Illinois house approves 2% income tax hike from 3% to 5% (the amount you paid last year will increase by about 67% assuming everything else is the same)

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Permalink Reply by Jack on January 13, 2011 at 11:15am

The best resource I know is to pick up a blank piece of paper and read.  IL gov't doesn't try to curb spending, rather reduce the amount of increased spending every year.

Rowbike Mike said:

 

When I lived in the District of Columbia, the "district" income tax was 9% so I too was shocked (and relieved) that the Illinois rate was 3% when I arrived.  I'm with others who would be comfortable paying a higher income tax rate if I felt confident that it resulted in greater government services and a belief that this money would be spent on things that actually yield net benefits to the populace at large.  However, the history of corruption and the influence of special interests (both private and public) is undeniable. Also, while it's true that there some government services that can't and shouldn't be curtailed, irrespective of the economic climate, there are many others that should be.

 

When a company's revenues drop off, that company has to make hard decisions in order to survive. With government, especially Illinois' state government, those hard decisions aren't being made. 

 

Does anyone know of a good resource that lists the steps the state government has taken to reduce government spending in the last 2-3 years?

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Permalink Reply by J.P. on January 13, 2011 at 11:27am

Well there is one point I haven't seen brought up yet.

Part of the budget crisis (both federal and state) is of course lower tax receipts. In my situation, where my wife was laid off and now works only part time, that resulted in the fact that I paid less taxes. I actually changed my tax withholding with my employer. This increase now enacted will help the state with the fact that only because families have less income/pay less tax doesn't mean we need Public Services less (schools, transit etc).

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Permalink Reply by Doug Haynes on January 13, 2011 at 3:34pm

But rather than tax those who are having lean financial times a higher percentage of their pay why not create a business environment that brings more job creators here and motivates those already here to stay. 

The higher income tax is bad but the higher business tax is even worse.

It costs to much to do business in IL, especially Chicago.  Why do you think Ryerson closed their big plant on the Southside?  Because they could preform that work elsewhere for less and the higher we raise taxes the worse it is going to get.

 

J.P. said:

Well there is one point I haven't seen brought up yet.

Part of the budget crisis (both federal and state) is of course lower tax receipts. In my situation, where my wife was laid off and now works only part time, that resulted in the fact that I paid less taxes. I actually changed my tax withholding with my employer. This increase now enacted will help the state with the fact that only because families have less income/pay less tax doesn't mean we need Public Services less (schools, transit etc).

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Permalink Reply by Dan Korn on January 13, 2011 at 11:59pm

I call baloney on the title of the article, and of this thread.  It's not a 66 percent increase, it's a two percent increase, from a rate of three percent to a rate of five percent.  Five percent minus three percent is two percent, not 66 percent.

 

If it was going from a rate of 1 percent to a rate of 3 percent, would you call that an increase of 200 percent?  It's still the same total increase in anyone's tax bill, two percent of your income.  (Although it's not actually two percent of anyone's income because of deductions.  And it's almost nothing for corporations; more on that in a bit.)

 

If we are going to figure it as the overall increase in anyone's taxes, then it's really like a one-tenth of one percent increase in anyone's total taxes.  The Illinois sales tax is still pretty low, even at 5 percent.

 

So I'm happy to pay a few bucks more to keep vital services going.

 

As for the catastrophic business taxes that are going to drive all of our jobs away: Yeah, not so much, as the Tribune reported today:

"The corporate tax rate also will jump, from 4.8 percent to 7 percent, though the impact may be less sweeping because of breaks that annually help more than two-thirds of corporations in Illinois avoid payment of that tax."

http://www.chicagotribune.com/news/local/ct-met-tax-hike-what-it-me...

 

I actually think the corporate tax rate should be higher.  These fat cats are bleeding more money out of our state then they're putting into it.

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Permalink Reply by Far'arned Retrogrumpalunkus #63 on January 14, 2011 at 6:29am

YES!

 

Are you a product of CPS?

 

Please go back to school and take some math.

 

I think I now understand why people got into bad morgages and were so easily taken advantage of by the "predatory lenders."  They are just too stupid to understand math and computations behind simple rates and percentages.  Why don't you just go play the lottery?

Dan Korn said:

I call baloney on the title of the article, and of this thread.  It's not a 66 percent increase, it's a two percent increase, from a rate of three percent to a rate of five percent.  Five percent minus three percent is two percent, not 66 percent.

 

If it was going from a rate of 1 percent to a rate of 3 percent, would you call that an increase of 200 percent? 

 

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Permalink Reply by Dan Korn on January 14, 2011 at 8:45am

James Baum said:

YES!

 

Are you a product of CPS?

 

Please go back to school and take some math.

 

I think I now understand why people got into bad morgages and were so easily taken advantage of by the "predatory lenders."  They are just too stupid to understand math and computations behind simple rates and percentages.  Why don't you just go play the lottery?

 

Thanks James, that's really helpful. What were you saying earlier about the "you are all ignorant & stupid" argument?

I understand why it's being called a 66 percent increase, but I think that's misleading, and that it plays on a common misunderstanding of how taxes work.  It's about lies, damned lies, and statistics.

 

Let's try this another way: Imagine Illinois had no income tax at all.  Then a 2 percent tax was levied.  So a person making $100,000 a year would pay $2000 more in this scenario (not counting deductions).  How's my math so far?  Now, if you were figuring out the increase in the same way you figure it for the current situation, where 5 percent is 66 percent more than 3 percent, well, then 2 percent is infinitely more than zero, so by your math, you would have to call it an increase of infinity!  But even though any one person is actually only paying two percent more of his or her salary (again, ignoring deductions), your newspaper headline would scream, "Infinite income tax hike!"

