Gov. J.B. Pritzker unveils graduated state income tax plan he says would give break to taxpayers earning less than $250K (Chicago: health insurance, home)

[MSchemist80]

Originally Posted by flamadiddle

Are there really that many people making $300K plus in Illinois?

Probably a lot less after they pass this tax increase. People who earn that much often aren't dependent on being in a particular area for a job like many in the middle class.

[My Kind Of Town]

Originally Posted by flamadiddle

playing with that calculator, it's hard to imagine how his proposed rates would help. I don't see a sizable tax increase until you go well over $300K of income. Are there really that many people making $300K plus in Illinois? Enough to make up for the masses that will allegedly get a small deduction and also right the ship?

They are saying only 3% of the state’s population will see an increase from the proposal so I presume approximately 3% of Illinois residents fall into the >$250-300k household income range. Goes to show that tax increases to the upper middle class thru ultra wealthy, a group that accounts for just 3% of the state’s population, more than offsets tax decreases (albeit modest) to the remaining 97%.

[GhostOfAndrewJackson]

Originally Posted by prairiestate

Oh good, someone else did it for me.
https://www.illinoispolicy.org/moody...for-any-state/

I may not be a finance expert like you, but this sounds bad.
"According to a new report by Moody’s Investors Service, Illinois’ unfunded pension liabilities equaled 601 percent of state revenues in 2017, a U.S. record"

What makes you think we have decades to wait for tier 1 employees to diminish?

Fear not, for a recession will come, and with the day of reckoning. His Corpulence pins his revenue hopes on high income earners, who usually get a large percentage of their income in the form of variable pay, pay that temporarily decreases in recessions and they will cope with it like they always do, by making temporary lifestyle adjustments. Meanwhile the common folks will feel the pain and dramatically cut back on discretionary spending, and with it go those high margin taxes the state and local governments rely on. Gambling revenue and recreational marijuana revenue will dry up, and communities will have to cut back on personnel and services. Further erosion in discretionary tax receipts will occur forcing court mandated tax increases to pay the IMRF required pension payments, which will further reduce conspicuous consumption as the pensioner’s checks further drain the system and further reduce the velocity of money. The system will feed on itself ushering in blissful collapse, the question really becomes who will occupy the White House and Congress when the collapse occurs. Should be exciting.

[My Kind Of Town]

Originally Posted by GhostOfAndrewJackson

Fear not, for a recession will come, and with the day of reckoning. His Corpulence pins his revenue hopes on high income earners, who usually get a large percentage of their income in the form of variable pay, pay that temporarily decreases in recessions and they will cope with it like they always do, by making temporary lifestyle adjustments. Meanwhile the common folks will feel the pain and dramatically cut back on discretionary spending, and with it go those high margin taxes the state and local governments rely on. Gambling revenue and recreational marijuana revenue will dry up, and communities will have to cut back on personnel and services. Further erosion in discretionary tax receipts will occur forcing court mandated tax increases to pay the IMRF required pension payments, which will further reduce conspicuous consumption as the pensioner’s checks further drain the system and further reduce the velocity of money. The system will feed on itself ushering in blissful collapse, the question really becomes who will occupy the White House and Congress when the collapse occurs. Should be exciting.

No doubt Illinois as well as other states (and local municipalities) throughout the country will be a world of hurt if another Great Recession strikes soon. Your post also reminds me of this nifty little clock:

U.S. National Debt Clock : Real Time

[smegmatite]

Originally Posted by MSchemist80

Probably a lot less after they pass this tax increase. People who earn that much often aren't dependent on being in a particular area for a job like many in the middle class.

what these ignorant politicians don't understand these days is that jobs are way more mobile than ever, the increase in people working from home or "telecommuting" is growing faster than ever
https://www.forbes.com/sites/karsten.../#acecc7c4ff7e

keeping up with family is way easier than ever with social media and cheap airfare, cheap gas, etc.

so what the hell do these morons think is going to happen when you could live anywhere and not pay taxes or live in Chicago with its horrible weather, high taxes and crime, horrible schools, horrible traffic, when these people you are raising taxes on are the ones with the means to move!!!

most people making 300k+ can probably do their jobs anywhere and as long as the city and state keep pushing these people away its just going to continue to get worse because nobody will be left to pay for their stupid social experiments!

[Grlzrl]

Originally Posted by smegmatite

what these ignorant politicians don't understand these days is that jobs are way more mobile than ever, the increase in people working from home or "telecommuting" is growing faster than ever
https://www.forbes.com/sites/karsten.../#acecc7c4ff7e

keeping up with family is way easier than ever with social media and cheap airfare, cheap gas, etc.

so what the hell do these morons think is going to happen when you could live anywhere and not pay taxes or live in Chicago with its horrible weather, high taxes and crime, horrible schools, horrible traffic, when these people you are raising taxes on are the ones with the means to move!!!

most people making 300k+ can probably do their jobs anywhere and as long as the city and state keep pushing these people away its just going to continue to get worse because nobody will be left to pay for their stupid social experiments!

