Taxes

Illinois Lawmakers to Millionaires: Get Out!

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Burning cash
Images of Money Foter CC BY

In what appears to be part of a full-fledged class warfare strategy that includes comparing Republican gubernatorial candidate Bruce Rauner to C. Montgomery Burns of The Simpsons, Illinois Democrats propose a referendum on imposing a "millionaires tax" targeted at high-income state residents. In a state that has already enjoyed government credit downgrades with little expectation of improvement for poor habits, including putting off paying its bills into the murky future and not funding public pensions, the move could raise fears that politicians plan to resolve their own failures by mugging anybody with assets to speak of (not that it's easy to accumulate assets in Illinois). It just could send the targets of the millionaires tax heading for the exits, as they've already done in New Jersey.

Earlier this year, financial firm RegentAtlantic reported that New Jersey is suffering a net loss of taxpayers and adjusted gross income to lower-tax states, and that "the average income coming into New Jersey is approximately 50 percent less than the income that is leaving." Overall, the company found that the state lost taxable income of $5.5 billion in 2010 as residents moved to relative tax havens.

Note that New Jersey ranks at 44 out of 51 jurisdictions in WalletHub's recent ratings of tax burdens (1 is the least burdensome). Illinois comes in at 47.

By contrast with New Jersey, Stanford University reports that high tax rates don't drive the highest earners to flee California. But Illinois doesn't quite have California's natural attractions, for which wealthy people may be willing to pay a premium.

And California is still hemorrhaging money and people as many seek tax relief and opportunity, even if millionaires are willing to stick around for the nice views. If Illinois can't find itself some redwoods and pretty coastline, and quick, look for a line at the exits.

NEXT: Steven Greenhut Says Anti-Pot Rhetoric Out of Step With California Voters

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    1. ProLib, why did you resign?

      1. I am not a number; I am a free man!

        1. HAHAHAHAHAHAHAHAHA!!!!!

  1. All your tax payers belong to us now!
    /stirs ice in rye while floating in pool in March while looking smug while wearing top hat and monocle swimming google.

    1. Damn monocle goggle. The joke is ruined.
      /splashes water angrily

    2. This would be like Florida doubling the hotel tax in a down tourism year to “make up” for their losses.

      1. I saw FL was the 4th least tax burdensome state and yet we manage to pay our bills. Funny that.

        http://www.tampabay.com/news/b…..ng/2122647

        Also if you don’t pay unemployment benefits, people get jobs. Crazy.

      2. A few years ago DRPA raised the toll on the Ben Franklin Bridge because not enough people were using it.

        1. *facepalm*

  2. “No, fuck you, cut spending”?

    1. “No, fuck you, from each according to his ability, to us according to our greed.”

  3. I guess they can kiss the Bulls, Cubs, White Sox, Blackhawks or Bears signing any significant free agents goodbye. California has hurt itself with its millionaire tax but it is still warm and beautiful. Chicago is neither. If they are going to have California like tax rates, why would any professional athlete with a choice go there? The place is Cleveland with a slightly cleaner lake.

    I really hope you continue to see professional athletes migrate to lower tax states. The populations of these places will never understand other millionaires leaving. But leave their sports franchise unable to attract free agents and they might start to get it.

    1. I wonder what this will do to the Cubbies chance to win the World Series…

      1. It will have no effect whatsoever.

      2. #DIV/0!

    2. Dude, it ain’t Cleveland. We have some of the best architecture in the country.

      1. The place is Cleveland with a slightly cleaner lake…and nice buildings.

      2. So does Buffalo and Detroit. No kidding. I am a Midwesterner and have a soft spot for Chicago. It is like a more manageable New York only with fewer assholes. But the climate sucks and the country around it is awful. Hell, the Ohio country side around Cleveland is nicer.

        As many virtues as Chicago has, it is a do business city. It exists and is great because it was a great place to do business and make things. It is not LA or San Fransisco. Those places are beautiful places that the will always attract the idle rich because they are beautiful. Chicago will never be that. It will turn into Detroit.

      3. What, are you talking shit about this???

      4. We have some of the best architecture in the country.

        Funny to me how people claim ownership of things where they live as if their little tax bill actually bought part of a skyscraper or something.

        1. Yep, that’s what I claimed. That I own part of a skyscraper, not that I enjoy walking around downtown more than I would around downtown Cleveland. Give me a break.

          1. I like walking in my neighbor’s yard and fishing in his pond, but we don’t have a nice yard and pond.

            I just think it’s funny when people use terms of possession for things they don’t possess. I understood your intent.

