Author: tarek

A new report from President Obama’s jobs council reflects a major dispute between corporate and labor leaders over tax reform. According to Reuters, the report “notes disagreement among council members over whether to shift to a ‘territorial’ system that exempts most or all foreign income from corporate taxes when it is repatriated.”

The report is from the President’s Council on Jobs and Competitiveness, which includes labor and business leaders and is chaired by Jeffrey Immelt, CEO of the notorious tax dodger, General Electric.

A “territorial” tax system is a euphemism for exempting the offshore profits of U.S. corporations from our corporate income tax. The bottom line is that our current system already provides a tax break that encourages U.S. corporations to shift investments offshore, and a “territorial” system would expand that tax break.

The existing tax break is the rule that allows U.S. corporations to “defer” U.S. taxes on their offshore profits until those profits are brought to the U.S. (until they are “repatriated”). Often these profits remain offshore for years and the U.S. corporation may have no plans to repatriate them ever.

This “deferral” of U.S. taxes on offshore profits provides an incentive for U.S. corporations to shift operations and jobs to a lower tax country, or just use accounting gimmicks to make their U.S. profits appear to be “foreign” profits generated in offshore tax havens.

These incentives for corporations to shift jobs and profits offshore would only increase if their offshore profits were entirely exempt from U.S. taxes, as would be the case under a territorial tax system.

Labor leaders know this, and labor unions have joined other organizations in opposing a territorial system. In October, when there were rumors that the Congressional “Super Committee” might propose a corporate tax reform, the big unions joined a letter to the committee members urging them to reject any proposal for a territorial tax system.

Corporate leaders, on the other hand, have been calling for a territorial system because of the benefits it would provide for corporations trying to lower their tax bills. The likely “disagreement” cited in the White House report probably was between the labor leaders and corporate leaders on the President’s jobs council.

As we explain in this fact sheet, the real answer is not to adopt a territorial tax system but to end “deferral.” Here’s a report making the same case in much more detail.

Ending Tax Breaks for Companies Moving Jobs Offshore

President Obama hosted an “Insourcing American Jobs Forum” last week with business leaders who are bringing jobs back to the United States. During the event, the President announced he’d soon “put forward new tax proposals that reward companies that choose to bring jobs home and invest in America.  And we’re going to eliminate tax breaks for companies that are moving jobs overseas.”

As already explained, the most straightforward way to do this would be to end deferral.

Another possibility is that the President could push some of the modest, but still helpful, proposals made early in his administration to limit the worst abuses of deferral. (Here’s a CTJ report explaining these proposals.) Unfortunately, the President immediately started backing away from these and dropped the most significant of these reforms (a change to the arcane-sounding “check-the-box” rules) by the time he made his second budget proposal.

Real tax reform depends on the administration being far more willing to stand up to the corporate CEOs — including those who sit on his jobs council.

Photo of Council on Jobs and Competitiveness via The White House Creative Commons Attribution License 2.0

With the Republican primaries now in full swing, the GOP candidates’ rhetoric on taxes has become even more disconnected from reality.

Santorum is No Blue-Collar Populist

Former Senator Rick Santorum used his new spotlight during last Saturday’s ABC-Yahoo GOP presidential candidate debate to highlight his plan to cut the corporate tax rate in half and eliminate the tax entirely for domestic manufacturing. Santorum explained the need for cutting the 35 percent tax rate by arguing that our corporate tax rate is the “highest in the world.”

While we have the second highest statutory corporate tax rate on-paper, the excess of tax breaks and loopholes in our corporate tax code make it so the effective corporate tax rate (the amount actually paid) is close to half of that. In fact, the US actually has the second lowest level of corporate taxes, as a share of its overall economy, of any developed country in the world.

Although Santorum promotes the populist aspects of his tax plan, the truth is that the majority of his proposed tax cuts would go to the richest five percent of Americans. A new analysis by Citizens for Tax Justice shows that his tax plan would provide an average tax cut of $217,500 to the richest 1 percent, which is over 100 times the size of the average tax cut the middle fifth of Americans would receive.

Gingrich on a Tax By Any Other Name

Former House Speaker Newt Gingrich usually offers nothing but hot air when it comes to taxes, but this week the Gingrich campaign brought up an interesting point in a new campaign ad attacking Romney for raising user fees in Massachusetts. The ad uses Romney’s support of user fees to question his anti-tax credentials because it says that user fees are essentially a “tax by another name.”

