OT: Illinois fair tax: yes or no?

[dougthonus]

However it gets done, it will require big compromise. Throw away any plans like Illinois Public Policy that will have you believe this is fixable in something like 5-10 years. We built up the liability for far too long. Part of what needs to happen is a true short term tax increase that pays off the borrowed spending from the prior generations.

The irony, and likely common with most political situations, is probably doing both at once, raising taxes and reducing spending problems and both sides compromising on this at the same time because the other side is taking a hit. Of course, the outcome is neither side is for this, because it hurts them both with their base.

That's why these situations just get worse and worse, the only way the two parties can compromise is if they both win, but the solution requires both to lose, at least temporarily.

[ATRAIN53]

So this was an L

Read on Twitter

I thought it was going to pass. I am more happy than sad that it failed though had mixed feelings about it overall. Hopefully we actually address the real problem now, but we probably won't. We'll probably just spin into further financial problems.

probably.....

a bummer because I'm sure it took a ton of work just to get that on the ballot.

I didn't understand all the langue around it, I'm not that smart.

But it was something on an actual ballot to lower my taxes and I feel like we pay way to much tax already.
I thought it would pass.

[Dominator83]

I still don’t understand the NO vote because what is stopping springfield from raising our taxes right now even with a NO decision? Are we “really” locked in to 4.95%? Guess we’ll find out quickly.

We may still raise taxes, but the amount we can raise them is pretty limited because the democrats will get murdered by their base if they raise taxes on anyone except the wealthy.

I ain’t trying to be doomsday or say people are wrong for voting no, I respect citizens votes. I just don’t know where we go from here? What gets cut? Is part of the cuts in schools as JB Pritzker is on record saying or was he bluffing? It’s either higher taxes for everybody, a massive cut in state and local services or a combination of both.

We need to cut pensions. There is no other choice in the long run that will be good for the state of Illinois. That is the answer here, and the only meaningful answer IMO. Raising taxes will continue to make the environment worse and worse for people. We're one of the few states that have people fleeing it (the most of any state in the nation over the past decade), and if we just had average population growth instead of people leaving, we'd already have made as much money in increased tax revenue as this tax bill was supposed to generate.

Making the environment worse for people in the state, not attracting earners or businesses isn't a solution either. It might help stop the bleeding for a few years, but ultimately being one of the worst tax states in the US (already true) and making it even worse isn't likely to be a long term winner, especially when we're already #1 in the last decade in population losses.

My thoughts exactly Doug. Unlike places like California, we don't have the weather or appeal for rich people to put up with all the B.S.

We've seen it with New York, where lots of their rich population left for Florida

[stl705]

I’m sorry I just don’t buy the whole “rich people will leave argument”.... at all. If 2% in taxes are causing them to leave, they wouldn’t be here right now and would have already left for whatever reason.

Chicago offers a wealth of business opportunities. If you wana retire and sit on your gold in FL, be my guest, but we’ve got a top tier education system for families, excellent infrastructure, not to mention we are one of the top states for fine arts, culture, and food.

If weather and taxes are rich people’s first priority, why are they still here as of today? The 2.5% is the difference maker?? Sorry I don’t buy it.

[dougthonus]

If weather and taxes are rich people’s first priority, why are they still here as of today? The 2.5% is the difference maker?? Sorry I don’t buy it.

We are literally the worst state in the US in terms of population growth, one of only two states in the US with negative population growth in the past decade. So I'm not sure what you don't believe about it. Yes, not everyone is going to leave, but it isn't a good environment, and that is having a very real, well documented, adverse impact on population.

That's why we're the worst state in the nation in terms of population growth. Literally, the worst state. More people want to get out of Illinois than every other state in the country. We are the worst over the past decade in that area. We aren't convincing workers or wealthy people to move to our state either. That's also a problem. The pandemic is going to make this even worse, because the long term draw of Chicago will be less as more and more places become remote work force centric.

[Michael Jackson]

I’m sorry I just don’t buy the whole “rich people will leave argument”.... at all. If 2% in taxes are causing them to leave, they wouldn’t be here right now and would have already left for whatever reason.

