Friday, March 30, 2012

Why Are Legislators Still Focusing on the Wrong Issues?

As a young man, I was taught to “pay my debts” and to “keep promises” that I made to others. I was taught to “face the consequences” of my actions.  I was taught to “work hard” and “never give up.”  Both of my parents never finished high school because they needed to find jobs to support themselves.  They were uneducated, but they knew a lot about instilling responsibility, integrity, courage, discipline, and perseverance.  I wish these values were evident in our Illinois policymakers today: to work hard to find the ethical solution for funding the public pension systems, to become morally intrepid without abdication, and to raise the needed revenue to pay the state’s debts instead of reneging on a constitutionally-guaranteed contract made to public employees who have certainly kept their promise to pay their "fair share." These are the issues regardless of what some legislators, the Civic Committee, the Civic Federation, the Chicago Tribune, and others propagate:


·         “Illinois does not raise enough General Funds revenue to fund critical public services.  Its rate of growth is lower than that what is needed to simply maintain existing levels of services after accounting for inflation and population growth” (The Center for Tax and Budget Accountability).

·         “Given an appropriately designed graduated-rate structure, Illinois could cut the overall state income tax burden for 94 percent of all taxpayers—on average providing a tax cut to every taxpayer with less than $150,000 in base income annually, raise at least $2.4 billion more in revenue, and keep the effective individual income tax rate for millionaires well below five percent…  Illinois taxpayers with the bottom 94 percent of base income collectively would receive an annual tax cut of $1.06 billion… [T]he combined effect of this policy would be a stimulus to the economy from tax cuts and additional state spending (assuming that the additional revenue is used to fund current public services that would otherwise not be funded) that would create at least 36,000 private sector jobs in communities across Illinois…” (The Center for Tax and Budget Accountability).

·         Tax services. Illinois is one of five states with sales taxes on fewer than 20 services (The Center on Budget and Policy Priorities);

·         “Broaden the sales tax base to include selected consumer services for an estimated new revenue of $550 million a year” (IEA);

·         Increase taxation on the wealthy: Illinois is in the top 10 of regressive state tax systems where the wealthiest taxpayers do not pay as much of their incomes in taxes as the poorest and middle-income wage earners (The Institute on Taxation and Economic Policy);

·         Close tax loopholes for corporations, especially oil companies and their offshore drilling “for an estimated new revenue of $75 million a year” (IEA);

·         Eliminate the tax loophole for “Tax Increment Financing Districts” and save “$1.2 billion a year” (Greg Leroy, GoodJobsFirst.org);

·         Eliminate “Edge Tax Credits” for large corporations and save “$347 million a year” (Leroy);

·         Eliminate “Accelerated Depreciation” or “write offs” of all assets and save “$333 million a year” (Leroy);

·         Eliminate “Single Sales Factor” that “allows large corporations to cut their taxes 80-90% and save "$96-217 million a year" (Leroy);

·         Eliminate “Vendor Discounts” that allow companies “to keep an uncapped part of their state taxes as a ‘processing’ fee” and save “$126 million a year” (Leroy);

·         Raise the cigarette tax “for an estimated new revenue of $300 million a year” (IEA);

·         Reinstitute “fund sweeps”: surplus revenue should be added to the General Revenue Fund “for an estimated new revenue of $300 million a year” (IEA);

·         Add “exceeded revenue” from the Road Fund (motor vehicle and driver’s license fees) to the General Revenue Fund “for an estimated new revenue of $250 million a year” (IEA);

·         Reduce aggregate transfers/eliminate “some statutory transfers” from the General Revenue Fund “for an estimated new revenue of $200 million a year” (IEA);

·         Eliminate or cap the “retailers’ discount” that businesses keep: 1.75% of sales taxes paid for by the rest of us “for an estimated new revenue of $100 million a year” (IEA);

·         Increase taxation on gambling and alcohol;

·         Implement a more timely system of payments (cash management practices are greatly affected by budgetary practices in relation to deferred liabilities which place additional pressures particularly in the first and second quarters of the year to pay those expenses; timing of tax payments also affects the state's cash flow and should be adjusted accordingly);

·         Examine and improve the efficiency of the state’s government;

·         Focus on increasing the state’s revenue to pay the state’s debts without scapegoating public employees!

--glen brown

Read “Understanding Illinois’ Budget Deficit and Solutions” http://teacherpoetmusicianglenbrown.blogspot.com/2012/03/solutions-for-illinois-budget-deficit.html


1 comment:

  1. Establish a financial transaction tax or "Robin Hood Tax" for an estimated earnings of $350 billion a year in the United States: a 50 cent tax on every $100 of transacting.

    "We used to have a financial transaction tax in this country from 1914 to 1966" (Bill Moyers).

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