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Mike Madigan’s regressive tax system.

January 31, 2013

regressive-state-taxes(1)

 

Chicago Magazine:

Illinois taxes the poorest 20 percent of its residents at a higher level than the national average; it’s one of the few states above 13 percent, 2.7 percent above the national average.

It’s above average for the middle class, as well: the national average for the middle 60 percent is 9.4 percent, so Illinois is 1.7 percent above the national average. Only Arkansas (11.2 percent), Hawaii (11.3 percent), and New York (11.2 percent) tax the middle class at higher rates than Illinois.

As you go up the tax bracket, the effective state and local tax rate falls, but it remains relatively high. Illinois taxes the top 80-95 percent of residents at nine percent, behind only Arkansas and Connecticut (just barely), Wisconsin (9.7 percent), and New York (11 percent), and 1.3 percent above the national average. The 95-99 percent income bracket gets hit at 7.6 percent, just a bit above the national average of 7.2 percent.

Only on the top one percent does Illinois fall below the national average: 4.9 percent compared to 5.6 percent.

5 Comments leave one →
  1. January 31, 2013 10:48 am

    Thank you for this very important and relevant data

  2. February 1, 2013 6:29 pm

    Mr. Klonsky, to imply that this is a flat income tax versus progressive tax issue is misleading because you left out the rest of the article you sited: “It’s not the flat tax doing most of the damage…in part because the state increased its earned-income tax credit from five to ten percent.” It’s the sales and property taxes that are the big culprits for making the system regressive, which the article and the study it references explain in detail, and which Madigan only partly controls. Making the income tax rates progressive will not solve much. Nor will it raise nearly enough revenue ($2.5B, max) to solve the pension and budget problems, which you have never refuted.

    And the article might have added that the corporate income tax is also horribly regressive, a tax unions want to increase.

    BTW, when I said earlier that the real pension deficit is around $200B you said that was preposterous, or something like that. Here’s the most recent financial expert to add to the list on which I based that number: A U of I finance professor. Actually, he says it might be $300B! http://illinois.edu/lb/article/72/70726

    Teachers and unions remain in willful denial about the scope of the calamity at hand.

  3. Fred Klonsky permalink*
    February 2, 2013 11:34 am

    Mark, I didn’t leave out anything. I linked to the entire article.

    You seem to pass by the property tax issue pretty quickly. About five years ago the teachers union and others supported HB174, which would have moved in the direction of equalizing school funding, lowering local property taxes in exchange for a 1% increase in income taxes. Then as now, the quality of education and the funding of it is determined by the students’ zip code (reflecting race and income). Madigan opposed HB 174, as he opposes most all progressive tax initiatives. To argue that tax policy in this state does anything but favor the rich and punish the working class and poor is bullshit. But go on.

  4. February 2, 2013 11:44 am

    I didn’t argue that the system doesn’t favor the rich. I pointed out that the article you sited correctly pins the cause regressivity on the sales and property tax, not Madigan’s income tax. Your love of straw man arguments is deep.

    • Fred Klonsky permalink*
      February 2, 2013 11:49 am

      Mark.
      I don’t mind posting your comments.
      But every time you make a personal attack on me (or anybody else) I make a tally mark.
      I claim your argument is bullshit. You respond with something about me. You don’t know me – who or what I love.
      I have a limit and you are getting close.

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