Chicago offers a wealth of business opportunities. If you wana retire and sit on your gold in FL, be my guest, but we’ve got a top tier education system for families, excellent infrastructure, not to mention we are one of the top states for fine arts, culture, and food.

If weather and taxes are rich people’s first priority, why are they still here as of today? The 2.5% is the difference maker?? Sorry I don’t buy it.

The education for the rich is a huge non factor as they would go to private schools anyway, the reasons you list are the reasons why we the average people would stay here not the wealthy. The ability to make money is the reason they stay here, and it still out paces taxes, which is why they are still here. What is the threshold on that line, I don’t know, as I am no where wealthy enough to even contemplate those things lol.

[stl705]

If weather and taxes are rich people’s first priority, why are they still here as of today? The 2.5% is the difference maker?? Sorry I don’t buy it.

We are literally the worst state in the US in terms of population growth, one of only two states in the US with negative population growth in the past decade. So I'm not sure what you don't believe about it. Yes, not everyone is going to leave, but it isn't a good environment, and that is having a very real, well documented, adverse impact on population.

That's why we're the worst state in the nation in terms of population growth. Literally, the worst state. More people want to get out of Illinois than every other state in the country. We are the worst over the past decade in that area.

That’s a good point Doug. Part of that is my argument, that those who would be leaving have ALREADY left.. but to your point would the decline move faster? Could be. This is about millionaires and billionaires moving. Would be interesting to see what kind of split between low/middle income moving to KY/TN/WI vs high income moving to west coast vs young 18-21 year olds moving.

Btw, pleasure arguing with ya’ll lol. We all on the same team here, and I do love my local community/state. I just don’t know what’s next and don’t want the middle and low class to continue to be strangled in the state.

[stl705]

I’m sorry I just don’t buy the whole “rich people will leave argument”.... at all. If 2% in taxes are causing them to leave, they wouldn’t be here right now and would have already left for whatever reason.

Chicago offers a wealth of business opportunities. If you wana retire and sit on your gold in FL, be my guest, but we’ve got a top tier education system for families, excellent infrastructure, not to mention we are one of the top states for fine arts, culture, and food.

If weather and taxes are rich people’s first priority, why are they still here as of today? The 2.5% is the difference maker?? Sorry I don’t buy it.

The education for the rich is a huge non factor as they would go to private schools anyway, the reasons you list are the reasons why we the average people would stay here not the wealthy. The ability to make money is the reason they stay here, and it still out paces taxes, which is why they are still here. What is the threshold on that line, I don’t know, as I am no where wealthy enough to even contemplate those things lol.

Good point MJ,I imagine that line is higher than going from 5 to 7%; but like you, I ain’t in that bracket lol.

[dougthonus]

That’s a good point Doug. Part of that is my argument, that those who would be leaving have ALREADY left.. but to your point would the decline move faster? Could be. This is about millionaires and billionaires moving. Would be interesting to see what kind of split between low/middle income moving to KY/TN/WI vs high income moving to west coast vs young 18-21 year olds moving.

Btw, pleasure arguing with ya’ll lol. We all on the same team here, and I do love my local community/state. I just don’t know want the middle and low class to CONTINUE to be strangled.

We have had people leaving the state for six straight years, the second longest streak in the country. So why do you think we will not continually bleed more people and everyone considering leaving has left. Note the average state grows every year because on aggregate the population of the nation is increasing, so it's not like the default is zero either. We're about -1% compared to the national average. That means we have 10% less tax revenue due to less population and as we bleed people, it means we need more and more revenue from the remaining people and this snowballs.

From a personal perspective, my wife and I have been debating about moving out of Illinois ever since my job went full time remote In August. We won't reasonably pull the trigger until my youngest is out of HS (she's a sophomore now).

[stl705]

I don’t disagree with that, I just dont think that rate of exodus expands significantly by moving tax rate from 5 to 7% tax rate for millionaires. I could be wrong of course.

Just curious, but what states are you looking at moving to?

[dougthonus]

I don’t disagree with that, I just dont think that rate of exodus expands significantly by moving tax rate from 5 to 7% tax rate for millionaires. I could be wrong of course.

