As punishing as it feels to write a check at tax time it is especially painful in Illinois, where raising taxes, fees, and penalties has constructed an elaborate taxpayer prison giving individuals and businesses little choice but to leave.
Tax dollars in Illinois don’t seem to make anything better and raising taxes like we did in 2011 doesn’t lessen the debt burden enough to notice. Instead, taxpayers continue to be forced to pay through the nose while Pat Quinn and state Democrats hatch plans to expand their taxpayer prison’s walls.
Raising taxes in Illinois to pay for what?
Will Illinois pay off $5 billion in old unpaid bills with our tax dollars? Does raising taxes in Illinois mean we don’t have to worry about pension debt? Will keeping Pat Quinn’s temporary income tax increase on the books forever make our debt go away? No, no, and no.
The wish list in Quinn’s January 2014 State of the State Address was daunting for a state with no money, so some of it was placed on the backs of employers. Beleaguered state businesses heard a plea to raise the wages paid to their employees and a call for mandatory sick time.
In the budget speech that followed in March, Quinn placed a $500 property tax refund on the table. Chicago Mayor Rahm Emanuel already has plans to tax away part of that refund from city taxpayers with a property tax increase* as he tries to salvage two of his city’s pension funds. Property owners in Chicago and Cook County are used to being squeezed for property taxes, but those with higher incomes now have to listen to Mike Madigan’s plan for raising taxes again with a constitutional amendment adding a 3% millionaire’s surcharge.
When Barack Obama slammed proponents of extending the Bush tax rates he called it a tax increase. When Pat Quinn talks about reneging on the promise of a temporary income tax increase he calls it maintaining the current tax rates. You can figure that one out while you navigate the fines, fees, and penalties that are another side of raising taxes in Illinois.
Look out! Illinois is a taxpayer prison you can’t escape.
Illinois threatens taxpayers the moment they leave their houses in the morning, assuming they have jobs. We’ll get to that in a moment.
Before motorists get to work they have to think about red light cameras, speed cameras, and signs warning of $375 construction zone fines enforced by – you guessed it – cameras. More signs threaten $10,000 penalties and prison time for injuring a highway worker. Violating Illinois’ Move Over law can cost you $10,000 and a 3-month loss of your driver’s license for not changing lanes when you approach a stopped emergency vehicle. Need more?
If you make it to work unscathed and go out to lunch, look forward to paying some of the highest sales tax rates in the nation if your job is in destitute Chicago. Don’t drink or smoke or visit a casino during your lunch hour because sin taxes are a big haul for the state. Besides, you already paid too much for your meal because of the taxes at the restaurant. If you bring your lunch and want something to drink, there is a bottled water tax waiting for you.
Federal spending for Illinois means raising taxes everywhere.
While Illinois antagonized businesses with new ways to raise their operating and employment costs, Democrats on Capitol Hill warned that we need to support the state’s unemployed:
If Congress fails to extend the federal Emergency Unemployment Compensation program almost 82,000 people in Illinois will lose their insurance coverage immediately on Dec. 28, according to the Illinois Department of Employment Security. An additional 89,100 people in Illinois will lose their coverage in the first six months of 2014 if Republicans continue to block an extension of the program, according to Department of Labor estimates.¹
Cook County has 38,250 residents on the unemployment insurance rolls.² This makes food stamps and Medicaid vital to keeping the state afloat because taxpayers with no money to spare can’t pay fees and taxes. Worse, raising taxes on thousands of unemployed is a waste of effort. Fortunately, the Center for Medicare and Medicaid Services helped cheer on Illinois’ early adoption of an administrative transfer strategy that uses food stamp data to help grow the number of state Medicaid recipients:
To implement the strategy, beginning in October 2013, states sent letters to SNAP participants and parents of children in Medicaid encouraging them to “enroll today for health coverage starting January 1, 2014.”³
Illinois won’t be talking about raising taxes to pay for its share of the Medicaid expansion for a few years, so for the time being the tab will be added to our federal tax bills.
Tax time in Illinois: You Owe $25,000.
The irresponsible tax and spend brainstorming we hear from Illinois Democrats in Washington was put in perspective by House Republican Randy Hultgren:
Our nation faces a massive debt crisis, as our debt surpasses $17.5 trillion, or around $55,000 per person. And that’s not to mention my home state of Illinois’s debt of almost $25,000 per person.4
That’s a pretty hefty tax bill and we all know who will pay, whether from raising taxes in Illinois, being fleeced for bailout money and public assistance by Uncle Sam, or coughing up for a growing list of fines and penalties.
While Illinois celebrates jobs created by reopening the prison in Thomson, Illinois, no one is talking about the much larger prison that is busy killing jobs in our state, the jail Illinois officials have constructed for unlucky taxpayers foolish enough to stay here.
*UPDATE April 7, 2014: Today Mayor Rahm Emanuel’s property tax hike was removed from the pension bill in Springfield. That doesn’t mean Chicago property taxes won’t go up. It means the Chicago City Council, not state lawmakers, will have to take the responsibility and heat for the decision.
UPDATE September 19, 2016: City residents unhappy after being socked with a property tax increase that showed up in tax bills over the summer just got whacked with a new water bill tax to shore up the pension fund for city workers. The bad news isn’t the tax increases. It’s that the fun isn’t over yet.