Total capitulation by Governor Bruce Rauner is in the works. The taxoholics wore him down.
In the emergency session, Rauner has agreed to hike the personal income tax rate to 4.95% from the current 3.75%. The corporate income tax rate will rise to 7% from the current 5.25% rate.
For what? Nothing. Reforms are nonexistent.
Another Deadline Come and Gone
Illinois failed to approve a budget today and thus heads into its third fiscal year without one.
A vote has been scheduled for Sunday.
I do not expect your opinion will matter, but in the slim chance I am wrong, Please Email Your Representative voicing displeasure of the tax hike.
The preceding link will find your rep based on your address.
Rule of Nothing
A zombified Rauer has capitulated in every way but the final signing.
Tax hikes have been agreed to with no reforms in return.
The Rule of Nothing is clearly in play.
Rule of Nothing
In any given political situation, the best outcome one can reasonably expect generally happens when politicians do nothing.
Implied corollary#1: When politicians attempt to fix any problem, they are highly likely to make matters worse.
Corollary #2: Politicians almost never do nothing. It’s why we have a messed up healthcare system, education system, public pension system, etc..
Taxoholics Win Again
Chicago schools will not get fixed. The hikes will not shore up pension plans.
Within one month of tax hikes, public unions will ask for more money. And people will leave the state. So will corporations.
Rauner pledged 44 reforms. He is 0-44 on his pledges.
The property tax freeze currently under debate has so many holes it is as useful as a bucket with no bottom.
Trading tax hikes for nothing is a horrible deal. Nonetheless, the taxohalics won again.
More business flight and human capital flight is the guaranteed outcome. Doing nothing at all would have been a far better outcome.
Mike “Mish” Shedlock
Yancey Ward said:
It is a mystery to me what Rauner could possibly be thinking right now. Does he really expect capitulation after 2 1/2 years will get him reelected? If that is his calculation, he is a complete moron. I don’t know about most people, but were I an Illinois Republican voter, I would vote for any Democrat rather than vote for a Republican who turn tail and ran after 2 1/2 years of standing firm here- any Democrat would be better.
The good news? This will hasten the downward spiral that all Americans can learn from. And the continued election of Republicans as Governor of that fair state only serves to llustrate their own particular uselessness in a liberal bastion.
Medex Man said:
While everyone tells jokes about the state where Governors make the license plates, Speaker Madigan was given a free pass for decades of corruption.
Now that governors from BOTH parties have failed to fix anything — its painfully obvious that Madigan and his gang are the real problem.
Sunlight gets rid of cockroaches.
Everything government touches turns to crap. – Ringo Starr
Including Republican politicians. And whole societies.
You mean any 3rd party would be better
Voting democrat won’t fix a taxation problem.
Ben Franklin said:
Voting at all for anyone won’t fix anything, florida sandy. Its hopeless.
pa l said:
and somehow the Democrat run state will be saved by a Dem governor…good logic there
Richad Broberg said:
He is your typical republican.
Don’t ask me. We fled the corrupt and bankrupt State of Illinois years ago…..As did all of my extended family members, and most of my friends. Democrats do only one thing–milk taxpayers to hand out money to their minorities and fund absurd pensions to themselves and millions of bureaucrats.
Macro Investor said:
Been around a long time and I’ve NEVER seen gov cut anything. Every time they find a new pet project it’s an addition to taxes and bureaucracy. They probably have buggy whip inspectors collecting a salary in some dusty basement.
When gov shuts down and only critical personnel are called to work — that tells me who can be laid off immediately. It’s about 95% of the gov.
Don’t blame the red or blue team. They both do the same thing.
I picture Rauner as Warden Norton at the end of The Shawshank Tedemption.
“Rauner pledged 44 reforms. He is 0-44 on his pledges.”
At least he hasn’t been sent to prison as is the custom of IL governors past.
At least not yet.
Medex Man said:
Seems like Speaker Madigan just had a decisive victory in battle, but that victory has cost him the war.
Medex Man said:
In Connecticut, former Governor (now unelected dictator) Malloy signed an executive order declaring himself fuhrer so he could keep spending on things he wants while ignoring everyone else’s priorities.
Aetna meanwhile is fleeing the “insurance capital of the world” (Hartford CT) because they can’t tolerate the nonsense. They were the last big insurer remaining in Hartford — all the others have gone.
Malloy chased away GE, Aetna, Pfizer, UBS, dozens of firearms manufacturers, and more mid-sized businesses than anyone can count. Malloy was pleased that Vineyard Vines is “staying put” in CT, apparently he didn’t factor that Vineyard Vines quietly laid off hundreds earlier this year.