I can tell you if my property taxes were cut in half and my state tax rate was at 3% instead of 5% that I probably wouldn't consider moving. Money and weather are the two reasons we would consider leaving.

Just curious, but what states are you looking at moving to?

Lots of places, but haven't really done my full research on all of them.

Florida, California, Arizona, North Carolina, Oregon, and Texas (as you can tell we are mostly looking at much warmer places).

[stl705]

I don’t disagree with that, I just dont think that rate of exodus expands significantly by moving tax rate from 5 to 7% tax rate for millionaires. I could be wrong of course.

I can tell you if my property taxes were cut in half and my state tax rate was at 3% instead of 5% that I probably wouldn't consider moving. Money and weather are the two reasons we would consider leaving.

Just curious, but what states are you looking at moving to?

Lots of places, but haven't really done my full research on all of them.

Florida, California, Arizona, North Carolina, Oregon, and Texas (as you can tell we are mostly looking at much warmer places).

Gotcha, appreciate the convo and good luck if ya’ll do decide to move. Certainly some nice areas you listed although I haven’t been to them all.

[Michael Jackson]

I don’t disagree with that, I just dont think that rate of exodus expands significantly by moving tax rate from 5 to 7% tax rate for millionaires. I could be wrong of course.

I can tell you if my property taxes were cut in half and my state tax rate was at 3% instead of 5% that I probably wouldn't consider moving. Money and weather are the two reasons we would consider leaving.

Just curious, but what states are you looking at moving to?

Lots of places, but haven't really done my full research on all of them.

Florida, California, Arizona, North Carolina, Oregon, and Texas (as you can tell we are mostly looking at much warmer places).

I had to pass on a dream job last year because of a family issue (it may come available again in the future or another opportunity will arise) but it was going to be a move out west. I really want out of this state, but my main motivation is weather, I just loathe the winters here any longer. It’s hard on the body for me, old injuries scream at me all winter, kids go cuckoo (as do I) not being outside enough in the winter. The weather absolutely effects my mood and my productivity too.

[Friend_Of_Haley]

However it gets done, it will require big compromise. Throw away any plans like Illinois Public Policy that will have you believe this is fixable in something like 5-10 years. We built up the liability for far too long. Part of what needs to happen is a true short term tax increase that pays off the borrowed spending from the prior generations.

The irony, and likely common with most political situations, is probably doing both at once, raising taxes and reducing spending problems and both sides compromising on this at the same time because the other side is taking a hit. Of course, the outcome is neither side is for this, because it hurts them both with their base.

That's why these situations just get worse and worse, the only way the two parties can compromise is if they both win, but the solution requires both to lose, at least temporarily.

The spending again has to be parsed. Its the spending towards the underfunded pensions that's a real drag. If we want to attract in-migration or keep out-migration down, we probably need to increase spending in other areas. Hell, I'm not sure if anyone has just considered outright paying workers to move to Illinois, maybe that needs to be explored.

I think its something like 25% of the budget that goes towards pensions right now? Let's say they pass a tax increase that could raise revenues by 5-10% and pass pension reforms that lower the unfunded liabilities by 5-10% percent. You split the extra revenue/savings; 1/3 towards paying down the pension liability, 1/3 towards expanding services which haven't actually grown in real terms, and 1/3 towards towards direct relocation packages aimed at businesses and workers to move to IL. If you can successfully grow the tax base with those incentive packages, you eventually fund your services with the increased tax base and then free up that money to pay down even more of the pension liability, until you can reach a point where you can then ramp those tax increases back down, which also hopefully makes us more attractive, and you can also ramp down the relocation incentive spending as well. Maybe within in 20 years you're back to that middle-high range for taxes with strong services (without promising unrealistic future promises that you don't fund).

Part of that is probably also tax reform which looks at property taxes and redistributes it a bit more throughout the state. If we're going to be a competitive in-migration state, the high housing/tax prices of many of our best public schools in places like Hinsdale, Winnetka, etc. are inaccessible to most of the country - spread the wealth around and make our middle to lower income neighborhood super accessible to in-migration. Plus if a portion of the property tax base was state instead of local, our communities aren't bargaining each other down just to keep businesses that are already in the state.

