Business & Economy
Governor Quinn Signs Bill Authorizing $1.6 Billion for Next Phase of Illinois Jobs Now! PDF Print E-mail
News Releases - Business & Economy
Written by Richard Martin   
Wednesday, 11 July 2012 11:56

Announces $211 million from Illinois Jobs Now! for 15 CREATE projects;

Additional $93.8 million for City of Chicago road & bridge projects;

Next Phase to Create Nearly 20,000 Jobs

 BELLWOOD – July 10, 2012. Governor Pat Quinn today signed a law to begin the next phase of his historic Illinois Jobs Now! capital program, which will create jobs, strengthen our transportation system and support economic growth across Illinois. U.S. Transportation Secretary Ray LaHood, Illinois Transportation Secretary Ann Schneider, local officials and labor representatives joined the governor as he signed House Bill 4568, authorizing the Illinois Department of Transportation (IDOT) to proceed with $1.6 billion worth of road, rail and transit projects across Illinois.

As part of Governor Quinn’s commitment to building a 21st century transportation network in Illinois, this next phase in Illinois Jobs Now! will create or support an estimated 18,400 jobs. The governor also signed two additional bills to support transportation projects.

“Three years ago, we passed the largest capital construction program in Illinois history to put people to work repairing roads, bridges and transit systems across our state,” Governor Quinn said. “From building new lanes on Route 13 in Southern Illinois, high speed rail from Chicago to St. Louis, to rebuilding Wacker Drive in Chicago, Illinois Jobs Now! is strengthening our economy and infrastructure every day. Today’s law ensures that Illinois will continue moving forward.”

Sponsored by Senate President John Cullerton (D-Chicago) and Rep. John Bradley (D-Marion), HB 4568 authorizes the issuance of more than $1.6 billion in bonds to pay for $817.3 million in new highway projects, including $100 million of direct funding for cities, counties and townships to make local road improvements. Also included is $799.5 million in mass transit and rail improvements during the 2013 fiscal year, including 15 Chicago Region Environmental and Transportation Efficiency (CREATE) projects and the Chicago Transit Authority (CTA) Red, Purple and Blue Line improvements.

Today’s law will improve transit safety and efficiency by dedicating $211 million of the announced state funds to CREATE projects, leveraging $10.4 million in federal Transportation Investments Generating Economic Recovery (TIGER IV)  grants and a $136 million investment from freight railroads.

 

“CREATE is a first-of-its-kind partnership among the U.S. Department of Transportation and Illinois, Chicago, Metra, Amtrak, and our nation’s freight railroads,” U.S. Transportation Secretary LaHood said. “These investments will lead to faster service, more efficient operations and more capacity for future expansion. CREATE is a great reminder that when we invest in our transportation infrastructure, we can put Americans back to work today, and help our economy grow for years to come.”

Governor Quinn also today announced $93.8 million to the Chicago Department of Transportation (CDOT) to resurface almost 100 miles of major arterial streets throughout the city. These new funds bring the governor’s total commitment to City of Chicago transportation improvements to $6.1 billion.

“We are proud of the achievements of Governor Quinn’s Illinois Jobs Now! capital plan, which has greatly improved safety and quality of life for Illinois residents,” said Secretary Schneider. “Funding critical transportation and rail projects will help improve the safety of the motoring public, improve access to public transit and alleviate travel delays.”

“I commend Governor Quinn on Illinois Jobs Now! This important capital program is helping to fund essential infrastructure and transportation projects across the Chicago area, and is helping to create and support hundreds of thousands of jobs around the state,” said Chicago Federation of Labor President Jorge Ramirez. “I am pleased that we can continue to support our workers with this next phase of the Illinois Jobs Now! program.”

Included in the CREATE projects is the $36.2 million construction of an overpass at 25th Avenue through Melrose Park and Bellwood. This project will support approximately 325 jobs, improve safety, reduce roadway congestion, minimize delays, and improve access to the Metra commuter station throughout the corridor from St. Charles Avenue to Lake Street.

 

“I want to thank Governor Quinn and Senator Durbin for their continued efforts to support projects that greatly impact our community,” Bellwood Mayor Frank A. Pasquale said. “I am delighted for our residents and business owners that funding has been approved to provide for a new bridge as a component of the rail grade separation project. The bridge will help make travel on 25th Avenue safer and faster, and make Bellwood an even more attractive place to live, work and play.”