In place of all those jobs? Malloy raised taxes on the people remaining — so higher taxes spread across a smaller tax base. No one said the democrats could do math.
Isn’t The Hartford still in Hartford. I believe that is the state’s largest insurance company. We lived in Connecticut 20 plus years ago and could see the writing on the wall then. Several warzones including some parts of Stamford (a guy I worked with got stabbed 15 times one night just for the fun of it getting off of the train in Stamford), Bridgeport, Hartford and all of New Haven except around Yale.
Medex Man said:
No, the Hartford moved offices out to Windsor Locks more than a decade ago (and their HQ is in Farmington). And the only reason the Hartford isn’t gone from the state is because the company went bankrupt in 2008 and needed federal and state bailout money to survive.
What remains of The Hartford is a ward of the state, literally and figuratively. Without a massive bailout and 0% financing, there would be no The Hartford at all. On its own merits, The Hartford went bankrupt.
Aetna shrank (a lot) as they shift from multi-line, old world insurance to health e-insurance… so figuring out which company is “the biggest” depends on what year you look. Travelers used to be a huge insurer in Hartford — they left a LONG time ago.
Phoenix Companies is now the largest insurer in Hartford CT. They still have that silly ship shaped building a block away from the abandoned Colt Firearms factory (the one with the blue turkish dome on top). And the Colt building is still empty — 50 years and counting.
The Connecticut National Bank headquarters across the street from the abandoned Colt building… has been mostly empty for 20 years. It has a Subway sandwich shop on the ground floor.
Hartford Hospital — right across the street from what is no longer Aetna HQ — has armed guards escort staff to and from their cars, even though the cars are in a fenced in parking lot.
And Malloy’s home town, Stamford? You can get cheap rent at the former UBS building or the former IP / Champion Paper building, or the former GTE building, or the former GenRe building… and pretty soon the RBS building will be available too. One of the GE buildings in Stamford was taken over to be Stamford’s city hall, the other two are “available for lease” the signs say.
Connecticut had issues for many many years… it wasn’t all Malloy’s fault. But the guy came in and emphasized everything wrong with the state government while taxing to death anything that worked.
When there was a school shooting at Sandy Hook Elementary… Malloy’s first instinct was to try to jam through gun control laws and chase away weapons manufacturers (those jobs replaced with unemployment checks). Malloy never asked why state government psychiatrists said the shooter was “just fine, needs a hobby” — those psychiatrists are still on the state payroll!! (actually one is still on the state payroll, the other retired with full pension benefits).
Malloy took a state that was in trouble and destroyed it.
Medex Man said:
Oops — I am told The Hartford is actually in Simsbury, not Windsor Locks… its definitely not in Hartford, and definitely not able to survive on its own merits. Its what the Chinese call an SOE, or what the US calls Govt Motors.
It surprises me that Aetna is moving to New York. There was a time, years ago, when CT had no income tax, NJ’s was still comparatively low and NY was the source of tax refugees. NY’s property and income taxes haven’t diminished much, if at all, in the past 25 years. I can only imagine what the Democrats and their union patrons have done to the once lovely state of CT, and it bodes badly for the rest of us.
Medex Man said:
Aetna says they want to phase out their old line insurance businesses, and focus on e-health insurance. In NYC, they can hire 10 recent college IT graduates who all share a 1BR studio apartment. For the cost of 1 middle aged Hartford resident supporting a family, Aetna can hire all 10 grads sharing the studio apartment. And websites being computerized and automated, Aetna doesn’t need 1000 paper pushers to do the work of one server rack.
In Hartford, Aetna can only hire gang members with no computer skills. UConn is based out in Storrs (past Manchester), and those kids aren’t crazy enough to move into Hartford. Trinity College grads are mostly lawyers in larve form, not a place to find computer science grads.
Malloy looked at this situation and thought he could raise taxes and make it better (that is not a joke, Malloy really said that).
The good Governor will be adjudicated with the collapse of the state. Why shouldn’t he capitulate? The failure will rest squarely on the opposition party. No different than if Trump had said screw it and let Ocare implode upon itself. Both men tried to use reason and logic to cure an ill that’s incurable. When the stupid burns this white hot, why would anyone have held out this long? Common sense says go enjoy your life in any other state and let the commies persist at their insanity. Unfortunately, IL is a poster child for the Republic of fraud that has become “us”….
Illinois politicians to the residents: “The beatings will continue until attitude improves”.
The taxpayers elected these dipshits, it’s the taxpayers that should foot the bill. And if that bill is big enough, maybe the pain it inflicts will influence the outcome of the next election.
