Archive for the ‘Illinois’ Category

Illinois Casino Expansion Bill Vetoed

Tuesday, August 28th, 2012

Governor Pat Quinn (D) vetoed a casino expansion bill that would have added five casinos, including one in Chicago. His veto message stated that the biggest problem with the bill, “[I]s the absence of strict ethical standards and comprehensive regulatory oversight. Illinois should never settle for a gaming bill that includes loopholes for mobsters.” Governor Quinn promised a veto of a similar bill in 2011; that bill did not pass the Illinois legislature.

Illinois is still facing a massive budget deficit (the state is months behind in paying its bills), so casinos were one of the means that some legislators were looking at for balancing the budget.

An override in Illinois takes a 3/5 vote of both houses of the state legislature. There will be a lame duck session of the Illinois legislature following the November election.

Illinois Adopts Strip Club Tax

Sunday, August 19th, 2012

Back in May I posted about Illinois’ proposed strip club tax. We can now remove ‘proposed’ as the tax was signed into law; the tax goes into effect on January 1st.

The tax of $3 per patron will go to support Illinois’ 33 rape crisis centers. I’m not opposed to funding of rape crisis centers (on the contrary, they’re necessary). What I don’t like at all are “sin” taxes — taxing activities that legislators don’t like. All taxes are passed onto consumers — all of them. While the goal of this tax is quite laudable, it will likely cut patronage. As Alan Greenspan said, “Whatever you tax, you get less of.”

What Raising Taxes Accomplishes

Sunday, August 12th, 2012

I grew up just outside of Chicago in Lincolnwood, Illinois. Last year the Land of Lincoln passed a huge tax increase. Personal income taxes increased by 66% (from a 3% rate to 5%); the corporate tax rate was also dramatically raised. Did the extra $7 billion fix the problems?

No.

The budget deficit increased to $5 billion from $4.6 billion, and over $8.3 billion of bills haven’t been paid. Why didn’t increasing the tax rate fix the problem? Because the big issue is the spending of money, not the revenues to the state.

Illinois pension costs are mammoth, but pension are sacrosanct to Democrats in Illinois’ legislature. Bluntly, pensions in Illinois and elsewhere are going to have to be cut; there just isn’t the money to pay for them. And things will likely continue to worsen until the actual cause of the problem is addressed.

Illinois isn’t the only state facing these issues. In Hermosa Beach, California (near Los Angeles) meter maids make nearly $100,000 a year. The chief of police doesn’t want to privatize the service because, “When you outsource, you take away union jobs.” Perhaps Hermosa Beach wants to join Stockton, Mammoth Lakes, and San Bernardino in Chapter 9.

Meanwhile, a committee in the California Assembly approved $100 million for film credits. California voters may wish to remember this when they vote on Governor Brown’s tax increases this fall. (For the record, the film credit passed unanimously. The measure still must pass the full Assembly and the State Senate.)

If you’re a resident of California or Illinois let your elected officials know what you think about this. And if you don’t like the answers you receive, remember that there’s an election in less than three months. It’s the only way that change is going to happen.

I’m Shocked! A Strip Club Owner Is “Appalled” by Proposed Strip Club Tax

Sunday, May 20th, 2012

Illinois is debating a tax on strip clubs. I’m shocked, just shocked to find that Al Zuccarini, owner of Big Al’s in Peoria (an adult entertainment facility–a strip club) opposes a proposed tax on strip clubs. First, we honor Mr. Zuccarini with the Captain Louis Renault Award:

Seriously, Mr. Zuccarini has a point. The tax (now down to $3 per customer from the originally proposed $5) is supposed to fund rape crisis centers in Illinois. Mr. Zuccarini told the Peoria Journal-Star,

“My counterparts (other club owners) might think the reduction is a win,” he said. “I don’t think it’s a win. If it’s $25,000 one year, what’s it going to be next year when money is short – $40,000? Where does it stop?”

That is a good point. Excessive taxing of small businesses is a huge hindrance to job growth. Perhaps Illinois should study the example of what’s happened in California. Then again, maybe that’s exactly what Illinois is doing.

A Poll Tax–No, That’s a Pole Tax in Illinois?