            1. I saw no admission nor implication of ownership – just because you inferred it, does not mean it’s there…

    3. Please. Chicago is Cleveland with more filth and crime.

      1. You are clearly infected with bias.

        1. Only tetanus. I went to the beach the other day. It’s almost starting to be ice-free!

          1. I’d move to Cleveland before Chicago. Lot’s of great golf courses within an easy 30 minute drive from everywhere.

            1. I’d move to the Cleve before Chicago because of the concentration of thick Midwestern blue collar dudes. I’m sure there are some of those in Chicago, but they’re drowned out by hipsters and suits.

          2. Your words are in English, but “beach” and “ice” do not go together. Why I was down at our beach house two weeks ago and the Canadians were frolicking in the surf. (I just assume anyone who swims when the Gulf is colder than a tepid bath is Canadian.)

            1. I went to Erie last Sunday. The signs as I approached the beach said “keep off ice dunes”. What is an ice dune? Well, an ice dune is a cool mini iceberg created by subzero temps freezing tidal waters. And yes I climbed all over them.

              1. The ice dunes are fucking cool. Climbing on them is obviously the correct thing to do.

          3. I just got off of a law mower.

            Blue skies and mid 70s here. I think I will go out and shoot my pistol a bit.

            1. A law mower sounds like a home defense tank for libertarian/anarchist/anti-government types.

  4. I don’t think Mr. Burns from the Simpsons would have been so wealthy without eminent domain or government subsidies. Of course the shows creator would never reveal that.

    1. Wait. Are you saying Matt Groening idolized Mr. Burns. He was/is the most hated man in Springfield. Also Canary Burns really owns everything.

      1. No, he’s saying that unlike Matt Groening’s cartoon, the cartoon he would make would suck

        1. You must teach me this ability oh wise one – the ability to read things that aren’t there, yet be completely confident that they are.

          Oh second thought – I prefer avoiding illusion to reality, but the US is full of people who willingly want to live lives of delusion – I say write a book and get to the speaking tour.

          Your potential, just like the words you imagine others saying, is literally limitless.

  5. Politicians are nothing if not short-sighted and focused on what gets them votes now. Class warfare? Sure! Long-term, it’ll fuck them, but politicians don’t care about long term. They care about power now. It’s one of the ultimate failings of a democratic system. It directly incentivizes the shortest-term thinking possible.

    1. I don’t even think it is class warfare anymore. I don’t think they are thinking beyond just making the next payment. They are like a compulsive gambler maxing out their high interest credit cards.

      I really think we have hit the point where these people are so broke and so desperate for money that they have stopped thinking long term or really about much of anything at all beyond just grabbing any money from any source they can.

      Long term this is going to cost them money and taxes. But they aren’t thinking long term. They are too desperate for that. They just see a little bit more money they can grab right now. They will worry about tomorrow when they get there. Right now they just need a fix.

      1. We’re becoming fucking France.

        1. 1780s France, you mean?

          1. No, that’s later. Just today’s socialist France.

            It’s like a mugger who comes up to you and demands more money than you have and doesn’t accept “I don’t have that much” as an answer.

            1. It’s like a mugger who comes up to you and demands more money than you have and doesn’t accept “I don’t have that much” as an answer.

              Fucking Gaenor, amirite? /obscure reference.

      2. They have to act this way, because if they don’t, the party is over.

        Next step will be overt violence and theft.

        1. Next step will be retroactive taxation, because “you made that money while you were here, so it’s really ours anyway.” Though they may try an exit tax first.

          1. California is already toying with that

            1. Simply don’t pay it and leave.

          2. 401(k) confiscation. It’s coming.

          3. Oh, you mean for years past.

            Like “We’ve decided that the new tax rate for the year 2000 is 97%. Please refile and writes us a check. Also, there are penalties due for not having paid the correct amount the first time.”

            Man, CA could really clean up on all those dot-com folks, again! Not that most of us have any of that money left, after we were out of work for five years following the crash…

      3. The class warfare is just an excuse, a desperate gambit as a cover for more money grabs, as you say. But that’s my point. They are only thinking about the now, and will kick the can down the road in any way possible. But that’s a direct result of the democratic system. You can’t get powerful and rich unless you win and get the power that comes with the political victory. So they do whatever they have to–now–to get that, because once they have it, they’ve made it. Anything afterward is somebody else’s problem. Like, the rest of us.