But, alas, it’s the bond holders who purchased in good faith that will end up taking it in the shorts through bankruptcy redistribution, letting the people who caused the mess in the first place off the hook.
Stuki Moi said:
The taxpayers these expendables expect to “pay the bill,” mostly weren’t even born when this decline started.
Noone whose explicit, individual signature is not on any bond or pension promise, has any obligation to pay even a fractional penny to anyone. The fact that some corrupt hack promise some gullible schmuck a million bucks, in no way obligates you to pay taxes to foot the bill.
That whole deal is 100% exclusively between the guy making the promise, and the guy believing him. You, I, nor any other third party, has exactly nothing to do with it al all.
And if that for some reason results in millions starving in the streets while Hank Paulson’s tanks drive alongside them, that changes exactly nothing.
The sooner people will grow the heck up, recognize this, and act accordingly, the better.
Carl R. said:
Honestly, who cares about this? I left Illinois years ago, and anyone that is still left there, or who still owns property there, deserves what they get. It seems obvious that taxes are going to go higher and higher and higher and higher, until no one is left at all. I would not be surprised to see property taxes triple or more.
Ron J said:
Now it is a gang of four. Illinois, Connecticut, Maine and now New Jersey.
Who’s next on the list?
Every state in the country, especially those run by Democrats and their union patrons. If you drop any soap, don’t bend over to pick it up.
Medex Man said:
New York State runs off Wall Street — with a little IBM and a tiny bit of Pepsi / Mastercard thrown in. When Wall Street sneezes, Albany is out of business. Don’t tell Andrew Coumo, he still thinks he can spend his way into the White House.
California was paying vendors in IOUs not very long ago. Their legislature actually discussed giving “free” healthcare to illegal immigrants even after they couldnt pay their bills. Just a matter of time before CA is back on the watch list. Maybe the basket of dot-com 2.0 companies (Uber, Faceplant, Tesla, etc) get toe tags, or maybe the massive military complex gets scaled back because Washington DC can’t afford it…
Michigan — while I am sure that a bunch of starving artists can rejuvenate Detroit in theory, I would have to point out they are called starving artists because they can barely feed themselves. Paying exorbitant property taxes is not in the cards.
Oregon — San Francisco exported all their homeless people to Portland. Still no free lunch.
Vermont — Bernie Sanders told them socialism would save their state… see Venezuela
Medex Man, “free healthcare” for illegals is a fact in Californication, thanks to Jerry Brown and the Assembly Democrats. The Senate President Pro Tem, Kevin De Leon, has bragged that “too many members of his family have used phony Social Security numbers that Trump might try to deport them all”. We can only hope.
Regarding “free health care” for illegal scum, children have received it for years, and the Democrats have found ways around Federal laws surreptitiously to give it to their parents, once Obozo expanded the No Affordable Care Act. The fix will be the massive restructuring of MediCal and Medicaid in the House and Senate reform bills, if either branch has the cajones to pass them.
As Mish noted above, Rauner is 0-44 when delivering against his promises. The House and Senate GOP all voted to “Repeal” Obozocare and sent a bill to him doing that in 2015. Easy to do when you know the Chief Executive will veto it. Now they don’t have that luxury. Let’s see if they live up to their promise, or are as useless as I assumed they’d be.
Don’t blame me – I voted Libertarian.
Medex Man said:
Lots of stuff slips through the cracks in CA, which is why the state is bankrupt.
But Gov Brown and the legislature wanted to implement official “free” universal care for everyone. The legislature found out it would cost $200 billion out of California’s $90 billion some-odd state budget. Even the libtards realized that kind of tax increase would crush the state economy overnight.
And there cost estimate (more than twice the budget for everything else the state does) was probably very conservative. These people have a tendency to over-estimate revenue and drastically underestimate costs…
Not to mention the libtards in San Francisco are so tolerant of poverty that they shoved all their homeless people to Portland… while making housing so expensive that many starting employees at Google can’t afford to live anywhere in Silicon Valley. Libtards want to save all the poor people by sending them elsewhere and telling other people to pay more more more. When they get the bill themselves, they balk.
California could not come up with the money to implement the kind of “free universal healthcare” that they insist the country should provide. They are OK with Pelosi stealing it from other states, but not OK with paying themselves.
Nasty, selfish, intolerant group — and their socialism is now on a collision course with baby boomers hoping to retire on $800 in savings (as in less than $1000… they lived beyond their means their whole life)
“The legislature found out it would cost $200 billion … ”
The people of California already spend 367B per year on healthcare, thanks to the money-gouging health insurance companies. And that still leaves about 3 million with no health insurance whatsoever. It will get a lot worse once Trumpcare kicks in.
