QUOTE OF THE DAY
Crain’s: After the Madigan proposal, what does Quinn say about taxes?
I had planned to write this column about Gov. Pat Quinn. He has a big speech set for Wednesday, March 26, when he unveils his new budget and tax plans. It’s a great chance for a man who is facing a tough re-election campaign to go on the offensive against mega-bucks GOP nominee Bruce Rauner.
I still think Mr. Quinn has an opportunity to move electoral numbers his way, if he can show himself to be more than the usual tax-and-spend Democratic liberal. But just as I was getting ready to write, the guy who’s the real master of Springfield moved to seize control of the tax issue himself.
That would be Michael Madigan, the powerful—I think it’s illegal in Illinois to publish the name Madigan without adding the adjective “powerful”—speaker of the Illinois House of Representatives. Governors come and go, and election seasons bloom and wither into history. Mr. Madigan stays, and his proposal to have voters mandate a 3 percent income-tax surcharge on millionaires while voting on Nov. 4 for legislative candidates immediately pre-empted much of the tax- revision agenda.
Chicago Tribune: The lingering curse of Gov. Quinn’s income tax hike
At noon Wednesday, Gov. Pat Quinn will propose a state budget for the fiscal year that starts July 1. Problem already — unless, that is, you’re a taxpayer: Illinois law dictates that the income tax increase Quinn engineered in 2011 diminish (not disappear) on Jan. 1. You’ll pay less of that 67 percent personal tax hike. And the pols in Springfield will have less to spend.
Horrified by that prospect, most Democratic and some Republican legislators are mulling what to do. Among Quinn’s many options: He could propose extending much or all of the current tax rates. He could propose raising today’s rates. He could propose offsetting the lost revenue by amending the Illinois Constitution to replace today’s flat rates with graduated rates that rise with income.
He could even sing a Beatles classic (“… Whisper words of wisdom, let it be …”) in a duet with his campaign foe, Republican candidate for governor Bruce Rauner: Quinn could propose that Illinois let tax rates fall as scheduled, and reduce spending accordingly. Except Quinn would surely add: “I don’t want to make these draconian cuts, and neither should you. But if we don’t raise taxes. …”
The American: The Proper Size of Government
President Obama has frequently cited the seemingly intractable debate about the size of government currently consuming the political class as his primary obstacle to getting major reforms through a divided Congress.
For example, he recently said:
For several years now, this town has been consumed by a rancorous argument over the proper size of the federal government. It’s an important debate — one that dates back to our very founding. But when that debate prevents us from carrying out even the most basic functions of our democracy — when our differences shut down government or threaten the full faith and credit of the United States — then we are not doing right by the American people.
Let’s look at the facts to help resolve this debate. A large body of empirical research has examined the relationship between the size of government and economic outcomes, and based on that research, the United States has much room to scale back. In addition, and close to home, Canada’s recent experience with government retrenchment is an example of a country shrinking government without a trade-off in economic and social outcomes. In fact, a smaller government could achieve better outcomes for the American people.
Reason: Death to the Federal Gas Tax
The notion that U.S. infrastructure is crumbling and underfunded has been common lately, and more such news came in February, when the Department of Transportation (DOT)announced that the Federal Highway Trust Fund could soon run out. This spurred debate about what to do with the trust’s main funding source, the federal gas tax. Some legislators have long wanted to raise this tax, and President Obama recently proposed his own $302 billion funding plan. But one Congressman, Georgia Republican Tom Graves, has a better idea: nearly abolish the gas tax altogether.
Last November, Graves introduced the Transportation Empowerment Act, which was cosponsored through Senate legislation by Republican Mike Lee. By drastically reducing the tax, it would enable states to manage their own transportation policies, improving a process that has become massively inefficient under federal oversight.
“It’s rather silly,” Graves told the Atlanta Journal-Constitution, that “taxpayers pay taxes at the pump that go to the federal government, [which] then tells our state how it must spend the money,” even though it doesn’t “give you all the money you submitted.”
Chicago Tribune: Insurers see double-digit Obamacare price rises in many states next year
U.S. consumers eligible for Obamacare health plans could see double-digit price hikes next year in states that fail to draw large numbers of enrollees for 2014, including some states that have been hostile to the healthcare law, according to insurance industry officials and analysts.
The early estimates come as insurance companies set out to design plans they intend to sell in 2015 through the state-based health insurance marketplaces that are a centerpiece of the Affordable Care Act, President Barack Obama’s signature domestic policy achievement that is widely referred to as Obamacare.
WellPoint Inc, which sells plans on 14 Obamacare exchanges, expects health insurance rates nationwide to be higher. Increases for the Obamacare market that has signed up about 5 million people to date is expected to outpace those in the employer-sponsored market, which serves about 170 million people.
Points and Figures: Would Ending The Corporate Income Tax Decrease Income Inequality?
Income inequality is a hot topic. In Illinois, the Democrats are trying to use it as a wedge issue against Republican gubernatorial candidate Bruce Rauner. In fact, the first two salvos out of the box were a movement to raise minimum wage, and a millionaires tax. Illinois passed a hike in corporate income taxes three years ago.
This isn’t just about Illinois. It’s about the entire country.
Some well respected economists ran a study. They built a model, and made the corporate income tax ZERO. The data on their model spit out and they analyzed it. Here is what they found.
CARTOON OF THE DAY
