Friday, October 19, 2007

Tax news and something fun (updated)

The Taxpayers’ Federation of Illinois' board of trustees voted to provide “qualified support” to SB 572, Rep. Julie Hamos’s measure to give a much-needed boost to Chicago-area transit and to give some more money for operating costs of downstate public transit systems. I’ll try to post the association’s position statement as soon as it’s available.

Here's the federation's statement supporting Hamos' legislation:
• "TFI supports the pension, healthcare, and governance reforms in the bill. TFI has taken the position that reforms to spending, such as spending on pensions and healthcare, should be prerequisites to any increases in revenue. TFI believes that the reforms agreed to between the Chicago Transit Authority (“CTA”) and the relevant unions to, among other things, increase contribution rates and increase the retirement age to 65 are positive steps to reining in costs. TFI believes these reforms are an example of the types of reforms the State should undertake in the future to reduce its own cost structure."

• "TFI supports the sales tax increases in the bill as reasonable, targeted increases to fund transit needs. Given that transit use is regional to a particular area, TFI believes an increase in the sales taxes in Chicagoland is a reasonable revenue source since it will be targeted primarily on the taxpayers of the area that is serviced by the Regional Transportation Authority (“RTA”)."

• "TFI previously worked with the Illinois Association of Realtors (“IAR”) to obtain the referendum requirement for home rule municipalities. The provision in SB 572 grants an exception to the requirement for the limited instance of this particular tax imposition in Chicago. While TFI is concerned about this exception, we acknowledge and support the fact that the bill does not rescind the overall requirement for home rule municipalities to seek voter approval of the imposition or increase of real estate transfer taxes."

• "TFI also believes that reasonable fare increases designed to reflect the growth in operational costs should be part of any future fiscal considerations of the RTA and its service boards."

Tax climate
The national Tax Federation also released its 2008 State Business Tax Climate Index, which is supposed to rank states based on how “business friendly” they are. The news release says the index “measures how well a state's tax system encourages investment by maintaining a broad tax base and low rates.” It considers the corporate tax, individual income tax, sales tax, unemployment tax and property tax.

Illinois places 28th overall. Here’s Illinois’ rankings in the sub-groups:
Corporate income tax: 29th
Individual income tax: 12th
Sales tax: 32nd
Unemployment insurance tax: 42
And property tax: 40

The report says Illinois, along with Pennsylvania, Indiana, Michigan and Colorado, are in the top 12 for the individual property tax because each state uses a single, low rate. Watch for my November column about Chicago's property tax system.

Illinois placed 27th overall last year and 29th in 2006. That’s down from placing 19th in 2003, the first year the group published the report.

“Good state tax systems levy low, flat rates on the broadest bases possible, and they treat all taxpayers the same,” the federation says. “Variation in the tax treatment of different industries favors on economic activity or decision over another. The more riddled a tax system is with these politically motivated preferences the less likely it is that business decisions will be made in response to market forces.”

Here’s the executive summary of the background paper, and here’s the full background paper. You can access the full report here.

By the way, this is the same group that said Gov. Rod Blagojevich’s failed gross receipts tax idea was the “largest single-year state tax increase this decade.” I mention that in my May feature about the state’s business climate. Watch for more analysis by Charlie Wheeler, director of the Public Affairs Reporting master’s program at the University of Illinois at Springfield, next month.

Something fun
You may be interested to see which presidential candidates align with your views. WQAD News Channel 8 linked to this 11-question survey, which is not scientific, developed by Minnesota Public Radio. It’s here. It's quick and easy, but the site says it's not meant to pick your candidate for you. It's designed to inform the public about the candidates' stances on a variety of issues.

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