Most of the conversation today will be about our grifter president and the NY Times release of his taxes and non-payment of same.
There are two narratives at play in the Times’ story:
He was a shitty businessman.
He is a tax cheat.
Both are true.
Will it move the election needle? It doesn’t need to move it much. All the momentum seems to be on the Biden side if we don’t fall into complacency or barring voting hanky panky.
But I want to talk about something else: The argument that if Illinois passes the constitutional amendment also on the ballot, that ends the flat tax and enacts a progressive income tax, all the rich people will flee the state.
Crain’s Chicago Business – not exactly the Daily Worker – can’t find solid evidence that’s true. And if they could, believe me, they would.
According to the Civic Federation there are 20,000 people in Illinois who make over a million bucks and would see their income tax rates go up if the amendment were passed.
All the rest of us, 97% of the wage earners who pay state income tax, would see their tax rates stay the same or go down.
And by having those 20,000 pay a larger share the state would bring in billions more in revenue.
A constitutional fix to the tax rates won’t solve every problem. We have corporate Trump-like grifters in Illinois with La Salle Street lawyers and accountants who legally cheat on their tax bills. The amendment won’t change that.
And we have politicians who will jump at the chance to give Amazon a tax break to build a distribution warehouse and pay non-union workers minimum wage. The amendment won’t fix that either.
It’s a small reform that will bring greater equity to the way the state raises revenue.
The idea that those 20,000 millionaires will leave Dodge the moment that have to pay a higher tax rate is not supported by facts, according to Crain’s A.D. Quig.
Quig looked at several states who raised tax rates on the richest residents and he couldn’t establish a solid trend one way or the other.
Determining direct impacts of tax hikes can be difficult: Revenues fluctuate based on ups and down in individuals’ earnings and people moving in and out of the state. Reasons for migration also vary—people move for housing, work, weather and, in some cases, better tax rates.
That suggests that more is being made of the threat than there is evidence for.
Looking at New Jersey, which also raised it top rates, Quig found:
The rate of millionaire-bracket outmigration “certainly increased” after the 2004 tax hike (losing 2,267 in net outmigration between 2004 and 2007). But the overall number of millionaires still went up by 43 percent. Why? The state is “a producer of millionaires, not an importer,” Young and Varner found. Income dynamics—residents making more money—matters more than migration.
Is Chicago a magnet and producer for millionaires? It appears that it is, for better or worse.
Much has been made of outmigration from Illinois. Those in the Chamber of Commerce and the Illinois Policy Institute would have us believe it was due to taxes.
A 2017 report by the Center for Tax and Budget Accountability addressed the complex causes for the state’s migration.
For example, close to a third of Illinois’ net domestic migration is eliminated by including immigration from foreign countries. Even more striking, focusing only on negative net migration ignores the roughly 300,000 people who have chosen to move to Illinois in each of the last several years, whose decisions about where to locate in the state might shed some light on what Illinois ought to be doing more of. And looking only on statewide migration — with a few zoom-ins to isolated counties — misses how dramatically different the migration picture is from one part of the state to another.
The rest of this post is an FAQ of sorts that seeks to explain Illinois’ migration situation beyond just the hand-wringing headlines.
The bottom line, according to the CBTA, is that Illinois’ gross out-migration rate ranks just 29th out of the 50 states and the District of Columbia, although the IPI would have you believe we are number one.
Illinoisans are less likely to move out of state than are the residents of any comparable state.