 

Now let's say the tax rate was 10 percent, and it was raised to 12 percent.  So the way you're figuring it, that's only a 20 percent increase.  Yet the person making $100,000 a year would still pay $2000 more.  Likewise, if it went from 20 percent to 22 percent, you'd call that a 10 percent increase, but our $100,000 earner would still be paying the same extra $2000.  We can do this for other rates: 50 percent to 52 percent would be a 4 percent increase by your logic, but it's still the same extra $2000 to pay, and so on.  (Are you keeping up, or is my public school education leaving you behind?)

 

So, in all of these scenarios, a given person's taxes are going up by exactly the same amount in dollars.  If your taxes go from 0 to 2 percent, or from 3 to 5 percent, or from 10 to 12 percent, or from 98 to 100 percent, you're still just paying 2 percent more.  But you're assigning these increases wildly different numbers, ranging from a couple percent all the way to infinity!  That's misleading, and masks the true cost to the taxpayer.  A 66 percent increase sounds scarier than a 2 percent increase, but that's just spin, and it's got a political purpose to scare people.

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Permalink Reply by Far'arned Retrogrumpalunkus #63 on January 14, 2011 at 9:03am

No, I am not saying everyone is ignorant and stupid -I am saying that your statement is catagorically wrong and that by sticking to it makes you look ignorant and stupid.

 

The tax has gone up 66%.   The rate has gone up 2 points but the tax has gone up by 66% from where it was before.

 

Your "point" is just a talking point of the spin-doctors who are trying to make this massive tax increase sound less onerous than it really is.  Saying that the taxes only went up 2% is mathematically disingenuous -or ignorant.  Take your pick.

 

Dan Korn said:

Thanks James, that's really helpful. What were you saying earlier about the "you are all ignorant & stupid" argument?

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Permalink Reply by Tank-Ridin' Ryan on January 14, 2011 at 9:48am

We're seriously having this debate?  Really?

 

I'm going to give everyone on this forum the benefit of the doubt that they can do elementary school math and can figure out that an increase from 3% to 5% is a difference of 2%, but the rate increased by 66%.

 

This thread's title really does need to be changed though.  It's a 2% hike.

 

James Baum said:

No, I am not saying everyone is ignorant and stupid -I am saying that your statement is catagorically wrong and that by sticking to it makes you look ignorant and stupid.

 

The tax has gone up 66%.   The rate has gone up 2 points but the tax has gone up by 66% from where it was before.

 

Your "point" is just a talking point of the spin-doctors who are trying to make this massive tax increase sound less onerous than it really is.  Saying that the taxes only went up 2% is mathematically disingenuous -or ignorant.  Take your pick.

 

Dan Korn said:

Thanks James, that's really helpful. What were you saying earlier about the "you are all ignorant & stupid" argument?

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Permalink Reply by Duppie on January 14, 2011 at 10:35am

Not to pick nits, but it is not true that the rate increase was 66%. If you are rounding, you would typically round to the nearest number, which would be 67% ;)

Tank-Ridin' Ryan said:

We're seriously having this debate?  Really?

 

I'm going to give everyone on this forum the benefit of the doubt that they can do elementary school math and can figure out that an increase from 3% to 5% is a difference of 2%, but the rate increased by 66%.

 

This thread's title really does need to be changed though.  It's a 2% hike.

 

James Baum said:

No, I am not saying everyone is ignorant and stupid -I am saying that your statement is catagorically wrong and that by sticking to it makes you look ignorant and stupid.

 

The tax has gone up 66%.   The rate has gone up 2 points but the tax has gone up by 66% from where it was before.

 

Your "point" is just a talking point of the spin-doctors who are trying to make this massive tax increase sound less onerous than it really is.  Saying that the taxes only went up 2% is mathematically disingenuous -or ignorant.  Take your pick.

 

Dan Korn said:

Thanks James, that's really helpful. What were you saying earlier about the "you are all ignorant & stupid" argument?

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Permalink Reply by Far'arned Retrogrumpalunkus #63 on January 14, 2011 at 11:13am

 

If your income tax load used to be $100 monthly then your new income tax load will be $166.67 for that same period.

 

Calling this a 2% increase is disengious, underhanded, and in my mind can not be intrepreted in any other way than as an attempt to confuse an already math-impaired public into believing that this is not as big of a deal as it is.

As far as knocking CPS -they are doing a pretty good job of that themselves.  At no time in history has so much money been spent on such an inferior service.    In inflation-corrected dollars the money being spent per student is at an all-time high and the trend has been going up since public schools have been founded. 

 

And look at the product.

 

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Permalink Reply by Davo on January 14, 2011 at 11:21am

Maybe it could be called: Il, house approves a 2% tax hike at a 66% rate increase.

But I doubt that would cool anyones jets about the topic.

I appreciate you clarifying the subject though T-R Ryan.

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Permalink Reply by S on January 14, 2011 at 12:30pm

James Baum said:

 

Calling this a 2% increase is disengious, underhanded, and in my mind can not be intrepreted in any other way than as an attempt to confuse an already math-impaired public into believing that this is not as big of a deal as it is.

Calling the increase as being a 66% or 67% increase is just as disingenuous since it also misleads the reader a bit.  I'd think the safest way to present this is to say the tax rate is going up to 5% from 3%.   

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