        1. Thus my idea that every elected official be tried by a jury of voters every time the official chooses to run for re-election. Anyone found guilty of abuse of power is sentenced to have all of their wealth confiscated, exiled for 10 years, and forbidden from ever holding office (elected or appointed) again. Anyone who chooses not to run for re-election may avoid such trial.

          1. How about, all congressmen coming up for reelection must participate in a competition where the last among them alive, gets to run for reelection?

      4. And yet the conventional wisdom is that it is the businessman who is solely focused on the short term, which is why we need benevolent public servants to rise above short term gain and take the long view.

        Not just wrong but 180 degrees wrong. Growing and sustaining a business takes a long term view, while the politician is focused only on the next election.

        1. And yet the conventional wisdom is that it is the businessman who is solely focused on the short term

          I know you’re disagreeing with it – but still – that is not nor has it ever been conventional wisdom. A true businessman, must look out for both short and long term.

          Having said that though – there has been a ton of discussions over at least the last 20 years – that CEOs, being incented greatly on stock price, pay too close attention to the short term.

          There were of course solutions proffered by many and legislation/regulation was part of it, but other than some regulations allowing stock holders to vote on executive compensation packages not much else happened.

          & really it shouldn’t – while I agree that the incentives for many CEOs are aligned too closely with short term gains, the business community knows this and has been and is searching for solutions, because the owners of the capital are already aligned with the long term.

          But due to those conversations, some things changes, like some compensation packages for big companies added new incentives geared towards long term growth such as requiring stock ownership for up to 10 years after retirement.

          But to be honest – I haven’t looked into this for years – so don’t know if things are much better or what other ideas have been used.

          What I do know is that the fact they are looking for an answer, proves the axiom wrong.

      5. They’ve run up against The Iron Lady’s Iron Law of Socialism: Eventually, you run out of other people’s money.

      6. Long term this is going to cost them money and taxes. But they aren’t thinking long term. They are too desperate for that.

        Even if they aren’t desperate, when you’re up for reelection every two years, that will be your timeframe for decision making.

        1. So what if you make it 6 years with annual votes of confidence and no chance of reelection?

  6. “…but if we cut it open, we can get all the golden eggs at once!”

  7. Ban them from leaving. Or, if some crazy how that’s not constitutional, demonize them for cutting and running. And if that doesn’t stop them, start calling the next tier down – the one that stays – “rich” and roll them for dough.

    1. I like your ideas. Can I subscribe to your newsletter?

      /moobs

  8. So when are they implementing the departure tax for anyone who tries to move out of their jurisdiction?

  9. comparing Republican gubernatorial candidate Bruce Rauner to C. Montgomery Burns of The Simpsons

    http://www.youtube.com/watch?v=ryVdIxMQZjE

  10. New Jersey 47 out of 50? We’re almost there. Wait… what?

    Christie wants to run for WHAT? LMAO.

    1. Yeah. The people who think that Christie could get elected amaze me. Granted, the political culture of New Jersey is so bad that it is not all his fault. But his actual record, viewed in terms of spending and taxes, is appalling and as bad as any Team Blue governor not named Jerry Brown.

    2. The only reason NJ is not 50 out of 50 is because oddly enough our gasoline tax is very low compared to other places.

      1. That is only because they figured out they could make money selling cheap gas on the Jersey Turnpike.

      2. You also have strong competition at the bottom. NY, Cali, Illinois…

  11. “Incentives only matter when they work in our favor.”

    Apparently, the skwerlz have condescended to permit me to comment once more, after days of banishing me to the dreary waste land of disappeared comments and a blank “log in” page. It may or may not be a good thing.

    1. The real news here is that Demunderground is still around.

    2. My favorite comment:

      Throw in Alan Greyson as Chief of Staff and Elizabeth Warren crunching the numbers

      1. How about this gem:

        Bernie, and Bob too!? We might actually have a choice!

        I’m assuming Bernie refers to Bernie Sanders. Are these people really that retarded?

        1. Yes. Yes they are.

    3. With as shallow as politics is, they think a man who’s the size of a child could ever win? They’d have to put a steppy-stool under his lectern at the debates.

      1. “Hillary, I’ve always looked up to you…”

      2. “He’s not gay, he’s a Hobbit!”

  12. Here in Indiana we love when Illinois does stupid crap like this. Some of those people and businesses will move East, and as their financial situation tanks, ours looks all the better by comparison.

    John, I don’t think they’ll lose those athletes. There are plenty of places to live in Indiana that are 60 minutes or less from Chicago. Oprah had a house in LaPorte for a while.