Basically its a problem that has to be attacked on many fronts. A progressive tax structure logically should be a part of that, but I think they did a horrible job from it, and wasted at least a year not doing much else and banking on only that. Big failing.

[dougthonus]

The spending again has to be parsed. Its the spending towards the underfunded pensions that's a real drag. If we want to attract in-migration or keep out-migration down, we probably need to increase spending in other areas. Hell, I'm not sure if anyone has just considered outright paying workers to move to Illinois, maybe that needs to be explored.

I think its something like 25% of the budget that goes towards pensions right now? Let's say they pass a tax increase that could raise revenues by 5-10% and pass pension reforms that lower the unfunded liabilities by 5-10% percent. You split the extra revenue/savings; 1/3 towards paying down the pension liability, 1/3 towards expanding services which haven't actually grown in real terms, and 1/3 towards towards direct relocation packages aimed at businesses and workers to move to IL. If you can successfully grow the tax base with those incentive packages, you eventually fund your services with the increased tax base and then free up that money to pay down even more of the pension liability, until you can reach a point where you can then ramp those tax increases back down, which also hopefully makes us more attractive, and you can also ramp down the relocation incentive spending as well. Maybe within in 20 years you're back to that middle-high range for taxes with strong services (without promising unrealistic future promises that you don't fund).

Part of that is probably also tax reform which looks at property taxes and redistributes it a bit more throughout the state. If we're going to be a competitive in-migration state, the high housing/tax prices of many of our best public schools in places like Hinsdale, Winnetka, etc. are inaccessible to most of the country - spread the wealth around and make our middle to lower income neighborhood super accessible to in-migration. Plus if a portion of the property tax base was state instead of local, our communities aren't bargaining each other down just to keep businesses that are already in the state.

Basically its a problem that has to be attacked on many fronts. A progressive tax structure logically should be a part of that, but I think they did a horrible job from it, and wasted at least a year not doing much else and banking on only that. Big failing.

I agree with the first half, the second part with the property tax I'd be a bit more wary of unless they radically reform property taxes. Right now, my property taxes are over 2x as high as my friends living in the city with similar value homes because property taxes are based more on lot sizes / home sizes than home values. I'd be much more okay with distributing that money equally if property taxes were based on home values instead of penalizing me for purchasing a large space vs a more desirable location.

[Dominator83]

I don’t disagree with that, I just dont think that rate of exodus expands significantly by moving tax rate from 5 to 7% tax rate for millionaires. I could be wrong of course.

I can tell you if my property taxes were cut in half and my state tax rate was at 3% instead of 5% that I probably wouldn't consider moving. Money and weather are the two reasons we would consider leaving.

Just curious, but what states are you looking at moving to?

Lots of places, but haven't really done my full research on all of them.

Florida, California, Arizona, North Carolina, Oregon, and Texas (as you can tell we are mostly looking at much warmer places).

I would cross off California. Their situation in terms of high taxes yet still being broke, is worse than ours. Which says alot

[dougthonus]

I would cross off California. Their situation in terms of high taxes yet still being broke, is worse than ours. Which says alot

California is the only place in the country I know of that has nice weather all year round. Its the only option that's more expensive than where we live now, but for year round use of beaches and great weather, it is still on the table as some place we'd consider. The total cost probably makes it less likely of the options though, especially since we probably want to retire wherever we move to, if we in fact move, and California might be fine while we're working but expensive if we retire.

[Friend_Of_Haley]

The spending again has to be parsed. Its the spending towards the underfunded pensions that's a real drag. If we want to attract in-migration or keep out-migration down, we probably need to increase spending in other areas. Hell, I'm not sure if anyone has just considered outright paying workers to move to Illinois, maybe that needs to be explored.

