Illinois House and Senate pass 67% income tax increase

[The Dowager Mod]

STATE      MEDIAN FAMILY INCOME     TAX RATE FOR MEDIAN
Iowa                $61,156                             7.92%
Wisconsin        $62,638                             6.50%   
Illinois              $66,806                             5%
Indiana            $56,432                             3.40%

HAHA

[○∙◄☻¥tπ[╪AV┼cVê└]

What a bunch of whiners. Many middle class Californians are in the 9.3% bracket. The cutoff is $47,000.

[CatoMinor]

Yeah, it's a pretty hackish headline if I ever saw one.

You have no room to talk about hackish headlines.

[fezzyfestoon]

Good

[Franzl]

Signed by Quinn, BTW.....not a surprise, of course.

[muon2]

The tax may seem modest but there are other factors that make it worse than it seems.

IL has one of the highest sales taxes in the nation when the local share is added. Some items in some jurisdictions exceed 11% and Chicago has the highest sales tax of any major city, only recently having it drop from 10.25% to 9.75% after it cost the Cook County Board President reelection in 2010.

The property tax burden is also quite high in IL. The state typically ranks in the bottom third of states for property taxes for business as assessed by the Tax Foundation. The high tax is largely due to the high reliance on local property taxes to fund schools, in this respect IL is among the 5 states with the least use of general state funds to support schools. Suburban Chicago taxpayers outside of Cook may pay property taxes equal to 4% of the value of their homes. The Cook rates for primary residences are set low by state statute and skew the average rates for the state as a whole.

The income tax in IL had been one of the lowest rates in the US, but there are virtually no deductions, so it is often comparable to states with higher rates that do permit some of the common deductions found in federal tax code. Finally there is an additional income tax on businesses equal to 2.5%. It's called the personal property replacement tax, and is distributed to local governments, but it really is an income tax, so the new corporate rate is not 7% but 9.5%, and applies even for the lowest income businesses.

I wouldn't look only at the income tax hike, but how this positions IL in competition with other Midwestern states when the whole tax environment is assessed.

[Torie]

Is it true that the Dems did not cut the budget to make the books balance, so the split was 100% on the increased revenue side, and 0% on the cut spending, side Muon2?  I read that somewhere and found it hard to believe, but then, stuff happens out there.

If it was the 100-0 solution, that Obama's alleged preference for the feds squaring the circle of a 50-50 split makes him seem like a radical conservative, pinch pennying, miserly, social Darwinist, by comparison.

[muon2]

Is it true that the Dems did not cut the budget to make the books balance, so the split was 100% on the increased revenue side, and 0% on the cut spending, side Muon2?  I read that somewhere and found it hard to believe, but then, stuff happens out there.

If it was the 100-0 solution, that Obama's alleged preference for the feds squaring the circle of a 50-50 split makes him seem like a radical conservative, pinch pennying, miserly, social Darwinist, by comparison.

The only legislated cuts were some bipartisan reforms for Medicaid that will save probably less than 1 B$ over 5 years. The tax hike was accompanied by a bill that limits expenditure growth to no more than 1.8% per year for four years - that's growth, not cuts. There's of course an out for that, in that the governor can call an emergency.

I'd say that pretty much puts it all on the taxpayer.

[Swedish Rainbow Capitalist Cheese]

So on how many levels do Americans pay tax? Just State + Federal or more local level as well? How many percentages is the federal income tax? Just wondering so I can compare it to Swedish tax-levels.




 

[memphis]

So on how many levels do Americans pay tax? Just State + Federal or more local level as well? How many percentages is the federal income tax? Just wondering so I can compare it to Swedish tax-levels.

American taxation is so complicated that it's nearly impossible to understand, much less explain.
Here's the easiest way to compare nations:

http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

[I spent the winter writing songs about getting better]

So on how many levels do Americans pay tax? Just State + Federal or more local level as well? How many percentages is the federal income tax? Just wondering so I can compare it to Swedish tax-levels.

What memphis said is mostly correct, but essentially yes, there are tax levels below the state. However these are property/sales taxes, such municipalities don't really have any way of collecting an income tax. Those taxes can get complicated though, especially as both counties and cities impose them.

For example: Minnesota has a 6.5% sales tax rate. In 2008 an amendment was passed tacking on an additional 0.375% for arts and wilderness preservation funding, so the total tax is now 6.875%. Minneapolis has an additional 0.5% city sales tax. Five counties in the metro have a 0.25% tax for transit funding, and Hennepin County has a 0.15% sales tax to fund the building of a new sports stadium (yes, people here were just as outraged at the passing of that as you can imagine.) As a result Minneapolis has a sales tax rate of 7.775%, but there are five parts to that, and they are charged on three different levels (arguably four when you consider the transit funding tax is administered on a group of counties under a unified metro council). It gets even more complicated when you consider the state has an additional 2.5% tax on alcohol and Minneapolis has a 3% tax on hotels just for starters. It is worth noting though that Minnesota and all the local levels exempt food (though not candy or prepared food) and clothing from the sales tax. North Dakota has a lower sales tax rate (5%), but it doesn't exempt those items, so when I was growing up my mom would always buy new clothes and shoes for my brothers and I while we were in Minnesota.

It gets even more ridiculous when you consider that not all localities have the same rights to administer taxes. This varies state by state, but in Minnesota not every city can impose a local sales tax without approval from the state. Minneapolis can raise taxes all it wants due to its charter, so can St. Paul and the other larger cities in the state. However the professor for one of my classes in college was the mayor of North Mankato, a suburb of Mankato where I went. Mankato had a charter that allowed it collect sales taxes on its own (and it had a 0.5% sales tax) but North Mankato was not permitted to do so despite said mayor and the entire city council being unanimously in favor of a 0.25% one. So approval to allow North Mankato to collect that along with many other smaller localities was required and was passed by the legislature in an omnibus package. Douchebag Pawlenty vetoed it because he didn't like the common sense idea of indexing the budget to inflation. And it's really not even worth it to get into how messed up property taxes can be.

Federal tax brackets are here: http://www.moneychimp.com/features/tax_brackets.htm

[Swedish Rainbow Capitalist Cheese]

Alright I think I get it a little more now.

Well in Sweden you pay a flat income tax to the city you live in, as well as your county. The tax levels are decided by the cities and counties themselves. Where I live we have a County Income Tax of 10,4% and a City Income Tax of 20,6,%. Then there's a progressive federal income tax on all income of that exceeds a certain number of yearly income.

Sales taxes are paid to the federal goverment only. (So are most other taxes)