Taxes

  • Tax traders, or tax-increment financing?

    23 July 2015

    Interview with the Chicago Reader's Ben Joravsky on the questionable benefits of having financial markets in Chicago, and more.

  • State rep blames budget crisis on tax windfall for wealthy

    20 July 2015

    Illinois' budget shortfall is due to a tax decrease that has largely benefited the wealthy, according to 39th district Rep. Will Guzzardi (D-Chicago).

  • Chicago's big, bad bonds: revenues or ruse?

    1 July 2015

    Interview with the Chicago Reader's Ben Joravsky on possible collusion between bond raters, investors, and city officials—and more.

  • Lesser-known arguments against the TPP

    15 June 2015

    There was a local angle in recent news about the Trans-Pacific Partnership (TPP).

    It has to do with Democratic Rep. Mike Quigley of Chicago. Quigley was the only House Democrat from Illinois to vote for authorization of Fast Track authority, also known as Trade Promotion Authority, regarding the TPP.

    Most of the reporting we've seen for and against the TPP—including Quigley's own newspaper op-ed piece—focuses on how many U.S. jobs the TPP will create or destroy. Not as widely reported are other, potentially more insidious aspects of the TPP—which we know about thanks to leaks of TPP documents from Wikileaks and others.

    According to the leaks, the TPP would:

    • Empower foreign firms to sue U.S. governments if regulations interfere with the firms' "expected future profits." Foreign corporations could bypass domestic courts and sue U.S. governments before a tribunal of private lawyers not answerable to the U.S. legal system. This so-called investor-state dispute settlement process could thwart our protections against environmental, food safety, banking, and manufacturing misdeeds, and award our tax dollars to corporations for violating laws that interfere with their profits.
    • Require the U.S. to let foreign countries import foods that violate U.S. food safety laws. Foreign entities could challenge U.S. safety rules on pesticides, labeling, or additives as "illegal trade barriers"—forcing the U.S. to allow the import of unsafe food.
    • Undermine efforts to re-regulate the financial sector. The TPP would (a) keep countries from outlawing particularly risky financial products; (b) prohibit policies that keep banks from growing "too big to fail;" (c) make it easier for banks to make hedge-fund-style bets with depositors' savings; and (d) prohibit financial transaction taxes, which provide significant revenues in dozens of countries world-wide.
    • Force the U.S. to waive "Buy American" procurement policies for all firms operating in TPP countries, offshoring our tax dollars to create jobs abroad.

    Interestingly, it seems that not even Congressional opponents to Fast Track press these arguments.

  • Trumbull closing shows lack of population planning

    16 September 2014

    Interview with the Chicago Reader's Ben Joravsky on how CPS's desire to maintain segregation might've kept at least one school open, and more.

  • State governor campaign proves taxing

    9 July 2014

    Interview with the Chicago Reader's Ben Joravsky on the absence of free-market advocates from debate over corporate subsidies, and more.

  • Pension 'crisis' could meet its match in TIFs

    2 May 2014

    Interview with the Chicago Reader's Ben Joravsky on diverting TIF slush to pensions or other priority obligations, and more.

  • South Loop deal tells of TIF's twists

    8 April 2014

    Interview with the Chicago Reader's Ben Joravsky on why some private parcels in TIF districts generate no money for taxing bodies, and more.

  • The latest reminder of how Mayor Daley did business

    20 November 2013

    Interview with the Chicago Reader's Ben Joravsky on why the city of Chicago is suing its own park district, and more.

  • Corporate subsidies shore up Cullerton's "no pension crisis" claim

    24 October 2013

    "I don't think you can use the word 'crisis' to describe" Illinois' pension-funding problem.

    So said Illinois Senate President John Cullerton on Sunday, Sept. 20, 2013, on WGN radio's "The Sunday Spin" show.

    Cullerton spoke of the pension fixes that the state legislature has considered this year, and still might pass. He estimated that those fixes, mostly in the form of cuts to pensioners' benefits, "will save annually anywhere from $750 million to $1.5 billion." However, Cullerton said, Illinois will lose about $5.4 billion in annual revenue when the state's personal and corporate income tax rates go down in 2015.

    A partial transcript of WGN's interview with Cullerton appears below.

    The Chicago Sun-Times, in an Oct. 23 editorial, called Cullerton's assessment "nonsense."

    If state legislators heed Cullerton, wrote the Sun-Times, Illinois will lose something "the state needs most—a bill that significantly reduces pension costs."

    In contrast, a recent report identifies a different source of states' budget woes: corporate tax subsidies.

    The report, written by David Sirota and published by the Institute for America's Future, says that "the amount states and cities spend on corporate subsidies and so-called tax expenditures is far more than the pension shortfalls they face."

    The report says that proponents of pension reductions claim "that cutting retiree benefits is the solution [to state revenue shortfalls] rather than simply rolling back the more expensive tax breaks and subsidies."

    According to data collected by The New York Times and cited in the report, Illinois governments spend at least $1.5 billion annually on tax subsidies, including:

       • $874 million in sales tax refunds, exemptions, or other sales tax discounts

       • $452 million in corporate income tax credits, rebates, or reductions

       • $11.9 million in personal income tax credits

    The Times analysis identified the four corporations receiving the largest subsidy amounts: Sears, Google, Archer Daniels Midland, and Chrysler.