I think its something like 25% of the budget that goes towards pensions right now? Let's say they pass a tax increase that could raise revenues by 5-10% and pass pension reforms that lower the unfunded liabilities by 5-10% percent. You split the extra revenue/savings; 1/3 towards paying down the pension liability, 1/3 towards expanding services which haven't actually grown in real terms, and 1/3 towards towards direct relocation packages aimed at businesses and workers to move to IL. If you can successfully grow the tax base with those incentive packages, you eventually fund your services with the increased tax base and then free up that money to pay down even more of the pension liability, until you can reach a point where you can then ramp those tax increases back down, which also hopefully makes us more attractive, and you can also ramp down the relocation incentive spending as well. Maybe within in 20 years you're back to that middle-high range for taxes with strong services (without promising unrealistic future promises that you don't fund).

Part of that is probably also tax reform which looks at property taxes and redistributes it a bit more throughout the state. If we're going to be a competitive in-migration state, the high housing/tax prices of many of our best public schools in places like Hinsdale, Winnetka, etc. are inaccessible to most of the country - spread the wealth around and make our middle to lower income neighborhood super accessible to in-migration. Plus if a portion of the property tax base was state instead of local, our communities aren't bargaining each other down just to keep businesses that are already in the state.

Basically its a problem that has to be attacked on many fronts. A progressive tax structure logically should be a part of that, but I think they did a horrible job from it, and wasted at least a year not doing much else and banking on only that. Big failing.

I agree with the first half, the second part with the property tax I'd be a bit more wary of unless they radically reform property taxes. Right now, my property taxes are over 2x as high as my friends living in the city with similar value homes because property taxes are based more on lot sizes / home sizes than home values. I'd be much more okay with distributing that money equally if property taxes were based on home values instead of penalizing me for purchasing a large space vs a more desirable location.

The libertarianish side of me says the state would tax only land value.. Basically a lower/broader tax, which they of course could parse into a residential/recreation/farm/commercial rates. Municipalities could add their tax based on however they do it now, a mixture of land and added value.

Definitely think it would need to be a broad reform though that boosts the homeowners exemptions and guarantees that property tax growth for homeowners is limited. A property tax is actually a fairly progressive tax as long as growth is contained (primarily as protection for Middle class land owners). But to some extent you'd have to ease into such large changes as well because sudden changes to the property tax base will reverberate through the real estate market, perhaps with unintended consequences.

Curious as to your antectode about taxes though. At a high level I usually generalize it that wealthy areas have lower pro rata rates and poorer areas have higher pro rata rates to extract the revenue needed for schools (this is without regard to lot size, just total home value). Most municipalities as I understand it basically call assessed value as 1/3 of market value.

[Almost Retired]

I do an extensive amount of study on an issue as important as this election. I totally ignore popular opinion, popular "wisdom", corporate media and I don't watch TV. I could write a fairly long treatise here on the tea leaves that clearly (to me) point to a significant Trump victory today. I'll spare you that, but I will call the outcome here at 2:18 PM on Election Day: Trump 327 Biden 211.

Well if you only count the non-fraudulent ballots then Trump wins 308-230. So I wasn't as far off as you seem to think. I'm an old fart. But I've known since The Gulf of Tonkin incident in 1964 that America is a corrupt and morally reprehensible country. One reading of the Report by Engineers and Architects for 9/11 Truth about 9/11 and you'd agree with me on that. The election was a farce, typical of a 3rd World banana republic. Which we are closer to becoming than perhaps you realize. Stalin ran cleaner elections in the USSR. It doesn't matter to me that much either way, I'm 21 months away from retirement in Boquete, Panama. We've had the plans in place for a few years now. The election had no bearing on our plans. We've been working toward our goal for 5 years. But I wish you all luck. Sincerely. You're going to have a difficult decade ahead.

[dice]

I don’t disagree with that, I just dont think that rate of exodus expands significantly by moving tax rate from 5 to 7% tax rate for millionaires. I could be wrong of course.

I can tell you if my property taxes were cut in half and my state tax rate was at 3% instead of 5% that I probably wouldn't consider moving. Money and weather are the two reasons we would consider leaving.

Just curious, but what states are you looking at moving to?

Lots of places, but haven't really done my full research on all of them.

Florida, California, Arizona, North Carolina, Oregon, and Texas (as you can tell we are mostly looking at much warmer places).

I would cross off California. Their situation in terms of high taxes yet still being broke, is worse than ours. Which says alot

every state is now "broke" because of the pandemic

california had a 21 bil surplus