Bad news for city dwellers.

[greatauntoftriplets]

Between Daley's enormous tax hikes

http://www.chicagotribune.com/news/local/chi-budget11oct11,1,978436.story

and the CTA's doomsday scenario

http://www.chicagotribune.com/news/local/chi-transit_weboct11,1,7761078.story

living in the city is going to become even more expensive and inconvenient.

What does everyone think about all this?

[JoDog]

1. Don't forget

The proposed Cook County tax hikes. Although it sounds like the County Board is close to a full rebellion against Stroger.

[ieoeja]

2. Lost revenue from fed income tax cuts, inflation and recession.

Can't do anything about inflation and recession. And Blagojevich (my worst. vote. ever.) refuses to touch income taxes. So everyone up the political ladder is letting the shit roll downhill to the county and city which don't want to get into income tax collection. Which leaves us with only regressive tax options.

If *I* was governer, I would spin this as ... when Bush and the other Republicans in Washington removed dividends from the federal income tax COMPLETELY they must have intended that potential tax revenue for the states instead. So Illinois should tax unearned dividend income at the federal income tax level each federal taxpayer currently pays on income they earned. You're in the 33% federal tax bracket for wages? Then you pay 33% taxes on dividends directly to the state of Illinois bypassing Washington.

And write this law as "federal earned income tax rate minus unearned income tax rate". Should the federal gov't return to taxing unearned income then the Illinois tax on that income will decrease by exactly the rate the federal gov't increases it. In fact, should the feds start taxing unearned income at a higher rate than earned income, then the state will actually rebate the excess federal tax to the dividend recipients. Which is why I call this plan...

PROTECTION FROM EXCESSIVE TAXATION TOWARDS YOUR DIVIDENDS (P.R.E.T.T.Y DIVIDENDS)


Of course, the odds of the federal gov't ever taxing unearned income at a higher rate than that paid by we working class chumps is non-existent. So there isn't much chance of this happening. But it is a nice way to market it. Should that impossiblity ever happen then we could always revisit the legislation.

I have no idea what this would mean to the state budget. Governor could call up the state Revenue Department and have them run the numbers. It could be substantial.

I would be more reluctant to make up the tax difference between capital gains and earned income. With capital gains the investor is running a risk while helping to fuel the economy. Dividends come only from the safest investments possible.

[dogman]

3. The Gov had a tax proposal.

It was rejected because it would have been an across the board flat sales tax. The bi-partisan majority would rather raise income taxes to take from the working class.