Illinois Governor Wants to Hike Taxes: What Else Isn't News?

Mish

Illinois has its eyes on your pocketbook, again. This time: gas taxes, registration fees, Netflex, and Uber.

The Illinois Policy Institute reports Gov. J.B. Pritzker’s office is using a major capital bill as a vehicle to grease lawmakers for a progressive income tax amendment. But the tax hikes to pay for it would make Illinoisans’ gas tax burden the second highest in the nation.

  • Gas tax hike ($1.2 billion): The preliminary capital plan relies on doubling Illinois’ motor fuel tax to 38 cents from 19 cents per gallon, effective July 1. This would make Illinois’ total gas tax burden the second highest in the nation. Under the proposed gas tax hike, drivers filling up in Chicago would pay 96 cents in taxes and fees on a $2.46 gallon of gasoline – an effective tax burden of 39%.
  • Vehicle registration fee hike ($490 million): The preliminary capital plan would also hike vehicle registration fees, imposing a new cost structure based on the age of the car. The current annual fee of $101 would jump to $199 for vehicles 3 years old or newer, $169 for vehicles 4-6 years old, $139 for vehicles 7-11 years old, and $109 for vehicles 12 years and older. The $199 registration fee for newer vehicles would be higher than any neighboring state and third-highest in the nation, according to Ballotpedia research.
  • New $1 per ride tax on ridesharing ($214 million): The plan would enact a statewide $1 per ride tax on ridesharing services such as Uber and Lyft. Chicago already levies a 72-cent per ride fee on ridesharing services.
  • New 7% tax on cable, satellite and streaming services ($150 million): Chicago’s “Netflix tax” would expand statewide, with the state charging a 7% tax on users of streaming services, as well as cable and satellite customers. None of these services are currently taxed at the state level. Chicago currently stretches the definition of its 9 percent citywide “amusement tax” to include online streaming services such as Netflix and Spotify, as well as Playstation rentals.
  • Tax hikes on beer, wine and liquor ($120 million): Taxes on booze would rise by up to 50%. The per-gallon tax on beer and cider would rise to 27.7 cents from 23.1 cents; the per-gallon tax on wine would rise to $2.05 from $1.39, and the per-gallon tax on distilled liquor would rise to $12.60 from $8.55. Bob Myers, president of the Associated Beer Distributors of Illinois, estimated Illinois loses out on up to $30 million per year to cross-border alcohol purchases.
  • New statewide parking garage tax ($60 million): Daily and hourly garage parking would be hit with a 6% tax while monthly and annual garage parking would come with a 9% tax. Chicagoans already pay among the highest parking rates in the country. The state does not currently tax garage parking.
  • Doubling the real estate transfer tax ($34 million): The proposal doubles the real estate transfer tax on non-residential real estate to $1 from 50 cents per $500 in value.
  • Hiking registration fees for electric vehicles ($4 million): The registration fee for electric vehicles would rise to $250 per year from $34 every other year.

Q: What do we call this?

A: A start!

This is ongoing and it will never stop.

Progressive Tax Push

Pritzker wants to amend the state constitution to allow for "progressive" graduated income taxes. He claims it will be a tax on the wealthy.

He is a blatant liar. It will be a tax on everyone. The wealthiest will leave. And even if they don't, there is already a general exodus. Illinois is losing population while neighboring states are gaining.

The most important point is that pension benefits to public unions and other unfunded obligations total nearly 50% of Illinois budget!

For discussion, please see Warren Buffett Would Not Locate a Business in Illinois: Let's Explore Why.

Mike "Mish" Shedlock

Comments (26)
No. 1-17
Stuki
Stuki

And yet some people insist anonymity preserving crypto currencies serve no purpose.....

flubber
flubber

I guess Governor Pritzker is out to prove that he can squeeze blood out of a turnip.

Gasmire
Gasmire

The proposed taxes on booze are enough to drive a man to drink.

Carl_R
Carl_R

You didn't mention the proposed $1000/vehicle per year tax on the registration of electric vehicles. Note that I believe electric vehicles SHOULD pay a high registration tax. They use roads. Roads are paid for via tax on gasoline. Therefore non-gas vehicles should pay the tax in some other way. Nevertheless, $1000/year is crazy. $2-300 per year is a much more realistic amount.

Menaquinone
Menaquinone

Illinois is a real time example of 'Atlas Shrugged'. The population flight out of Illinois may seem insignificant but those thousands who leave are the taxpayers, and employers. For every 10,000 who leave there are a half million added to the welfare rolls.

The next shoe to drop is the federal government will stop paying welfare, EBT, section 8, and WIC. Banks that lend to Illinois will be audited and denied access to federal reserve funds. Farmers will stop growing crops and put their land into the soil bank. One or more Illinois universities will lose all federal grants because of freedom of speech violations. CAT will move out of Peoria to a right to work state. Federal contributions to public i.e. union schools will come to a dead stop. Some cow will kick over a space heater under the Christmas tree and start another Chicago fire.

Greggg
Greggg

The last time I went to Chicago was in 2006... a week after that UFO. After the 3 day weekend trip and being relieved of a considerable amount of money, I figured the aliens were smarter than I, as they left after hovering long enough to figure out it was too expensive to stay there.

