A recent contributor to these pages [Rauner’s right, Harmon’s wrong, Viewpoints, July 1] disparaged state Senator Harmon’s recent letter in Wednesday Journal in which he deplored Governor Rauner’s attack on the middle class [Rauner’s vision harms the middle class, Viewpoints, June 3]. 

Unfortunately most of the contributor’s criticisms were ill informed.

In advocating that Illinois follow Scott Walker’s Wisconsin model, the writer exhibited an ignorance of current affairs. For example, he contends that the Wisconsin model has been an economic success when just the opposite is true! Had he been reading the Chicago Tribune (6/29/15), he would have known that “… the state’s current budget woes are in a great measure self-induced. Walker and his Republican allies in the legislature gave themselves no cushion for error in their bet that broad tax cuts would jump start the state’s economy and more than pay for themselves.” [Wisconsin’s Taxpayers Alliance]. Today the Badger State has a large deficit and ranks 36th in employment growth among the states. This is not the model Governor Rauner should be emulating.

The contributor contends that Illinois residents are moving to Indiana to escape high property taxes. If this is so, I hope they have done their homework or they might end up paying more in overall taxes. For example, Indiana residents are fully taxed on all private pension income with the exception of Social Security. Illinois residents’ pension income is totally exempt from state income tax. In addition, Indiana’s sales tax is higher than is Illinois’.

In carping that Illinois school pensioners receive more in pensions than they contribute, the critic ignores the most basic rules of investing. Illinois teachers contribute 9.4% of their salary to an annuity/pension for a period of 20, 25, or 30 years. During that time the proceeds are invested in stocks, bonds, and real estate where they earn interest and dividends. Only after reaching the prescribed age does the annuitant receive a benefit. Would it make sense for a teacher to invest her earnings and then receive only the amount she contributed (the purchasing power of which would have been eroded by inflation)? I think not.

Finally, more than most states, Illinois supports its schools with the property tax. To freeze property taxes, as the writer suggests, would be disastrous for poor school districts and a hardship for wealthier ones. 

The basic dilemma is that Illinois has had a longstanding revenue problem. Illinois’ flat tax has, since its inception in 1970, never generated sufficient revenues to enable the state to pay both its vendors and its constitutionally mandated contribution to the state’s five pension funds. 

Part of an overall solution to the state’s financial crises should include a graduated state income tax. This tax would raise approximately $2B in additional revenue and reduce the tax burden for about 94% of Illinois taxpayers. 

In short, what Illinois needs today are realistic solutions, not conservative nostrums.

Al Popowits

River Forest

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