[Peace-discuss] Rich Whitney column

[David Green]

Guest View: Fix the taxes system, fix the state
http://thesouthern.com/news/opinion/editorial/guest/guest-view-fix-the-taxes-system-fix-the-state/article_efe8cfb3-ea5d-5456-98cf-1e6aaf3b3dec.htmlMany Illinois voters are of two minds about their government: Many believe that our government has become too large and unsustainable to afford. Some buy into the rhetoric that “government doesn’t create jobs; it destroys jobs.” Yet we also see many demanding, “Reopen Tamms!” “Don’t close the Murray Developmental Center!” “Save our prisons, boot camps, child services, SIU, AmTrak,” etc.The Paul Simon Public Policy Institute documented this inconsistency in surveys conducted from 2008 to 2011. A majority of Illinoisans insisted that our government wasted its tax dollars “on unnecessary programs,” but when asked which categories of spending they wanted to cut, even larger majorities opposed cutting anything except state workers’ pensions (and a plurality opposed cutting those). They couldn’t identify any services they actually wanted to cut.This reveals an important truth: People may not like “the government” but they realize that we need to educate our young, provide transportation and other infrastructure, protect children, provide public and environmental safety, and care for those unable to care for themselves – functions not provided by profit-making businesses.Government is not the enemy of job creation; it is the most dependable source of job creation – when we agree to fund it. Most tax dollars are spent directly on payroll. It’s the private sector, accountable only to owners and shareholders, that is unreliable. The unprecedented accumulation of wealth by the world’s wealthiest owners in recent years, fueled partly by tax breaks, has not led to corresponding job growth. As the London Telegraph reported last year, they are sitting on a mountain of $7 trillion in uninvested cash assets. When major U.S. corporations do create jobs, they often aren’t in the U.S.Our state government has not grown too large – it has been shrinking for 13 years, contributing to sluggish economic performance. According to Census Bureau data, Illinois state employment peaked in 2002, with 133,871 state employees. By 2012, the last year for which we have figures, state employment had fallen to 119,874 – a drop of 10.5 percent. During the same time period our population grew by about 350,000. Depending on which survey you look at, Illinois has either the lowest or the fourth-lowest number of state employees per capita in the U.S.Cutting state government has long term impacts. Cut education budgets, and you impose higher tuition, fees and debt on struggling students and parents, lowering discretionary income spent on other areas of the economy and cutting future income earning opportunities for the next generation. Cut public transportation and you get more clogged freeways, wasted fuel and air pollution. Cut public health and Medicaid, cut services for the disabled, addicts and others who need help, and get more people on the streets, in emergency rooms, jails and prisons, imposing even greater costs. No one likes paying taxes, but as Oliver Wendell Holmes said, they are “the price we pay for civilization.”Another columnist at this paper argued, “since 2008 Illinois has shown a 22.5 percent increase in tax revenue,” while our deficit continued to rise. What he did not tell you is that almost all of that was due to the one-time increase in the state’s income tax, from 3 to 5 percent, from 2011 - 2014. According to the Tax Foundation, not exactly a hotbed of leftist propaganda, as of 2012, when the higher rate was in effect, Illinois ranked 37th in state revenue per capita. Now that it has expired, Illinois must rank even closer to the bottom. Illinois is a low tax state.As explained in my April 3 column, the real problem is that Illinois has a horribly regressive tax system, taxing poor and middle-income people at a higher percentage than the very wealthy. While Republicans propose to attack the budget with a meat cleaver and Democrats want to gradually bleed us with smaller cuts and more unpaid bills, there is a better option: Tax speculative trading at the Chicago trading houses, as proposed in House Bill 106. A tiny tax on the sale of derivatives would allow us to adequately fund our state government, restore public jobs, solve the pension crisis, and make our tax system more progressive and fair, with one simple fix.
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