It's interesting how he is raising taxes just after Cuomo came out with the huge shortfall in revenues in NY. They don't learn from their mistake, those Democrats.

[Grlzrl]

Wow, just wow.

https://www.chicagotribune.com/news/...311-story.html




How Pritzker’s tax proposal sets up a pricey cliff and penalizes marriage
Gov. J.B. Pritzker delivers his first budget address on Feb. 20 to a joint session of the Illinois House and Senate. (E. Jason Wambsgans/Chicago Tribune )
By David J. Roberts

Illinois has serious fiscal problems, and a constitutional amendment to allow for a progressive income tax rate structure might help. That is a complex policy question worthy of serious analysis and robust debate. But even those of us who support the concept of a progressive rate structure should recognize that the current proposal, as released March 7 by Gov. J.B. Pritzker, is severely flawed and would have serious negative consequences.
Our current individual flat rate structure imposes a 4.95 percent stated rate on net income. The proposed graduated rate structure would instead impose these rates:
4.75 percent on first $10,000 of net income
4.90 percent on income between $10,001 and $100,000
4.95 percent on income between $100,001 and $250,000
7.75 percent on income between $250,001 and $500,000
7.85 percent on income between $500,001 and $1 million
7.95 percent on income above $1 million
In other words, extra dollars of income do not cause the income from a lower bracket to move into a higher bracket. That’s how a progressive rate structure is supposed to work. And that’s how this rate structure would work, until you get to the top bracket.
Beware: Dangerous cliff
When it says that the top rate would be 7.95 percent on net income over $1 million, you would expect that rate to apply to just the extra dollars of income above the $1 million mark. But that’s not how this proposal would work.
For example, if net income goes above the $1 million threshold by just one dollar, that dollar plus the entire $1 million of income that would have been in the lower brackets, all gets pushed into the top bracket, where all of it would be taxed at 7.95 percent.
Think of this as a progressive rate structure with a cliff. At the million-dollar threshold, one extra dollar of income puts you over the cliff. Ignoring the effects of any other tax provisions, that one dollar of income would cost $8,565 in additional tax, an incredible marginal rate of 856,500 percent on that dollar. Imagine the efforts that taxpayers would go through to avoid being taxed on extra income if they were close to that threshold. And a tax like this might cause some wealthy individuals to flee Illinois altogether....

[My Kind Of Town]

Originally Posted by Grlzrl

Wow, just wow.

https://www.chicagotribune.com/news/...311-story.html




How Pritzker’s tax proposal sets up a pricey cliff and penalizes marriage
Gov. J.B. Pritzker delivers his first budget address on Feb. 20 to a joint session of the Illinois House and Senate. (E. Jason Wambsgans/Chicago Tribune )
By David J. Roberts

Illinois has serious fiscal problems, and a constitutional amendment to allow for a progressive income tax rate structure might help. That is a complex policy question worthy of serious analysis and robust debate. But even those of us who support the concept of a progressive rate structure should recognize that the current proposal, as released March 7 by Gov. J.B. Pritzker, is severely flawed and would have serious negative consequences.
Our current individual flat rate structure imposes a 4.95 percent stated rate on net income. The proposed graduated rate structure would instead impose these rates:
4.75 percent on first $10,000 of net income
4.90 percent on income between $10,001 and $100,000
4.95 percent on income between $100,001 and $250,000
7.75 percent on income between $250,001 and $500,000
7.85 percent on income between $500,001 and $1 million
7.95 percent on income above $1 million
In other words, extra dollars of income do not cause the income from a lower bracket to move into a higher bracket. That’s how a progressive rate structure is supposed to work. And that’s how this rate structure would work, until you get to the top bracket.
Beware: Dangerous cliff
When it says that the top rate would be 7.95 percent on net income over $1 million, you would expect that rate to apply to just the extra dollars of income above the $1 million mark. But that’s not how this proposal would work.
For example, if net income goes above the $1 million threshold by just one dollar, that dollar plus the entire $1 million of income that would have been in the lower brackets, all gets pushed into the top bracket, where all of it would be taxed at 7.95 percent.
Think of this as a progressive rate structure with a cliff. At the million-dollar threshold, one extra dollar of income puts you over the cliff. Ignoring the effects of any other tax provisions, that one dollar of income would cost $8,565 in additional tax, an incredible marginal rate of 856,500 percent on that dollar. Imagine the efforts that taxpayers would go through to avoid being taxed on extra income if they were close to that threshold. And a tax like this might cause some wealthy individuals to flee Illinois altogether....

I wish I had to worry about whether or not I was at risk of exceeding the million dollar threshold in annual income. What a good problem that must be.

[Grlzrl]

Originally Posted by My Kind Of Town

I wish I had to worry about whether or not I was at risk of exceeding the million dollar threshold in annual income. What a good problem that must be.

Miss the point, as usual.

[My Kind Of Town]

Originally Posted by Grlzrl

Miss the point, as usual.

I didn’t miss anything. What’s your concern? All the multi millionaires are going to pick up and leave the state because their state income tax increased 3 basis points? Where are they going to go and find those $1M+ salaries? New York, California, Boston? Think it’s cheaper there?