“We are grateful to Governor Quinn and Secretary LaHood for recognizing the importance of this vital project and for providing the state and federal funding that will enable it to move forward,” Melrose Park Mayor Ron Serpico said. “It will provide a welcome measure of added safety for motorists and reinvigorate economic development in the 25th Avenue corridor.”

First passed by the General Assembly and signed into law by Governor Quinn in 2009, the six-year, $31 billion Illinois Jobs Now! is the largest capital program in state history. Of the $14 billion in the program dedicated for transportation needs, $10.7 billion has been spent on projects that have improved 6,426 miles of roadway and 961 bridges. The program so far has created or supported more than 140,000 jobs.

Governor Quinn also today signed House Bill 3875, sponsored by Rep. Marlow Colvin (D-Chatham) and Sen. Tony Munoz (D-Chicago), which extends the deadline date from July 1, 2012 to July 1, 2014 for when the Regional Transportation Authority may issue, sell and deliver specific additional Working Cash Notes.

In addition, the governor signed House Bill 4036, sponsored by Rep. Elaine Nekritz (D-Des Plaines) and Sen. Dan Kotowski (D-Park Ridge), which authorizes the Suburban Bus Board to borrow money for several bus garage expansion and conversion projects throughout the Chicago suburban area.

A complete list of Illinois Jobs Now! road, rail, and transit projects and the additional City of Chicago projects supported by the state is available at www.dot.state.il.us (or see the attached).

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Tax increases, President Obama PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Wednesday, 11 July 2012 11:53

Tuesday, July 10, 2012

For four years now, we have heard President Obama talk about the need to raise taxes on those earning more than $250,000.  We heard this from him again just yesterday when he spoke in support of increasing taxes on the so-called wealthy.

In his speech yesterday, he made the following points:

·         That those making under $250,000 deserve certainty now.

·         That it’s ok to increase taxes on small business owners making more than $250,000 because those tax increases would affect less than 3 percent of small business owners.

·         That those making more than $250,000 aren’t paying their fair share.

·         That we can’t afford to extend the 2001-2003 bipartisan tax relief measures to these households because of the impact to the deficit.

·         That, if Congress sent him a bill to extend the 2001 bipartisan tax relief just for those making under $250,000, he would sign the bill into law right away.

Well, I rise today to highlight what the President is not telling taxpayers.

First, on the issue of certainty, the President fails to mention what his plans are for the dozens of tax provisions that expired at the end of last year and the dozens more that are expiring at the end of this year. These provisions affect everyone from teachers who dip into their own pockets to purchase school supplies to families and students struggling to pay for higher education.  They also include key incentives for businesses to invest in new equipment and engage in the research needed to produce the products of tomorrow.

He also fails to mention what he would do about the Alternative Minimum Tax that threatens an ever-increasing number of middle class Americans each year.  Over the past several years, legislation was enacted to avert this crisis through a series of “patches” to increase the exemption amount.

Unless an additional patch is signed into law, the AMT will trap 30 million taxpayers this year, or roughly one-fifth of all taxpayers, compared to about 4 million taxpayers last year.

The President also fails to mention whether he continues to support the middle-class tax increases he included in his budget proposal. These include the reinstatement of the Personal Exemption Phase-out and the Pease limitation on itemized deductions.  Additionally, he would impose a new 28 percent limitation on itemized deductions.  Each of these provisions comes with their own income thresholds and phase-out rules that increase complexity and increase taxpayer burden.

Finally, the President fails to mention the tax increases he supported to pay for his health care reform legislation.

These provisions include a bigger haircut on deductions for medical expenses, lower contribution amounts for Flexible Savings Accounts, and taxes on artificial knees and hips that medical device manufacturers will pass on to patients.

Given all of the looming tax increases the President failed to mention in his speech yesterday, it’s difficult to see how extending just the 2001-2003 bipartisan tax relief provides certainty to taxpayers, including small businesses.

The President agrees that they are the job creators and engines of our economy. Unfortunately, he defends his tax increases on small businesses by claiming that the impact will be minimal since only 2 percent to 3 percent of small business would be subject to his tax increase.  What the president fails to mention is that this 2 percent to 3 percent account for a large amount of economic activity and jobs.

According to the non-partisan Joint Committee on Taxation, 53 percent of flow through business income would be subject to the President’s proposed tax increases.  This 2 percent to 3 percent also accounts for about 25 percent of the employment.

The President claims that he wants give the 97 percent of small businesses “a sense of permanence”.  Yet, the tax relief for those in this group is only for another year.

