current teachers,” an “increase in the current teachers' contributions” to the Tier 1 defined-benefit pension plan, but a decrease in contributions and a refund for teachers that were hired after January 1, 2011 (because they have been overpaying into their Tier 2 defined-benefit pension plan)? Moreover, will our policymakers also consider a separate, irrevocable savings option – a non-guaranteed defined-contribution plan, such as a 401 (k) – for all current teachers?

Two more questions: will some of the above proposals in the previous paragraph violate Article I, Section 10 of the Constitution of the United States; Article XIII, Section 5 and Article I, Section 16 of the Constitution of the State of Illinois? Will some of the effects of these proposals create an unreasonable hardship and inequity for Illinois teachers and their families, for other property taxpayers, and for public school districts and their students?  The answer is...

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