And the lack of savings is true of most Americans in general.
Medex Man said:
@whirly brain– Only a clueless political con-man focuses on how many people have (or supposedly don’t have) insurance. Human beings want health CARE, politicians want to focus on who a study claims to be insured.
No one cares if you officially have insurance but you can’t use it — and by that standard (the only standard that matters) — a LOT FEWER people are getting health CARE under obama’s fraud.
You also managed to confuse how much Californians spend on healthcare, with how much the CA state government spends on healthcare. I doubt any of your numbers are correct given how careless you are with details, not to mention your inability to differentiate between insurance and actual care
Don’t forget Puerto Rico
New Yawk and Cornyfornia are digging real fast, but I’d keep the four and change the name from “gang of Four”, to the “Four Horseman” as in Jim Cramer’s Four Horsemen or the biblical Four Horsemen of the Apocalypse.
Michael Surkan said:
Why is Rauner caving in? Is he doing worse in the polls than the democrats? Is he concerned that the public will blame him for the impass and that will cause him to lose the next election? What is it that the Democrats have over him?
When you’re that high in the food chain Republican and Democrat are nearly always synonymous.
Sure – they wear different colored jerseys for show but still play on the same team.
Illinois roots said:
I was smart enough to get out of Illinois over 30 years ago, but was not smart enough to get rid of my farm property. I received my property tax bill on the Illinois property a few weeks ago, and noted that property taxes were up over 30% from last year. That is on top of the 10% increase from the year before. Taxpayers in Illinois are going from milk cow status to beef cow status.
There is only one response to new taxes, and that is NO! Perhaps you’ve not bee noticing, but if you look closely, you’ll see some ripples in your economic coffee cup, and it’s not a dinosaur, though you might soon wish it were.
This is no time for raising taxes, you don’t want to be the one to tip over the first domino.
Carl R. said:
Does anyone really think that a percentage or two of increase in income tax is suddenly going to make everyone leave? If so, why haven’t they left already, when they can already move to Tennesee, Texas, Florida, or New Hampshire, which I believe are the four states with no state income tax. Now, when the property tax triples or more, which it seems bound to, that will crash housing prices, and it will be too late to leave, but hey…
Seven states have no income tax: Wyoming, Washington, Texas, Alaska, South Dakota, Nevada & Florida. Tennessee & New Hampshire tax interest & dividends.
Tom G. said:
Speaking as someone who has lived in New Hampshire for over 15 years…
Lest you think that New Hampshire is some kind of tax paradise because it doesn’t have an income tax, my house’s annual property taxes are almost $7k/year. If I work in Massachusetts (frequently), I get to pay MA income tax on top of the NH property taxes. If you own a car, it costs over $200/year to equip that car with license plates. That’s the minimum, and the average cost for a new-ish car is more like three times that number.
No sales tax, but there’s a meal tax of 9% which is levied on all prepared foods.and restaurant meals.
Over the past fifteen years, my property taxes have doubled, and most of the taxes and fees I pay have done the same. The best I can say about New Hampshire is that it is *slightly* less screwed up than the other places I have lived.
Illinois has property tax, income tax, and a sales tax exceeding 10% in some places. I am not sure but have been told it is the only state with every tax. The property and sales taxes are at or near highest in the country. The average Illinoisan makes less than he did in 1999 while the state and government employees, among the most lavishly overpaid in the country get raises every year. The pensions are a nuclear bomb.
Carl R. said:
I’ve lived in Illinois, but I left. Yes, the total tax load is very high already, and bound to get much higher. That’s why I ask two things. First, why haven’t more people already left? Second, for the people who are too stupid to have not already left, when taxes are already high, will another 1% really change anything? The rates of departure may accelerate a bit, but that’s it. I don’t think there is a break point at which everyone will just leave at once.
Its a slow death spiral, though. As rates go up, people will continue to leave, and that will necessitate more tax increases, and so on. Last one out, please turn off the lights.
I’m gone when my mother and in-laws (all near 90) cash their chips. Can’t leave ’em and can’t take ’em with us. That’s why we are still here. I tell you if ADM, Caterpillar, John Deere and whatever else is left walk across the street or bridge to Iowa, Indiana etc. This place will literally be fried. Obviously everyone can’t leave at once but Rauner got them to stay saying he would fix things. He hasn’t and the savings in unemployment and workman’s comp alone make abandoning buildings and packing up the machinery and moving out extremely compelling.
New York State used to have a top income tax rate of 14% and New York City had (and still has) a city income tax. Some businesses left along with some of its residents. But NYC has had fewer murders in recent years than Chicago, a city with a population about 1/3 of NYC’s.