Of course, Gingrich’s ultimate conclusion is mistaken in that he assumes Romney should not have raised user fees or taxes but should simply have left public services unfunded.

But Gingrich’s criticism nonetheless acknowledges the trend among even the most infamous anti-tax governors to substantially increase user fees to avoid officially raising taxes. In fact, since 1979 virtually every state in the nation has begun to rely more heavily on user fees to raise revenue.

Huntsman’s Tax Loophole Consolidation Plan

Rhetorically, former Governor Huntsman hit it out of the park during the NBC-Facebook GOP presidential candidate debate last Sunday by declaring that we need to “say so long to corporate welfare and subsidies” and that our tax code is “chuck full of loop holes and deductions” which weigh it down to the tune of $1.1 trillion.

Unfortunately however, his tax plan, like the other GOP candidates’ tax plans, includes a “territorial” system that would exempt the offshore profits of U.S. corporations from U.S. taxes. This is essentially a way to expand and consolidate the existing loopholes that encourage U.S. companies to shift their investments offshore.

Similarly, Huntsman’s proposed changes to the personal income tax would actually add huge loopholes for the rich by exempting taxes on capital gains and stock dividends. In addition, while his plan would end a substantial amount of wasteful tax subsidies, it would also eliminate invaluable tax credits like the earned income tax credit.

In other words, Huntsman’s plan is more of a tax loophole consolidation plan for the rich and powerful, rather than a tax reform for everyone.

A new CTJ report shows how taxpayers in each state would be affected by the tax plans proposed by the Republican presidential candidates. The report finds that the cost of the tax plans would range from $6.6 trillion to $18 trillion over a decade. The share of tax cuts going to the richest one percent of Americans under these plans would range from over a third to almost half. The average tax cuts received by the richest one percent would be up to 270 times as large as the average tax cut received by middle-income Americans.

Read the report.

Lately, one of the biggest priorities of both conservative state lawmakers and Republican presidential candidates has been the reduction or elimination of the income tax.  But a new analysis of one such plan receiving consideration in Oklahoma should give pause to backers of this “reform.”

According to ITEP, over half of Oklahoma households would actually see their tax bills rise under a plan put forth by The Oklahoma Task Force on Comprehensive Tax Reform (heavily stacked with business interests), and low-income families would face the largest tax increases relative to their income.  Upper-income families, by contrast, would enjoy a bonanza, with the richest one percent taking home over $2,800 in tax breaks per year.

These are the predictable results of a plan that cuts Oklahoma’s top income tax rate and pays for it by eliminating some of the state’s most important and progressive tax credits and exemptions.

We’re usually big supporters of wiping out special tax breaks, but only when it’s done fairly.  And as the numbers above make clear, the Task Force’s plan is far from fair.  It does away with proven low-income provisions like the Earned Income Tax Credit (EITC) and the sales tax relief credit, and it scraps important and very popular breaks like the child tax credit and even the personal exemption.  Meanwhile, itemized deductions, which disproportionately benefit the richest families in Oklahoma – or any state, – are left largely untouched (except for the long-overdue elimination of the ridiculous and rare state income tax deduction for state taxes paid).

The Oklahoma plan is just the latest manifestation of a broader conservative tax platform that thinks the working poor are getting off too easy, and the rich deserve to see their tax rates slashed.  ITEP’s analysis makes a case study of Oklahoma under this disastrous plan; are other legislators listening?

Note to Readers: Over the coming weeks, ITEP will highlight tax policy proposals that are gaining momentum in states across the country. This week, we’re taking a closer look at proposals which would lessen a state’s reliance on progressive income taxes, often by shifting to a heavier reliance on regressive sales taxes. 

Georgia – A legislative proposal gaining traction in Atlanta would undercut the state’s reliance on the personal income tax – its only major progressive revenue source.  It would make up those revenues by raising the sales tax – every state’s most regressive source of revenue.  The plan also includes two other components that hit the poorest Georgians the hardest: taxing groceries and adding a dollar to the cigarette tax.  A sensible, comprehensive proposal from the Georgia Budget and Policy Institute is the template lawmakers should be following. It starts with fairness, ends with increased revenues and is all about modernization and reform. 