              •           •           •

    Partial transcript of WGN Radio's interview of Illinois Senate President John Cullerton on Sept. 20, 2013

    [Sen. Cullerton said that he supported the pension reform bills passed earlier this year by the Illinois House and Senate, respectively. And he spoke optimistically of a proposed "compromise" bill currently under consideration by the legislature's bipartisan pension reform committee.]

    "It's not that we owe a hundred billion dollars to somebody right now. It's just that folks don't wanna put as much money into pensions. They'd rather spend it on something else. Or they'd rather have their taxes lowered.

    "And these pension bills that we're gonna vote on—and hopefully pass, and I'm supportive of it—the overall effect is gonna allow us to lower our income tax about a quarter of one percent. So if we pass the bill it'll be easier to lower our income tax by a quarter of one percent; if we don't, it'll be more difficult. And that's really what it's about.

    "Now, I wouldn't call that a crisis. I think that people should put that in perspective."

    "[The current income tax rate is] 5 percent for individuals, going to 3.75 [percent in 2015], and the corporate is 7, it goes to [5.25]. That, on an annual basis, is a drop in revenues of about $5.38 billion . . . and these pension bills that we've talked about will save annually anywhere from $750 million to [$1.5 billion]. So you're still gonna have real huge cuts we'll have to make if we don't raise that income tax higher than what they're scheduled to go down to.

    "The pension reform, then, is about tax reduction, not about the solvency of the pension fund or about diverting money to spend more money on education."

    "There's a great, strong feeling out there in the general public. Ya know, there's 720,000 folks that are affected by the pensions—both retirees [and] actives. That's all of the teachers outside Chicago, that's all the university employees and community college employees, and all the state employees and the judges and the General Assembly. But there's, ya know, almost 13 million people here [in Illinois]. And a lot of folks don't have a defined benefit plan as we do. And, by the way, the inflation rate now is [1.5] percent; these pension [benefits are increased annually by] 3 percent. So there's a strong argument to lower these benefits—that's why I've supported this legislation.

    "But just keep in mind: It's not going bankrupt. The money that we save by lowering those benefits is gonna be used to lower the tax rates.

    "This would surprise people, I guess: We have a balanced budget in Illinois. Nobody would know that, right? We are not spending more money during this budget than we have taken in. We passed a budget that says you can only spend this much money and this is the amount of money that we take in."

    "Let's talk about [the state's unpaid bills.] Within that budget we include money to pay down old bills, including pension obligation bonds that we borrowed—and thank god we did—for the two years we were in the recession. Because we borrowed money, we put it in the pension fund, we've earned 800 million more than what the interest rate has been.

    "But we're also paying down bills to vendors. We've paid down [$3.5 billion] in the last three years, and by the time we get to the end of this fiscal year, we'll have about [$2.5 billion] in bills over 60 days out of a $71 billion budget. So we've made tremendous progress in that.

    "Remember, just like anybody's home budget, they have to pay mortgage, they have to pay student loans . . . they don't pay 'em all off in the first year. But they keep on including in their budget enough to pay what they owe. That's what we've been doing."

    "Businesses are not fleeing Illinois because our taxes are so high. The fact is that our state tax rate is lower than all the other states that surround us, and almost about the same as Indiana."

  • Rahm's latest plan: close the schools, build an arena

    23 May 2013

    Interview with the Chicago Reader's Ben Joravsky on how an almost-dead TIF district can rob from its younger neighbor, and more.

  • Welcome to U.S. Cellular Field, home of the sweetheart deal

    25 April 2013

    Interview with the Chicago Reader's Ben Joravsky on whether the White Sox could survive financially without taxpayer subsidies, and more.

  • ICE, CME, and TIFs

    3 January 2013

    Interview with the Chicago Reader's Ben Joravsky on the proposed state legislation to tax financial transactions and where it went, and more.

  • Taxation by obfuscation

    13 December 2012

    Interview with the Chicago Reader's Ben Joravsky on what, exactly, CivicLab will reveal about tax-increment financing districts, and more.

  • My Property Tax Bill Is Defective—I Want a Refund!

    1 March 2012

    imagename Interview with the Chicago Reader's Ben Joravsky on how local government has already lost money on the NATO summit, and more.

  • State Tax Break for the Merc Is More Laughable with Each Passing Day

    19 January 2012

    imagename Interview with the Chicago Reader's Ben Joravsky on origin of the mythology around CME Group's tax-burden claim, and more.

  • Water + Sewers = Slush Fund

    10 November 2011

    Interview with the Chicago Reader's Ben Joravsky on a beginner's guide to the city's budget document, and more.

  • Do the Math

    24 November 2010

    coinsInterview with the Chicago Reader's Ben Joravsky about how Cook County's property tax system pacifies the public, and more.

  • No White Knight, No Silver Bullet

    14 October 2010

    knightInterview with the Chicago Reader's Ben Joravsky on how to remedy the over-reliance on property taxes, and more.

  • Cook County Needs Cojones

    21 January 2010

    Interview with the Chicago Reader's Ben Joravsky on the scripting of Joint Board of Review meetings, and more.

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