Tax code not pensions the problem

Opinion: Letters To The Editor

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In a recent edition of Wednesday Journal, Jack Crowe wrote an imaginative column comparing our state capital and its workings to Dante's Inferno. Unfortunately he identified the state's pension problem, instead of the real culprit, as the cause of Illinois' fiscal woes. The true cause of Illinois' fiscal problems is the state's inability to generate sufficient revenue to fund its basic services.

Since passing the flat income tax in the 1970s the state has suffered through years of budget deficits which have resulted in the underfunding of the public schools, health care programs, etc., and in its inability to pay its vendors in a timely manner. An antiquated sales tax and corporate blackmail (give us huge tax breaks or we leave the state) have also contributed to the tsunami
of indebtedness.

Al Popowits
River Forest

Reader Comments

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Bill from Oak Park  

Posted: August 4th, 2013 1:57 PM

Required reform in Illinois: Pensions should be defined contribution for all state and local employees with a generous employer match, funded on a yearly basis. This eliminates ridiculous low retirement age, double dipping, high year pension basis, state funding holidays, retention of crap employees until retirement age and other state and union chicanery. Also civil servants and government unions and their retirees should be on Obama Care with no waivers. Social Justice for all...

Jim from Oak Park  

Posted: August 4th, 2013 12:14 PM

Illinois has a SPENDING problem, not an Income problem. IN FY 2012, the year-earlier income tax hike added $4.7 BILLION to the state's revenue. Yet, the state's fiscal condition gets worse and debt rating drops because state government doesn't have the guts to address spending. What's so hard to understand about that?

Dan in Oak Park  

Posted: August 4th, 2013 8:00 AM

Ok, we should change the tax code to increase revenue. I propose that all retirement income be taxed, including teacher pensions and SS benefits, just like the IRS does. Why should retired teachers and Seniors get their state government for free? I thought everyone was supposed to pay their fair share.

Unfortunately  

Posted: August 2nd, 2013 12:46 PM

Yes, the issue IS over-spending. Further, regarding the state not making the "required" pension contributions in the past: the unions knew this and remained silent. Why? Because they "knew" that the IL Constitution "guaranteed" their pensions. Therefore, increased state money for wage increases, etc. led to higher pensions - and so the union leaders had a win/win with Madigan/Cullerton/Harmon. Today? Those politicians PRETEND to not agree, but the status quo makes the unions happy!!!

muntz  

Posted: August 2nd, 2013 12:25 PM

@Bruce-I understand the progressive tax. My concern is what the govt does after it's in place, because once it's there, it becomes much easier to raise the rates in the higher brackets. But perhaps I'd be willing to trade this progressive tax for ANY tax on pensions, which is currently ZERO.

Who stole the teachers pension? from Fool me twice  

Posted: August 2nd, 2013 2:28 AM

Please find below a list of respondents qualified to provide senior banking/book running services to the State of Illinois through the July 12, 2011 Request for Qualifications: ELLEN COSTELLO CEO and US Countryhead - BMO Financial Corp. JOHN R. ETTELSON President and Chief Executive Officer - William Blair & Company MATTHEW R. GIBSON Partner, Head of Investment Banking, Midwest Region - Goldman, Sachs & Co. JAMES T. GLERUM, JR. Managing Director and Chairman, Regional Banking for North Ameri

Bruce Samuels from Oak Park  

Posted: August 1st, 2013 11:12 PM

No need to be sarcastic muntz. The way a progressive tax works is that one would pay 3% on the first $100,000 and 5% on anything above. If someone is saddled with school debt, the code could give them a deduction. Despite the failure of the fed to set aside a SS trust, there is no way that they are not going to pay. It would be political suicide.

Stealing the teachers pension from Fool me once  

Posted: August 1st, 2013 10:21 PM

http://capitolfax.com/2013/08/01/the-fix-is-in/ I thought so ...

muntz  

Posted: August 1st, 2013 9:20 PM

@Bruce-So what should the progressive tax rate be for pensioners? It's currently ZERO. And now $100K makes you wealthy? I'd guess most of the folks making $100K+ are saddled with school debt the likes of which pensioners had never seen, not to mention contributing to SS they most likely will not ever collect. But now these rich youngsters have to pay the debt of older generations who passed the buck. Gee, thanks, Bruce!

Bruce Samuels from Oak Park  

Posted: August 1st, 2013 8:45 PM

I agree with Al. At least 38 other states have progressive income taxes. The middle class shoudn't have to pay 5% but folks making over $100,000 should. No one should have to pay a sales tax to buy basic foods, like milk and bread. Tax only the junk foods. Tax speculation in the financial markets to increase revenue. Cut waste and fraud. Example: Blago gave Calvin Giles, a do-nothing former state rep, a job in Springfield.

muntz  

Posted: August 1st, 2013 4:52 PM

Mr Popowits is a former teacher drawing a pension that deducts ZERO in IL taxes. So Al pays ZERO state taxes on what I'd guess is his primary source of income, yet feels it's necessary to raise taxes for everyone else? Perhaps THAT is the part of the tax code that truly needs changing. Sorry, Al, you were great on home rule, but you've been exposed here.

Marc from Oak Park from Oak Park  

Posted: August 1st, 2013 4:02 PM

The issue is entirely spending with pensions being a big part of the problem. Since 2009 Illinois tax revenue has increased by $7 billion from individual income tax (65%); $1 billion from corporate taxes (40%) and $3 billion (20%) from all other sources. And yet there is still a deficit. A progressive tax is just a ruse to make the 5% rate permenant and have even higher rates on 85% of wage earners.

Neither  

Posted: August 1st, 2013 3:17 PM

Most reasonable voters don't mind the spending or the pensions or the taxes. It's the mismanagement we can't stand. We want the right taxes to pay for the right things. Good luck with that though! Fixing mismanagement isn't going to happen so long as you guys are busy fighting about whether it's taxes or spending that is the problem.

Uncommon Sense  

Posted: August 1st, 2013 2:45 PM

IL has a SPENDING problem, not a taxing problem.

Bill from Oak Park  

Posted: August 1st, 2013 2:14 PM

Al, Other states have flat income tax rates or no income tax and they are able to balance their budgets and fund their pensions. Illinois raised the flat tax from 3 to 5% with no resulting stability in the states finances. You offer no proof that increasing income with a progressive tax will provide any stability in IL.

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