Kansas – If the expectations about Governor Sam Brownback’s proposed income tax changes are right, Kansas could have a hard time balancing its books. Tonight, the Governor, (who has received technical assistance from supply side guru Arthur Laffer), is expected to propose drastic reductions to state income tax rates.  Details on how the governor plans to make up the lost revenue haven’t been revealed, but his sidekick Laffer was recently quoted as saying, “It’s a revolution in a cornfield. Brownback and his whole group there, it’s an amazing thing they’re doing. Truly revolutionary.”

Kentucky –  Fresh off his reelection to the Governor’s office, Steve Beshear is expected to propose his own tax reform plan, but Representative Bill Farmer, who’s been itching to change Kentucky’s tax code for years, has already pre-filed his own tax overhaul bill, which would slash the state income tax, expand the sales tax base to include more services and lower the sales tax rate.  ITEP conducted an in depth analysis of an earlier Farmer proposal and found that his proposal would cost the state hundreds of millions of dollars and raise taxes on the poorest 20 percent of Kentuckians by an average of $138. We expect that his current proposal won’t do much to fix the state’s regressive tax structure either.

Missouri – Perhaps the most destructive proposal of this type gaining traction is Missouri’s mega-tax proposal, so called because it amounts to a massive consumption tax hike for ordinary Missourians. Proponents of the related ballot initiative that would eliminate the state’s personal income tax and replace that revenue by adding goods and services to the sales tax base are currently collecting signatures in an attempt to place the initiative on the ballot this November. Show-Me-Staters would be unwise to provide their signatures for this kind of campaign, however, because its passage would result in higher overall taxes for working families. Click here to see ITEP testimony on a similar proposal.

Oklahoma – Two seriously bad proposals that would increase the unfairness of Oklahoma’s tax system are currently under consideration. Working with (the aforementioned supply side guru) Arthur Laffer, the free-market Oklahoma Council of Public Affairs is proposing to eliminate the state income tax altogether. An ITEP analysis found that the bottom one-fifth of Oklahoma taxpayers — those earning less than $16,600 per year — would be paying on average $250 a year more in taxes, or about 2.5 percent more of their income. Similarly, the Tax Force on Comprehensive Tax Reform (dominated by business interests) suggests lowering the state’s top income tax rate and eliminating a variety of tax credits, many of which are designed to help low and middle income families. David Blatt, director of the non partisan Oklahoma Policy Institute recently said of the proposal, “This would hit hardest the poor and middle class families who are struggling most to make ends meet in a tough economy.”

Photo of Governor Steve Beshear via Gage Skidmore and photo of Art Laffer via Republican Conference Creative Commons Attribution License 2.0

A new report from the IRS estimates that individuals and businesses failed to pay $385 billion of the taxes they owed in a single year — a figure that many experts believe is an understatement. This comes just months after Congress cut funding for IRS enforcement activities that could recoup those dollars.

The IRS report estimates that taxpayers paid $450 billion less than was owed in 2006 and that the IRS eventually recovered $65 billion of that, leaving a net “tax gap” of $385 billion — which is roughly 14.5 percent of all taxes due.

As CTJ director Bob McIntyre explained in his testimony before the Senate Budget Committee a few years ago, he and other tax experts have long thought that the tax gap is actually larger than what the IRS estimates, particularly the portion that results from income hidden in offshore tax havens.

The IRS is less able to counter this type of tax evasion than it was in the past. Congress drastically slashed the IRS budget in the 1990s with the rationale that the agency was a bother to taxpayers. But another report released today by the National Taxpayer Advocate (a Bush appointee) concludes that the paltry budget for the IRS is itself the source of irritation for taxpayers who are affected by the various short-cuts the IRS must take in administering the tax system with fewer staff.

The more fundamental problem with the tax gap is that it means the vast majority of Americans, who pay the taxes they owe, are effectively subsidizing those who do not.

Most middle-income working people don’t have many opportunities to evade taxes because their employers report their wages to the IRS and withhold a portion of them for taxes. On the other hand, corporations and business owners are responsible for a majority of the tax gap.

For example, underreporting of business income, corporate income, and compensation by self-employed individuals together make up a majority of the tax gap, according to the IRS report.

Congress’s cuts to IRS funding are bizarre because this is one type of government spending that pays for itself several times over. In some cases a dollar of additional IRS funding can generate $200 of revenue. In other words, lawmakers have forced cuts to the IRS budget knowing full well that this is one type of spending cut that actually increases the budget deficit.