Disagree. I am all for specific taxes. How about a 50 (60, 70…) percent state income tax on state pensions. Avoids the legal problems of haircuts to mandated pensions and rams it home to government employees how painful high taxes.
The egalitarian lifestyle of the hunter-gatherers just doesn’t work very well in the modern world.
It’s about 12,000 years out of date.
Carl R. said:
I doubt it was egalitarian back then, either.. If you couldn’t hunt or gather, most likely you starved.
People and businesses will be voting with their feet.
So many are moving here to North Texas the real estate market is nuts.
Brian Dicaire said:
Mish… when are you leaving the Great State of Illinois? I bailed out to Arizona 5 years ago…from the Village of Matteson.
Brian Dicaire Cottonwood, AZ
Frederick N said:
Politics vs Mathematics
Illinois has $14.6 billion in unpaid bills, a budget deficit of $6 billion, and a pension liability of $130 billion.
The only answer is for all responsible productive taxpaying Illinois citizens to sell your properties and flee the state. Those who allow the liberals to mismanage the state public treasure then raise the taxes on the victims of that mismanagement without even proposing fiscal reforms to stop the hemorrhaging have no self respect. You can call your elected officials until the phones ring off the hooks – they don’t give a %$*$ what you want. The rulers will tax you out of house and home.
There are 50 states in the union. It’s a big nation. Pick another one and move there. That’s the only way you can beat the bastards.
It is called “voting with your feet”.
It certainly is… and I said exactly that in a comment I posted here twice hours ago but neither comment showed up. Maybe I am on Mish ‘s black list.
I am out of town frequently and when I am -Slow to approve comments
“…out of town…” Hopefully looking for your new home in Montana.
I cannot figure out why anyone would want to be governor of Illinois. The crooks (which is most of them) end up in jail, and an honest one can’t get anything done. If I were Rauner I would send a letter to Mad-again telling him: “It is impossible to work with you, so I quit. Good luck, a$$hole. Don’t forget to turn off the lights.”
Or want to be mayor of Chicago. Rahm should have stayed in his old financial job and kept a low profile.
Apparently the inflated egos of some people do not work well with a low profile.
I watch Illinois to see where California is heading. Although Illinois is pulling away so quickly it may be hard to keep up.
Thanks to Howard Jarvis and Paul Gann, property taxes remain reasonable in California for long time residents. I never expected Proposition 13 to last 39 years but it is still going strong.
Walgreens Boots Alliance.
Archer Daniels Midland.
State Farm Insurance.
United Continental Holdings.
Galbraith; The official response will be “dat day is all jus’ rayciss.” I’ll say it if no one else will. You can’t have a decent state with millions of illiterate Democrats voting to stick their hands in your pocket.
Reblogged this on John Barleycorn and commented:
Doubling down on bad behavior.
Drive around Illinois. Avoid highway robbery traffic tickets.
Yup; radar traps everywhere in IL, especially in small towns. CA has many faults, but I have been going 80 on the freeway and had a cop pass me by. If you are not speeding I think the cops figure you must have been drinking.
Illinois is only a few years ahead of the rest of the country in the corruption department. Another expensive foreign war should just about finish off the US. In the meantime, with all the talk of repealing and replacing Obamacare, McConnell and his Republican cronies are ignoring the high cost of medical care in the US. More US companies will be shifting more work abroad whenever they can in coming years because of the high cost of providing subsidized medical insurance for their employees.
Reblogged this on World4Justice : NOW! Lobby Forum..
Ben Franklin said:
This is why I won’t buy a house. Sold in April 2005. Waiting for the collapse.
Ben Franklin said:
If Rauner were smart he would go ahead and resign now. Why be around when the inevitable happens?
Rj chicago said:
I left last August never to return to that craphole state.
Q: Detroit was leading the way. Why can’t IL follow its lead and get it over with? Don’t some folks WANT to do something draconian over these unfunded liabilities?!?
BTW, the German government is acting in a comparatively fraudulent fashion. 1. Unfunded pension obligations of its 5.25 M civil servants (for life). 2. To choose a specific “cost center”, refugees’ expenses. The “21.7 bn €” as official amount should be easily repudiated by a clever 10 years old with a pencil and paper. About 1.7 M asylum applications in the last few years… And specific leaked details tell a different story.
The leading economist, Prof. Sinn, calculated a total expense of about 500 bn €. Before these people may start paying into the social system.
Back to IL, it’s intentional dishonesty which makes such crises worse. They all should be put under oath when they address the taxpayers.
No debate, no opposition, no indepeendents speaking out and setting taxpayers free with the TRUTH?!?