Greg Hinz

Amended Illinois Tax Hike Plan To Hit Taxpayers, Businesses, And Employment?

Back on January 16 I published a post on Survival And Prosperity entitled “Illinois ‘Grand Bargain’ Legislation Includes 32 Percent Personal Income Tax Hike.” I started the piece with:

Illinois taxpayers may get hit with a significant income tax hike pretty soon…

Yesterday morning, I learned the potential “hit” could be a “combination of punches” directred at taxpayers, businesses, and employment.

From the Greg Hinz On Politics blog on the website of Crain’s Chicago Business:

There’s still no word on when lawmakers are going to vote on it, but an amended tax-hike plan has been introduced in the state capital.

It’s a doozy, with an even higher income tax, a limited service tax and a sort of minimum tax on business. But the soda pop levy is gone, as are a couple of those corporate loophole closings that business groups didn’t like…

The highlights:

The Individual income tax would go to 4.99 percent from the current 3.75 percent, and the corporate income tax to 7 percent from 5.25 percent. Combined, that would pull in about an additional $5 billion a year.

A new “business opportunity tax” ranging from a fee of $225 to $15,000 a year would be imposed, based on payroll. The intent is to make sure that all companies pay something, whether they are profitable or not. The state’s net on this is an estimated $750 million a year.

However, the research and development tax credit would be made permanent and the manufacturers purchase and graphics arts credits would be combined, as some businesses wanted.

A service tax—extension of the sales tax—would be imposed on certain items including repair and maintenance of personal property, use of amusement services including gyms, landscaping, laundry and dry-cleaning, and storage of personal goods such as cars and property. This would pull in a projected $400 million a year.

The telecom excise tax would be extended to cable and satellite services.

Both Radogno and Cullerton are said to have negotiated and support the above, pending action on the rest of the package…

Hinz does a good job summarizing the proposed expanded revenue grab. At this point, I want to go back to that bit about a new “business opportunity tax.” From the actual legislation for the so-called “Business Opportunity Tax Act”:

Section 1-10. Tax imposed.
(a) Beginning on July 1, 2017, a tax is hereby imposed upon each qualified business for the privilege of doing business in the State.
(b) The tax under subsection (a) shall be imposed in the following amounts:
(1) if the taxpayer’s total Illinois payroll for the taxable year is less than $100,000, then then annual tax is $225;
(2) if the taxpayer’s total Illinois payroll for the taxable year is $100,000 or more but less than $250,000, then the annual tax is $750;
(3) if the taxpayer’s total Illinois payroll for the taxable year is $250,000 or more but less than $500,000, then the annual tax is $3,750;
(4) if the taxpayer’s total Illinois payroll for the taxable year is $500,000 or more but less than $1,500,000, then the annual tax is $7,500; and
(5) if the taxpayer’s total Illinois payroll for the taxable year is $1,500,000 or more, then the annual tax is $15,000…

I can see a number of existing and prospective Illinois business owners having concerns with the proposed “Business Opportunity Tax Act.”

First, Illinois already has poor business reputation. For example, early last year Chief Executive magazine asked 513 CEOs to rank states they are familiar with on the friendliness of their tax and regulatory regime, workforce quality, and living environment. The “Land of Lincoln” came in as the 48th worst state in this annual survey, beaten only by New York and California in that order. The “Business Opportunity Tax Act” has the real potential of increasing the perception that Illinois is business-unfriendly.

Second, if my understanding of the legislation is correct, the larger the payroll an Illinois business has, the more taxes they will pay. Consider the following. If I’m an Illinois business owner with a payroll just shy of $250K who would like to bring on more staff, I may be dissuaded from doing so to avoid forking over an additional $3,000 to the state (unless I’m convinced the hiring would offset the $3K hit). And how might employee raises be impacted once payrolls start approaching a higher tax bracket? The proposed “Business Opportunity Tax Act” may not be too terrific for Illinois employment.

Third, readers of this blog may know that I am in the process of rolling out a research business focusing on specialized asset protection. It’s been my intention to launch in the Chicago area. Lately, however, I’ve been thninking of opening up shop in southeast Wisconsin (where my family has a residence) due to the direction Illinois looks to be heading with taxes and its treatment of the business community. The passage of the “Business Opportunity Tax Act” could be the straw that breaks the camel’s back. I wonder how many other prospective Illinois business owners might be in the same boat?