In addition to restoring IRS funding, there are other measures that Congress can take to increase income reporting and crack down on institutions that facilitate offshore tax evasion, as McIntyre called for in his testimony. Most of those proposals have still not been enacted, partly because they’re opposed by the Tax Cheaters Lobby.

Photo of Tax Preparation via Money Blog Creative Commons Attribution License 2.0

It seems impossible, but on the eve of the Iowa Caucus the once unstoppable ethanol tax credit expired. After three long decades and over $20 billion dollars spent, the relatively quiet expiration of this once sacred tax credit is surprising considering the pitched battles that took place earlier this year between Grover Norquist and Oklahoma Senator Tom Coburn over its repeal.

The fact that the credit expired on the eve of the Iowa Caucus, long considered the political bulwark against repeal, demonstrates just how far politically the credit has fallen. In fact, a survey found that even among Iowa Republican caucus goers, 57% of them favored Republican candidates calling for outright repeal of the credit.

Although the ethanol tax credit was ostensibly created to promote ethanol as a greener form of fuel, the credit has long been criticized by a wide variety of groups as a wasteful special interest tax break. As Citizens for Tax Justice Director Bob McIntyre once explained, the critical problem with subsidizing ethanol is the product itself takes “more energy to make than it saves” and that even with an exorbitant subsidy of $0.50 for every $1 gallon it was still not very competitive.

For their part, ethanol industry representatives admitted defeat, explaining that the ethanol industry had “evolved” and that now was the “right time for the incentive to expire.”

It is also the right time for scores of other tax credits to expire permanently. The ethanol tax credit is 1 of the 53 such provisions – called “extenders” because Congress quietly extends them every couple of years or so for their favored constituencies – which expired at the end of 2011, most of which are handouts to business interests. In a word, they are pork.

Let’s hope the ethanol subsidy’s death is permanent, and a sign that tax sanity is making a comeback in Congress.

Photo of Ethanol Production via Bread for the World Creative Commons Attribution License 2.0

Just as President Obama caved at the end of last year to demands that he extend the Bush tax cuts for even the richest Americans, it looked like he was ready to end this year by caving on the debate over payroll tax cuts. Then, strangely, House Republicans refused to accept the surrender.

President Obama and Democratic leaders in Congress made a huge compromise before they even began negotiating with Republicans. Economists agree that the government measures most likely to boost job creation are spending measures (including things like food stamps, infrastructure, hiring teachers) but President Obama decided to focus on a tax cut in order to appeal to Republicans.

And he did not choose the tax cut most likely to boost consumer spending by putting money in the hands of low- and middle-income people. That would be the Making Work Pay Credit, which was allowed to expire at the end of 2010. Instead, he proposed extending and expanding the payroll tax cut that was enacted for 2010, and which was originally proposed by Republicans.

So President Obama and Democratic leaders in Congress proposed that this year’s payroll tax cut be extended into next year and expanded. They insisted that Congress not attach controversial policies like hurrying approval of the Keystone XL Pipeline extension, and they proposed that the cost be offset by taxing millionaires. The President and Democratic leaders eventually surrendered on all of this.

Citizens for Tax Justice estimated that the millionaire surcharge would only affect one-fifth of one percent of taxpayers and that those affected would see their overall taxes go up by an average 2.1 percent. But Congressional Republicans objected that this would burden “job creators,” so the Democrats agreed to drop the millionaire surcharge.

But Republicans in the Senate were still not happy. Senate GOP leader Mitch McConnell introduced a bill to extend the existing payroll tax cut and offset the costs with the types of cuts in public services that Republicans usually support. Strangely, a majority of Republicans voted against this bill, too.

Even the number two Republican in the Senate, Jon Kyl, opposed McConnell’s bill and said he would support extending the payroll tax cut only if it was paired with another extension of the Bush tax cuts. Our figures comparing different types of tax cuts illustrated how this was essentially a demand that the payroll tax cut can only be enacted along with much, much larger tax cuts for the rich (like the Bush tax cuts).

Senate Majority Leader Harry Reid said the Senate would not approve must-pass spending measures before the end of the year without extending the payroll tax cut through 2012. But Senator Reid backed down and made a deal with Senator McConnell. The payroll tax cut would be extended for just the first two months of next year, and it would not be expanded. It would be attached to a provision requiring a quicker approval of the controversial oil pipeline project. And, of course, there would be no tax on millionaires. This bill passed the Senate with 89 of the chamber’s 100 members voting in favor.

