Illinois House overrides Rauner vetoes of income tax increase, budget

Discussion in 'Politics, Religion, Social Issues' started by dogslobber, Jul 6, 2017.

  1. dogslobber macrumors 68020

    dogslobber

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    #1
  2. Dmunjal macrumors 65816

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    Won't people leave Illinois like they have been the last few years? Especially the higher income earners. That will actually shrink the tax base. This is a side effect of higher taxes. It's called Hauser's Law.

    https://en.m.wikipedia.org/wiki/Hauser's_law
     
  3. eltoslightfoot macrumors regular

    eltoslightfoot

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    In my econ classes, I would see this as the Laffer Curve, but it's a similar idea.
     
  4. Dmunjal macrumors 65816

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    Yes, that's another way to look at it. Higher tax rates don't always equate to higher tax revenue.
     
  5. ucfgrad93 macrumors P6

    ucfgrad93

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    #5
    Sounds like you are saying that governments should be given a blank check for whatever they want.
     
  6. Dmunjal macrumors 65816

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  7. TonyC28 macrumors 65816

    TonyC28

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    I really wish people would pay closer attention to what is going on my state (Illinois). It's so easy to say raising taxes is the obvious choice but you really have to see what goes on here to truly understand. They will squander any extra revenue on garbage. Pension debts will continue to grow along with other liabilities. People and businesses will continue to leave the state. Mike Madigan and Rahm Emanuel, the true leaders of this state, think they can tax their way out of the mess but that won't work as long as people keep leaving. Yes, Illinois does have a fairly low income tax compared to other states, but it's not the extra tax we are complaining about. It's the fact that we citizens KNOW this will not help because their massive overspending will always cancel it out. And I know I'll be back on this thread in a year or two when they raise taxes even more.
     
  8. Eraserhead macrumors G4

    Eraserhead

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    That only happens when taxes are very high though...
     
  9. blackfox macrumors 65816

    blackfox

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    #9
    Well, the laffer curve is a joke:
    https://www.theguardian.com/commentisfree/2012/jun/27/laffer-curve-tax-cuts-rich-funny
    Tony points out a more relevant point - how will however much revenue be spent? There are hard choices for the State of Illinois - we'll see if anyone in Governance there has the balls to meet them honestly and head-on. Still, this tax increase was a no-brainer - Illinois was in danger of having a junk credit rating, not being able to fund the lotteries, it's pensions, and possibly having it's Universities lose accreditation. Where from here though? We'll see...
     
  10. Plutonius macrumors 603

    Plutonius

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    Bankruptcy.

    I'm a firm believer in states rights but also believe that the Feds should not bail them out when the states do a poor job.
     
  11. s2mikey macrumors 68020

    s2mikey

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    #11
    Yeah - great...what "services"? Overpaid, bloated employee union thugs getting to keep their cushy jobs? making sure those obnoxious pensions get funded? Yeah, terrific. That does a LOT of good for the privately employed people or business owners. Sounds like your the type that LOVES handing over your earned money for others to spend as they see fit.

    Unbelievable.
     
  12. Dmunjal macrumors 65816

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    The Laffer Curve is so easy to understand and of course it makes sense. It says nothing about tax cuts for the rich. It says that tax revenue is zero at 0% tax rates (right?) and at 100% tax rates (since no one will work or go black market. The Laffer Curve says that there is an optimal number somewhere in between. That's it.
     
  13. Eraserhead macrumors G4

    Eraserhead

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    #13
    Probably 50%.
     
  14. Dmunjal macrumors 65816

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    As I posted earlier about Hauser's Law, empirical evidence over decades says the the number is closer to 20%.
     
  15. eltoslightfoot, Jul 7, 2017
    Last edited: Jul 7, 2017

    eltoslightfoot macrumors regular

    eltoslightfoot

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    According to one writer for the Guardian the Laffer Curve is a joke, in graduate schools it isn't seen as so. Moreover, as pointed out by Dmunjal, the basic concept is irrefutable. If I tax my citizens at 80% while neighboring states tax at 20%, what do you think will happen, and try not to use the Laffer Curve to explain it. Then look up what is happening in CA and TX.
     
  16. VulchR macrumors 68020

    VulchR

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    The solution is not to deprive public workers of fair pay and benefits, It is to provide them to everybody. Not everybody who is wealthy earned it, and not everybody who is poor made bad decisions. You cite cushy public jobs with 'obnoxious' pensions (how can a pension be obnoxious, anyway?) - care to provide documented examples?

    EDIT: FWIW the way to get around the issue of people moving states to avoid taxes is to make federal taxes higher and distribute the resulting revenue to the states on the basis of need.
     
  17. TonyC28 macrumors 65816

    TonyC28

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    Make federal taxes higher on everyone across the board? Or just certain people?
     
  18. Eraserhead macrumors G4

    Eraserhead

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    Maybe we need to step up enforcement.

    Besides it's ********. The US government is 35% of GDP. The French one is over 50%.
     
  19. eltoslightfoot macrumors regular

    eltoslightfoot

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    It will never work that way. Federal whims would determine need differently. Also it would require more federal control as some states, like TX and SD for instance are much better at running their states. Why should they be punished for being more disciplined and diligent? Either way nobody wants it to work that way Federally, so it simply won't work. States need to get their acts together.
     
  20. VulchR macrumors 68020

    VulchR

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    Progressive taxes on rich people. Besides, the federal government has been subsidising states one way or another for a very long time. It'd just be nice if for once this financial aid it wasn't a collection of pork-barrel projects, but an infrastructure and public services package that makes sure everybody has decent housing, access to education, and basic public services.
     
  21. Eraserhead macrumors G4

    Eraserhead

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    Texas is barely a net tax contributor even with its vast oil wealth. Pathetic.
     
  22. Dmunjal macrumors 65816

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    #22
    It was 18% in 2016.

    https://fred.stlouisfed.org/series/FYFRGDA188S

    You can go higher but you kill GDP growth. As we learned the last eight years with a pathetic 1.2% average GDP growth. European countries haven't had decent growth in a long time.
     
  23. VulchR macrumors 68020

    VulchR

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    #23
    Sorry but as a scientist I have to ask: How do you quantify or demonstrate that one state is run 'better' than another? There's a boatload of confounding variables that would make any claim about a state being run 'better' almost impossible to prove. Quite apart from anything, states vary in the natural resources they have, the levels of historical poverty etc. And, as I said, the states already get handouts from the federal government in one way or another.
     
  24. BeeGood macrumors 68000

    BeeGood

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    Uh...no?

    Illinois state gov spending is absolutely out of control, and you're saying that it's an "issue" when people decide they're tired of getting fleeced and having their tax dollars wasted?

    Listen, if you're happy with allowing state-level bureaucrats to waste you're hard earned money on things that are totally unnecessary, then by all means move to or stay in IL and fork it over. But don't deprive others of the choice to protect their assets by moving to a different state that isn't run by idiots.

    http://www.wsiltv.com/story/35828793/illinois-budget-loaded-with-pork
     
  25. Eraserhead macrumors G4

    Eraserhead

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    #25
    Plus state and local spending.
     

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