Thursday, February 16th, 2012

Leave it to the Land of Lincoln for an inventive way to raise money. Illiniois State Senator Toi Hutchinson (D-Olympia Fields) is sponsoring a $5 per person pole tax. The tax would impact strip clubs. The strip clubs are not amused. The Chicago Tribune reports:

We wouldn’t want that,” said Tiffany Winkler, manager of the Chicago club Pink Monkey.

The Admiral Theatre is “strongly opposed to the proposed pole tax,” said Sam Cecola, the North Side club’s director of operations.

I remember that Texas implemented a similar pole tax; the Texas Supreme Court ruled it constitutional though the case is still being litigated. Expect a similar battle if Illinois moves toward a pole tax.

Illinois: Proving Laffer Correct

Sunday, January 22nd, 2012

Arthur Laffer popularized the Laffer curve. The father of Supply Side Economics noted that in many cases, increasing the tax rate decreases the amount of tax revenues. It appears that Illinois is proving Dr. Laffer correct.

Moody’s just downgraded Illinois’ bond rating to A2 from A1. Illinois now has the worst rating of all 50 states–even worse than California. But wait: Didn’t Illinois pass a massive tax increase a year ago? Wasn’t that supposed to help Illinois’ financial condition? Here’s how the Wall Street Journal put it:

So much for that. In its downgrade statement, Moody’s panned Illinois lawmakers for “a legislative session in which the state took no steps to implement lasting solutions to its severe pension underfunding or to its chronic bill payment delays.” An analysis by Bloomberg finds that the assets in the pension fund will only cover “45% of projected liabilities, the least of any state.” And—no surprise—in part because the tax increases have caused companies to leave Illinois, the state budget office confesses that as of this month the state still has $6.8 billion in unpaid bills and unaddressed obligations.

There is some good news for Illinois. Governor Jerry Brown and other California Democrats are proposing a variety of tax increases for the Bronze Golden State (to be voted on in this fall’s election). It may well be that California will pass Illinois to the #1 spot.

Hat Tip: HotAir

Illinois Mayor Sentenced for Not Filing Tax Returns

Wednesday, January 18th, 2012

Joseph Cook has been the mayor of Channahon, Illinois since 2003 (Channahon is southwest of Chicago). Given Illinois politics, he has likely helped his reelection campaign by admitting he committed a crime. He was sentenced yesterday to two years probation and must make restitution of $15,000 to the US Treasury.

According to the Chicago Tribune,
this isn’t Mr. Cook’s first brush with financial trouble. He’s been sued by Illinois for child support, and faced four other lawsuits over financial issues. As I said, it’s just another day in politics in the Land of Lincoln.

Illinois Couples in Civil Unions Will File Married Returns in 2011

Thursday, December 1st, 2011

Illinois couple who are in civil unions will file married returns for 2011. They will, for state tax purposes only, file either married filing jointly or married filing separately. Note that they will still file single returns for their federal taxes.

While this may be a beneficial result, it will likely also be a more expensive situation for such couples. Tax professionals will have to prepare two separate returns: A single return for federal tax purposes, and then a joint (or married filing separately) return for state purposes. Impacted individuals should expect that the cost will increase because such returns will take more time to prepare.

Will Chicago Get a New Casino?

Thursday, September 15th, 2011

Illinois Governor Pat Quinn is not happy about proposed legislation that would add five casinos in Illinois. One of these would be in Chicago.

Among his complaints are that it would harm education, increase corruption, lower oversight, and add to organized crime. Included in the legislation would be a lowering of tax rates (the current tax on casinos is between 15 and 50 percent) to a maximum of 20, 30 or 40 percent.

Meanwhile, Illinois politicians and the governor (all Democrats) are playing a game of political chicken. While proponents trumpet the possible new revenues (potentially $1 billion from a Chicago casino) it looks as if this legislation may never get out of the Illinois legislature.

I’m Shocked to Find that Record Tax Increases Impact Job Losses

Thursday, September 1st, 2011

I hope you detected the sarcasm in the headline. The Illinois Policy Institute reports that following the record tax increase in Illinois, Illinois lost more jobs in July than any other state.

There’s a wonderful chart in the article:

You don’t even need to see the spot marked “Tax Hike Enacted” to know that something changed drastically. True, the economy has gotten worse, but taxes matter. That’s true in Springfield as well as Sacramento…but it’s a lesson that politicians keep forgetting.

Hat Tip: Mish’s Blog

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