President Obama endorsed the deal. It would at least get Congress and the country through the holidays, after which lawmakers could take up this debate again and hash out whether the payroll tax cut should be extended for the rest of the year.

Then something strange happened. Republicans in House refused to approve the Senate bill. They voted along party lines to appoint a conference committee iron out differences between the Senate-passed bill and a bill passed earlier by the House. But the Senate had already left town.

The bill passed by the Republican majority in the House (H.R. 3630) would extend the existing payroll tax cut for a year, but because House Republicans consider this an enormous concession, the bill includes many policy provisions championed by conservatives. It would offset the cost of the payroll tax cut with cuts in public services, which is the opposite of what the economy needs right now. It includes cuts and restrictions on unemployment insurance, delays on environmental rules and, of course, a faster approval for the oil pipeline project.

It’s awfully tempting to tune out of national politics entirely right now and enjoy some eggnog, except for one thing: Millions of Americans are struggling to find decent work and the House of Representatives has done everything imaginable to block anything that might change that. If lumps of coal were environmentally friendly, we’d encourage everyone to send them by the truckload to the House members blocking progress.

As the presidential campaigns rev up, taxes are emerging as the defining issue of the election. Unfortunately, a lot of misinformation and myths about taxes are spreading as candidates and commentators look to push their different economic agendas.

To start the election season off, here is a breakdown of the five biggest tax whoppers being told by the candidates and commentators alike.

1) Myth: 47 Percent of Americans Do Not Pay Taxes

Fact: All Americans Pay Taxes

Pundits and politicians will continue to rile up audiences this election season by claiming that half of Americans in the U.S. do not pay any taxes. This talking point is used to deflect questions about why the rich should pay their fair share.

The basis of this claim is data showing that 47 percent of Americans did not owe federal income taxes in 2009, which the recession was at it’s peak. The claim ignores the much more regressive federal payroll taxes or state and local sales, income, and property taxes that all Americans pay. The reality is that three-quarters of American households actually pay more in payroll taxes than federal income taxes.

Adding to this, the very reason many low income Americans do not pay federal income taxes is because they benefit from highly effective tax credits like the earned income tax credit (EITC), which incentivize work while providing much needed support to working low and middle class family budgets.

2) Myth: The American People and Corporations Pay High Taxes

Fact: The US Has the Third Lowest Taxes of Any Developed Country in the World

Total US taxes are actually at the lowest level they’ve been since 1958. The US has the third lowest level of total taxes of the Organisation for Economic Co-operation and Development (OECD) countries, with the exception of only Chile and Mexico. President Obama, who is often falsely accused of raising taxes, actually cut taxes for 98 percent of the country on top of temporarily extending the entirety of the Bush tax cuts.

A related claim is that the US has the second highest corporate tax rate in the world. This is misleading because it’s based on the on-paper (statutory) corporate rate rather than the actual (effective) rate that corporations pay. Because of the plethora of corporate tax breaks and loopholes, the US actually has the second lowest coporate taxes as a share of GDP in the OECD. In fact, 30 major corporations, including Verizon, Boeing and General Electric, paid nothing in corporate taxes over the last 3 years.  Rather than cutting corporate taxes, the sensible solution is to pass revenue-positive corporate tax reform.

3) Myth: Cutting Taxes Creates Jobs and Raises Revenue

Fact: Tax Cuts Reduce Revenue And Are Not Associated with Economic Growth

Since the rise of supply-side economics, tax cuts for the rich have been regarded as a magic elixir that could unleash economic growth, while simultaneously increasing government revenue.

The reality is that the tax cuts that have been tried for over 30 years have proven to be a stunning failure in all regards. In fact, history has shown that the tax rate on the wealthy simply has nothing to do with economic growth. Just consider the strong growth that occurred after President Clinton increased taxes versus the dismal growth following the Bush tax cuts.

Not surprisingly, tax cuts have been definitely proven to reduce revenue. Even President Bush’s own Treasury Department concluded that tax cuts do not create enough economic growth to to come close to offsetting their costs or raising revenue. The Bush tax cuts cost $2.5 trillion in their first decade and the Reagan tax cuts cost $582 billion.

4) Myth: The US tax system is very progressive because wealthy individuals already pay a disproportionate amount of taxes.