Stay tuned…

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Hinz, Greg. “New, wider tax plan rolls out in Springfield.” Greg Hinz On Politics. 24 Jan. 2017. (http://www.chicagobusiness.com/article/20170124/BLOGS02/170129931/springfield-lawmakers-roll-out-new-wider-tax-hike-plan). 26 Jan. 2017.

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Chicago Homicide Study: ‘The City Is Way Safer!’ Part 1

(Editor’s note: Part 2 has been published and is located here)

I came across an interesting post earlier this evening on the Greg Hinz On Politics blog on the Crain’s Chicago Business website. Hinz talked about a recent Chicago homicide study conducted by Daniel Kay Hertz, a master’s student at the Harris School of Public Policy at the University of Chicago. Kay Hertz compared homicide rates in Chicago Police Department districts from 1990-1993 to rates from 2008-2011. Utilizing two colored maps, Kay Hertz wrote in his blog City Notes back on August 5:

The areas in dark green are the safest; the ones in dark pink are the most dangerous. The colors are calibrated so that green areas are safer than average for the early 90s, and pink ones are more dangerous than average for the early 90s. The 2008-2011 map keeps the same calibration: green is safe compared to the early 90s, so that you can see change in the levels of violence over time.

And, indeed, the first thing that jumps out from these maps is that there’s way more green nowadays, and it tends to be darker. The city is way safer!

(Editor’s note: Italics added for emphasis)

“The city is way safer!”

Kay Hertz continues to equate “safe” with lower homicide rates in the remainder of his blog post. The grad student writes later:

The North Side is unbelievably safe, at least as far as murder goes.

And then flames the mainstream media with this:

This is a complicated state of affairs, and probably goes at least part of the way to explaining why, in the face of a 50% decrease in homicides citywide over the last two decades, many people persist in believing that the opposite is true: because in their neighborhoods, it is. It’s a dynamic that defies an easy narrative, and makes me slightly less angry (though only slightly) at all those journalists who have written in the last year or two about murder in Chicago without mentioning that the city is, in fact, safer on the whole than it has been in fifty years.

“The city is, in fact, safer on the whole than it has been in fifty years.”

I’m assuming he’s still equating “safe” with lower murder rates here.

Now, Crain’s Hinz also mentioned the word “safe” when referring to the part of Chicago where he lives. From his post earlier today:

Overall, Mr. Hertz’s statistics are a good thing for most of the city. I and more than a million others live on the North Side and in adjacent areas, and they’re as safe as any other patches of urban real estate in the country.

“They’re as safe as any other patches of urban real estate in the country.”

Is Hinz also equating “safe” with lower homicide rates?

To each, their own.

And seeing I’m a big picture kind of guy, if its safety “on the whole” in the “Windy City” that’s being talked about, I suggest violent crime- which includes homicides- is examined instead. According to the Chicago Police Department, violent crime consists of:

• Homicide, 1st and 2nd Degree
• Criminal Sexual Assault
• Robbery
• Aggravated Assault
• Aggravated Battery

(Editor’s note: I’m aware of the allegations of “downgrade and reclassify” regarding these types of incidents. For example, downgrading/reclassifying a robbery as theft in the books to paint a better picture as it concerns crime. I’ll keep that in mind.)

A comparison of violent crime numbers in Chicago Police Department districts from 1990-1993 to 2008-2011. That’s what I think is needed here if we’re going to have a serious discussion about safety in the city of Chicago.

Time to crunch some numbers.

More tomorrow…

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Hinz, Greg. “When it comes to murder rates, Chicago is two cities.” Greg Hinz On Politics. 14 Aug. 2013. (http://www.chicagobusiness.com/article/20130814/BLOGS02/130819920/when-it-comes-to-murder-chicago-is-two-cities). 14 Aug. 2013.

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Wednesday, August 14th, 2013 Crime, Mainstream Media, Public Safety, Self-Defense No Comments
Survival And Prosperity
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Christopher E. Hill, Editor

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