The President continues to claim that we cannot afford to extend tax relief for those earning above $250,000 because of our current deficit situation.  But, he fails to mention any ideas for reducing the deficit by controlling spending or by enacting tax reform, which is the only real way to provide a sense of permanence.

At the start of his Administration, the President established the Simpson-Bowles commission to come up with a framework to address our current out of control spending, as well as reform our tax code.

The Commission issued a report over a year ago that included substantive proposals on how to reform the tax code.  There are some things in the Simpsons-Bowles plan I like and some that I don’t.  I like that it would streamline the tax code, reduce tax rates across the board, broaden the base, and enhance economic opportunity.  At the same time, it violates one of my core tenants for tax reform: that it not increase taxes overall. But, it is at least a serious proposal.

However, the President failed to embrace the Simpson-Bowles plan and offered a token “framework” for corporate tax reform. While the President agrees that our current corporate rate is too high, his framework is overly vague and provides little in the way of simplification.   Instead, as one commentator put it, his proposal simply “rearranges the deck chairs on the Titanic”.

That being said, at least the President took a position on lowering the corporate tax rate to 28 percent.  This is in stark contrast to his ideas for individual tax reform.

Even thinner on details, his overarching principle for individual tax reform seems to be the wealthy should pay their fair share.  Yet, he never defines what rate or amount of tax constitutes fair share for individuals.  Adopting this rhetoric seems to indicate support for using the tax code to reduce income disparity between the highest and lowest taxpayers.

However, data from the non-partisan Congressional Budget Office shows the so-called wealthy already pay the bulk of the taxes and that our tax code is highly progressive.

This chart shows that, if all federal taxes are considered, the top 5 percent of households pay an average effective tax rate of about 28 percent and account for nearly 45 percent of all federal receipts.  In contrast, the bottom 20 percent of households pay an average effective tax rate of about 4 percent and account for less than 1 percent of federal receipts. All federal taxes include individual income, corporate, excise and payroll taxes.

The disparity is even greater when we only consider individual income taxes.  This is actually a better measure since the President proposes to increase just income taxes on the so-called wealthy. If you look at this chart, you will see that the bottom 40 percent of households have an average effective tax rate below zero.  In contrast, the top 5 percent have an average effective tax rate of nearly 18 percent and account for 61 percent of income tax receipts.

I’ve highlighted the top 5 percent on these charts because these are the households generally earning more than $250,000.  In other words, these are the wealthy households according the President.

Looking at these numbers, it’s fair to ask the President to define what he means by “fair share.”  How high is he willing to raise taxes to meet his objective?

I have always stated that taxpayers should pay what they owe – not a penny more, not a penny less.  Anyone who looks at my record will see that I have fought long and hard to shut down loopholes and ensure taxpayers of all incomes pay what they legally owe.  However, I hold a fundamentally different view from the President on how the economy works and what government’s role should be.

I believe that the money a taxpayer earns belongs to that taxpayer, not a pittance the taxpayer may keep based on the good graces of the government. I generally believe individuals have the right to enjoy the fruits of their success.  I believe that the best way to increase the wealth and livelihood of all Americans is through pro-growth policies that increase the size of the economic pie, not by redistributing the pie based on some unspecified definition of “fairness.”

I believe that 18 percent of the gross domestic product of this country is good enough for the government to collect and spend.

This benchmark of 18 percent is what the government has collected consistently regardless of that the statutory tax rate has been.  In other words, just because you raise tax rates on so-called wealthy people does not necessarily mean we will get the influx of revenue some believe we will.

Higher income individuals generally have a greater ability to choose the form of income they will receive.  They also have a greater ability to decide when the will recognize this income, such as through the sale of stock, in a way to limit their taxable income in a given year.  They also have accountants and attorneys to help them legally shield income from the view of the IRS.  As tax rates go up, so does the incentive to reduce income through legal and non-legal means.

I have a chart here that shows annual revenues as a percent of GDP in relation to our top marginal tax rate.  This shows that our annual revenue has remained relatively constant over the years even as the top marginal rate on high-income individuals has fluctuated.

Since post World War II, revenue as a percentage of GDP has averaged right around 18 percent.  This has remained true whether we have had a top marginal rate of 93 percent, 70 percent, 50 percent, 28 percent, or now a 35 percent marginal rate.

What this means is we are not going to be able to tax our way to surpluses.  We are going to have to make substantial adjustments on the spending side to bring it in line with revenues.