    1. Chesterton FTW!

    2. Does living outside the state/city matter? I bet Chicago and Illinois both grab dollars from people who merely work there. Especially Chicago, even if not the state.

      1. Chicago doesn’t have a municipal income tax.

        1. Really? I’m shocked. I only worked there during school, so I made too little to notice what was being taxed, but I’d have thought they’d be taking as much as they could get. I mean, it’s Chicago.

          Or are you being coy and not telling me about something the county does?

          1. Nope, I only pay state and federal income taxes. There are additional sales taxes for Cook County and for certain areas downtown, but no income taxes above and beyond the state.

            1. Maybe they make it all up in parking/towing fines?

              1. And city stickers for your car.

                1. And graft, oh, the sweet graft.

            2. I’m shocked as well.

              The best is living in NY or NJ and working in the other state. I can practically reach out and touch the new WTC tower from where I live, yet if I work there I ave to pay NY taxes.

    3. But doesn’t Illinois tax you even if you commute from another state? I am pretty sure the city of Chicago does.

      And even if it doesn’t, I am not sure how “but you could live in Gary and commute” is going to be a very effective pitch.

      1. Every state does

        1. Not true. My wife worked in Virginia and we lived in Maryland. We never paid Virginia taxes.

          1. 1) Just because you never did doesn’t mean you weren’t supposed to
            2) A lot of states in the mid-Atlantic region have tax compacts that waives taxes on workers from other compact states:

            http://www.tax.virginia.gov/si…..NRESIDENTS

    4. Oprah had a house in LaPorte for a while.

      I thought you WANTED them to move to Indiana?

    5. Exactly my thought, Kevin. NW Indiana has lots of nice places to live.

    6. If you take the toll road east past Lake County (solid blue, corrupt, and terrible – think Gary), you will reach Porter and LaPorte counties (solid red, more rural, and beautiful). And Nikki, I am right down the road from Chesterton, and I agree, it’s pretty nice.

      1. My bf’s parents used to have a second home in Dune Acres. I love it out there.

    7. Indiana is on the brink of corporate tax reform that will leave it with the lowest corporate income tax in America. State-level tax policy is undergoing massive reform all over the place in the last few years at the behest of the reformist Team Red governors that got elected in 2010. It’s been a libertarian breakout that demonstrates it is possible to get our policies.

    8. My BIL is a financial adviser in Chicago. He said he is taking more and more trips to NW Indiana for meetings because that is where his rich clients are moving to.

  13. Isn’t it obvious? Capitalism has killed Illinois.

    -Tony.

    1. That comment was a definite contender for the derp Hall of Fame.

  14. The newest front in the campaign battle came as Madigan held a rare news conference to announce he wants lawmakers to put a question on the Nov. 4 ballot asking voters whether the state should raise the income tax by 3 percentage points on those who make more than $1 million a year.

    3 percentage points is a lot when the current top bracket is what, 5% or 5.5%? And it’s only been that for a year or two. We had 3% flat income tax until just recently.

    1. The new Federal taxes/rates have been nice this tax season.

      It’s almost as if people prepared for them by adjusting their behavior…

    2. We had 3% flat income tax until just recently.

      That was a nice kick in the nuts on my paycheck. They are also talking about either pushing back the sunset of this increase, or just making it permanent.

      It’s just like the tollway around here. It was originally billed to just be a tollway for as long as it was needed to pay for it. Now it’s just a tollway to keep paying for people to stand around in the booths to take money and to earn overtime and a fat pension.

      1. Illinois Tollway = Suburban version of the CTA.

  15. Four will leave. The rest will continue voting Democrat.

  16. If you went back and added up all of the taxes and other initiatives that were passed “for schools,” I wonder how much of that money actually went to schools.

    I’m sure I wouldn’t be shocked at the answer to this question.

  17. Earlier this year, financial firm RegentAtlantic reported that New Jersey is suffering a net loss of taxpayers and adjusted gross income to lower-tax states, and that “the average income coming into New Jersey is approximately 50 percent less than the income that is leaving.”

    Further proof that we need to scrap this whole federalism thing. One nation, one government, one law!

  18. And California is still hemorrhaging money and people as many seek tax relief and opportunity, even if millionaires are willing to stick around for the nice views.

    Pretty soon the only people left in CA will be the limousine libtards who can afford to pay the high taxes, and the poor who can’t afford to move. Which was probably the point anyway: to drive away all those bourgeousie middle class people.

  19. If Illinois taxes millionaires, where will the union leadership move to?

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