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items tagged with taxation

Illinois’ Taxes Not Highest in Midwest
Written By: Jeff Ignatius
Section: Commentary/Politics

Category: Letters to the Editor

2015-10-23 15:03:42

Which state has the highest taxes in the Midwest? Not Illinois, that’s for sure.

The Illinois Policy Institute is claiming otherwise, citing “new research.” But that research was actually based on tax collections from Fiscal Year 2013, when the Illinois state income-tax rate was 5 percent. Today – in Fiscal Year 2016, more than two years later – the state income tax rate has dropped to 3.75 percent. So if you look at tax collections in the first six months of this year, under the new rate, Illinois’ state tax collections come out to $1,597 per person – more than $60 lower than Wisconsin’s $1,661. That’s just a fact.

Beyond that basic inaccuracy, that letter simply ignored some fundamental facts about state taxes – the first being that comparing state tax burdens is like trying to compare apples and mashed potatoes.

Take Indiana. Its income-tax rate is a flat 3.3 percent – which looks pretty good next to Illinois, right? But in Indiana, almost every county imposes its own income tax – which can range up to almost 3 percent, for a total income tax rate of 6.3 percent. That’s a whopping 68 percent higher than Illinois!

And while it’s true that people in Illinois pay more in income taxes, per person, than people in Missouri, there’s a very good reason for that: We make more money. The average per-capita income in Illinois is $29,666 – above the national average, and substantially higher than the Missouri per-capita income of $25,649. So if you want to move to Missouri and pay less, remember that’s because you’re likely to make less.

Then there’s the huge issue of comparing Illinois’ regressive flat income-tax rate with our neighboring states’ progressive rates. In Wisconsin, people in the highest income bracket pay a top rate of 7.65 percent. Iowans pay almost 9 percent on taxable income over $68,000. And people in Minnesota pay a hefty 9.85 percent on taxable income of $154,951 and above.

Here’s the real point: When you start cherry-picking statistics on state tax rates, you can prove just about anything you want. The real task is figuring out the best, fairest way for a state government to raise the revenues necessary to pay for the services that its people demand. And you can’t develop smart, effective tax policy based on a misleading, simplistic, and out-of-date chart.

But if you could, I’d choose one from the Tax Foundation (that same place the Illinois Policy Institute cited) that ranked the combined state and local tax burden in every state. Illinois comes in at number 13 – compared with Wisconsin, which had the fifth-highest tax burden in the nation.

Elizabeth Austin, Vice President for Policy & Communications
Innovation Illinois

Electric Vehicles Should Pay Their Fair Share
Written By: Jeff Ignatius
Section: Commentary/Politics

Category: Letters to the Editor

2015-04-09 14:34:07

After reading your article about Iowa’s gas tax, I thought of one thing the article never mentioned. If the tax shortfall is bad now, it will get even worse as electric cars such as the Chevrolet Volt and Nissan Leaf gain in popularity. I feel that the owners of these vehicles are cheating the state, as well as those who own gasoline-powered vehicles.

Instead of tax breaks, electric-vehicle owners should pay a surcharge on their registration. This way, everybody will pay their fair share of maintaining the infrastructure, as I have done with every car I’ve owned since 1972.

Pete Hess

A Band-Aid for Roads: Iowa’s Gas-Tax Hike Is a Short-Term Fix for a Long-Term Problem
Written By: Jeff Ignatius
Section: News/Features

Category: Feature Stories

2015-03-12 21:07:47

When Iowa’s motor-fuel tax increased by 10 cents a gallon on March 1, it represented a road that was both brave and opportunistic.

It was also stupid, for two key reasons: Raising the gas tax doesn’t fully address the funding need for critical road improvements, and over time it will provide less and less money while road-construction costs continue to increase.

Despite that, the hike was still brave, because raising taxes is never popular among voters – especially when they feel the pain every time they visit the gas pump. The Des Moines Register has polled Iowans about a gas-tax hike for the past five years. While the amount of the hike in the question has varied over the years, opposition to an increase was 70 percent in 2011. Opposition has eroded since then, but it was still 58 percent in February 2014.

Which leads us to opportunistic. Mirroring national trends, from July 2014 to early 2015 gas prices dropped from more than $3.50 per gallon in the Quad Cities and Des Moines to under $2, according to

Prices have risen since then but are still more than a dollar cheaper than in mid-2014, so legislators saw a window of opportunity. The February 2015 Des Moines Register poll found 48 percent support for a 10-cent gas-tax hike and only 50 percent opposition – and the cost of fuel was certainly a factor in that shift.

The timing was great in political terms, too, just after a statewide-election cycle. The problem of deteriorating roads and bridges – and the choice for a solution – had been on the table since late 2011, but there’s nothing like the longest period of time before an election to spur legislators into unpopular action.

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Ted Rall: Budget Hero
Written By: Jeff Ignatius
Section: Lifestyle

Category: Ted Rall

2011-07-27 11:24:20

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