History also shows that tax increases just lead to spending increases.  Professor Vedder of Ohio State University has studied tax increases and spending for more than two decades.

His most recent work on this topic, with Stephen Moore of the Wall Street Journal, found that:  “Over the entire post World War II era through 2009, each dollar of new tax revenue has been associated with $1.17 in new spending”.

Another study, this one by the National Bureau of Economic Research, states that when it comes to fiscal adjustments, “those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over Gross Domestic Product ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions.”

So we know that increasing taxes, including on targeted groups, is not going to reduce the deficit.

American workers and businesses deserve tax reform and tax certainty.  There is bipartisan agreement that we need comprehensive tax reform.  What we need is real leadership to get this done.

To be sure, lack of leadership is not because of a lack of interest.  The Senate Finance Committee, of which I am a member, has held more than a dozen tax reform hearings during this Congress alone.  The Senate Budget Committee has also held tax reform hearings.

What has been lacking is presidential leadership.  The President’s speech yesterday was just that – a speech.  As I outlined, he spoke only about extending certain tax relief measures for those earning under $250,000.

However, he failed to address other looming tax increases and failed to discuss how his other tax increase proposals provide the certainty he claims he wants to provide.

It’s easy for the President to engage in election year antics and goad Congress to send him a bill.  Unfortunately, that’s not leadership and such speeches do nothing to help individuals and small businesses.

If the President really was concerned about preventing tax increases on the middle class and small businesses, he would at least be working with leaders in his own party to make sure they all agreed on who the wealthy really are. Democratic leaders in the House and the Senate have signaled that they support extension of the lower income tax rates for those making up to a million dollars. In fact, a year ago this week, here in the Senate, we were debating the majority party’s “Millionaire Tax Resolution.”

So, if the President really wanted Congress to send him a bill that provided certainty to taxpayers, he would make it a priority to get it done.   Unfortunately, he’s too busy traipsing around the country raising money for his reelection.  That is not leadership and certainly is not going to provide timely tax relief to the millions of taxpayers who need it.

Mr. President, I yield the floor.

 
Americans for Prosperity - Iowa Responds to Obama on Taxes PDF Print E-mail
News Releases - Business & Economy
Written by Mark Lucas   
Wednesday, 11 July 2012 11:39

Cedar Rapids, IA - Americans for Prosperity - Iowa issued the following statement in response to President Obama's speech today on taxes:

“The White House continues to play politics instead of trying to fix the economy. It's ironic that the same President who has repeatedly blamed his economic failures on his predecessor and bashed the "Bush tax cuts" now wants to extend those same tax cuts for some Americans. Of course, the greater irony is that he is hiking taxes for millions of middle class Americans with the new health care law.

Obama's strategy of one foot on the gas, one foot on the brake, will never get our economy moving. We need real, permanent tax relief for all Iowans.”

Americans for Prosperity (AFP) is a nationwide organization of citizen-leaders committed to advancing every individual’s right to economic freedom and opportunity. AFP believes reducing the size and intrusiveness of government is the best way to promote individual productivity and prosperity for all Americans. Americans for Prosperity does not support or oppose candidates for public office. For more information, visit www.americansforprosperity.org

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Illinois Revenue & Jobs Alliance letter to Gov. Quinn PDF Print E-mail
News Releases - Business & Economy
Written by Illinois Revenue and Jobs Alliance   
Tuesday, 10 July 2012 11:17

 
PFGBest Questions PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Tuesday, 10 July 2012 11:16
Tuesday, July 10, 2012

Senator Chuck Grassley made the comment below after customer accounts at PFGBest, a futures broker, were frozen yesterday due to possible accounting irregularities.

Last year, Senator Grassley participated in oversight hearings of the Senate Agriculture Committee seeking information and accountability for the loss of up to $1.2 billion in MF Global customer funds, including money from Iowa farmers, grain coops and brokers.

Grassley comment:

“Whether there is an issue with segregated customer accounts, or it’s something else, PFGBest served a lot of Iowa customers who are going to have questions about how this is going to affect their accounts.

“From a systemic standpoint, the question is whether there is effective oversight in our commodity trading system.  People need to have confidence in our commodity trading system in order for it to work for farmers and investors the way it’s intended.  I want to know if the existing set up with the National Futures Association and the Commodity Futures Trade Association is working to safeguard this marketplace.  Regulators need to be on the ground working diligently to sort out what's going on, and I would expect the Senate Agriculture Committee to look into this matter in the same way it continues looking into MF Global.”

 
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