Fact: At a Time of Growing Income Inequality, the US Tax System is Basically Flat.

Conservative commentators and politicians claim that it would be unfair to raise taxes on wealthy individuals because they already pay a disproportionate amount of taxes, usually citing the fact that the top one percent of income earners pay 38 percent of federal income taxes. Once again, such claims ignore the fact that the federal income tax is just one of many taxes that individuals pay.

When you take into account all of the taxes that individuals pay, the truth is that our tax system is relatively flat. The top one percent of income earners receives 20.3 percent of total income while paying 21.5 percent of total taxes and the lowest 20 percent of income earners receive 3.5 percent of total income while still paying out two percent of total taxes.

In other words, wealthy individuals pay a high percentage of taxes because they earn a highly disproportionate amount of income. This is, of course, a consequence of growing income inequality in the United States, which is at a level not seen since before the Great Depression. 

Whether it’s Steve Forbes promoting his flat tax proposal in 1996 and 2000 or Rick Perry and Newt Gingrich in the 2012 presidential race today, the idea to sweep away our current tax system and replace it with a single rate, flat income or national sales tax (called the “Fair Tax”) has become a perennial campaign issue for Republican presidential candidates.

The simplicity of these proposals has much appeal for many Americans, who believe they would make filing taxes less complex and, at the same time, stop wealthy individuals from being able to game the tax system.

A deeper look, however, reveals that both the “fair” and flat tax are very regressive compared to our current system. One recent analysis of a typical flat tax proposal from last year shows that it would result in an average tax increase of $2,887 for the bottom 95 percent of Americans, while those in the top one percent would receive an average tax cut of over $209,562. Furthermore, the Institute on Taxation and Economic Policy’s analysis of the Fair Tax points out the under this system, the sales tax rate would have to be set at a politically and administratively unfeasible rate of at least 45 percent, and, the result would be the bottom 80 percent of American’s paying an average of 51 percent more in taxes compared to our current system.

It’s also important to note that “complexity in the tax code,” which a flat tax system purports to fix, is not caused by our progressive rate structure; rather, it’s the multitude of loopholes and tax breaks, all of which could easily be eliminated while keeping a progressive tax rate structure in place. 

Naughty

Michigan’s legislature and Governor Snyder top the naughty list by giving away more than $1.6 billion in tax cuts for business and paying for it with tax increases on low-and middle-income working and retired families.

Florida continued to dole out more corporate pork this year, including a property tax break that happens to benefit huge commercial land owners, like Disney World and Florida Power and Light, and other corporations (that also happen to be major donors to the state’s Republican governor and legislative majority party).

Minnesota’s legislature missed an opportunity to do the right thing when it rejected a tax increase on the state’s wealthiest residents. The plan was proposed by Governor Dayton and supported by 63 percent of Minnesotans over the alternative, which was cuts to spending on education, health care and other vital public services.

Anti-tax activists in Missouri were hard at work again. This year they were collecting signatures for a ballot initiative that would eliminate the state’s personal income tax and replace it with a broadened and increased sales tax.

Nice

Connecticut’s Governor Malloy and the legislature adopted a $1.4 billion tax increase that improved tax fairness in the state and protected public investments like education and health care.  Most notably, the state added an Earned Income Tax Credit, a significant tax break for low-income working families.

District of Columbia lawmakers greatly reduced the ability of corporations to dodge their fair share of taxes by adopting combined reporting (which makes it harder to hide profits in other states) and a higher corporate minimum tax. The Council also temporarily increased taxes for individuals making more than $350,000 a year and limited itemized deductions, which are most often taken by high income filers.

Hawaii lawmakers also limited upside-down tax giveaways (itemized deductions) for their state’s richest residents and passed other tax changes to raise much needed revenue.

A Little Bit Naughty and Nice

New York’s Governor Andrew Cuomo reversed his campaign vow not to raise taxes and supported a tax increase on residents earning more than $2 million a year.   The plan, passed by the legislature, also included a tax break for those with income under $300,000.

However, New York lawmakers passed the governor’s cap on property taxes this summer, which is predictably creating crises and forcing dramatic cuts in local education, medical, and public safety services.

Illinois raised significant revenue earlier in the year through temporary personal and corporate income tax rate increases, all designed to stave off harsh spending cuts, but then turned right around and gave away hundreds of millions of dollars to Sears and CME, allegedly to keep them in the state.