Cecil1
Cecil1

The Income Tax is Destroying the World Economy

The Income Tax is Destroying the World Economy | Armstrong Economics
The Income Tax is Destroying the World Economy | Armstrong Economics

It is imperative that we MUST eliminate the income tax. It is a purely a Marxist development that is destroying the world economy. The income tax has become such a tyranny that our liberty, freedom of movement, and world economic growth are all at great risk. Never before in the history of human civilization do we find an income tax. It is true that Ben Franklin once said that the two certainties in life were death and taxes. It is equally true that taxes, in general, have been around since the beginning of civilization. We do know that the earliest recorded tax was implemented in Mesopotamia over 4500 years ago, where people paid taxes throughout the year in the form of livestock, which was the preferred currency at the time. The ancient world also had inheritance taxes, also known as estate taxes or death taxes. The earliest recorded evidence of a death tax came from ancient Egypt (700 BC), where they charged a 10% tax on property transferred at the time of death. The most serious crisis we face is that with the dawn of Marxism (Communism/Socialism) the way we pay taxes has changed significantly. Yet, one for the record took place in 2006 when China eliminated what was the oldest existing tax in history. The agricultural tax was created 2,600 years ago and was eliminated in 2006 to help improve the well-being of rural farmers in China. Taxation in the United States can be traced to the colonists when they were heavily taxed by Great Britain on many things from tea to newspapers. Legal and business documents were required to display a Stamp Tax. Most colonists objected to this form of taxation, since they had no political input about the creation of new taxes, giving rise to the term "taxation without representation." After the American Revolution, the new government of the United States passed the Stamp Act of July 6th, 1797, which levied taxes on wills, personal estates, and the infamous death tax -- the transfer of possessions of the deceased. The death tax only lasted 5 years and was abolished in 1802. The first issue of US tax stamps occured on July 1, 1798, and had the name of the state incorporated in the design. This issue lasted until February 28, 1801. The highest denomination was $10. The second issue was authorized by the Act of April 23, 1801, and lasted from March 1, 1801 until June 30, 1802. It also carried denominations up to $10. The third federal issue was imposed by the Act of August 2, 1813, and was in effect from January 1, 1814 to December 31, 1817. By the American Civil War, embossed tax stamps were replaced by printed tax stamps. Because of the demands upon the government to fund the Civil War, Congress passed the Revenue Act of 1862, which put taxes on boxes or packages of matches, perfumery, playing cards, documents, and then medicines. There was also an issue of paper printed by private firms under the supervision of the government with the tax stamp in place on checks, for example, which lasted from 1862 into 1883. The government allowed the manufacturers to create their own stamps at their own expense. The government allowed the various companies to add 5% to 10% premiums on their products if they covered the costs of manufacturing the tax stamps. This private tax stamp system was in use until July 1, 1883, when the Act of March 3, 1883 took effect. The first income tax was created in 1861 during the Civil War as a mechanism to finance the war effort. In addition, Congress passed the Internal Revenue Act in 1862, which created the Bureau of Internal Revenue, an eventual predecessor to the IRS. The Bureau of Internal Revenue placed excise taxes on everything from tobacco to jewelry. However, the income tax did not last and was not renewed in 1872. In the Springer v. United States 102 US 586 (1881), the Supreme Court upheld the income tax. Justice Swayne wrote the opinion of the court. The central and controlling question in the case was whether the tax which was levied on the income, gains, and profits was Constitutional since it forbid any direct taxation. The court played games with the words to uphold the government. It wrote: "Our conclusions are that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty." A Capitation tax is an assessment levied by the government upon a person at a fixed rate regardless of the property, business, or other circumstances. The reasoning used was clearly overruled later which necessitated amending the Constitution in 1913. Moreover, the Revenue Act of 1862 created a federal estate and gift tax system. Following the end of the Civil War, those taxes were rolled back but the War Revenue Act of 1898 created another death tax to raise revenue for the Spanish-American War. An 1894 statute was ruled unconstitutional in the case of Pollock v. Farmers' Loan and Trust Company 157 U.S. 429 (1895) delivered by Chief Justice Fuller. He wrote for the court: " Whether the void provisions as to rents and income from real estate invalidated the whole act? 2, whether, as to the income from personal property as such, the act is unconstitutional as laying direct taxes? 3, Whether any part of the tax, if not considered as a direct tax, is invalid for want of uniformity on either of the grounds suggested? -- the justices who heard the argument are equally divided, and, therefore no opinion is expressed." The origin of the current income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913. It was on June 16, 1909, President William Howard Taft, in an address to the Sixty-first Congress, proposed a two percent federal income tax on corporations by way of an excise tax and a constitutional amendment to allow the previously enacted income tax. Once this Marxist concept of direct taxation was created, then the government must know everything we do, track us for it assumes we all cheat and lie, and in the process, it is hunting money globally to the point that world economic growth has been declining. It was Obama who pushed FATCA (Foreign Account Tax Compliance Act) that requires all foreign entities to report on anything they do with Americans outside the USA or else their assets will be confiscated in the USA. The FATCA legislation was passed into law in 2010 as part of the unrelated jobs legislation known as the HIRE law. FATCA is a broad, complex set of rules designed to increase tax compliance by Americans with financial assets held outside the United States. Consequently, no American can have a bank account outside the USA, for banks will no longer accept the risk that an American failed to pay their taxes. Prior to FATCA, growth rates were generally greater than 6% reaching 7% in 2004 annually. Since then, the highest growth rate was 5.4% in 2018. All countries are now hunting taxes and destroying would economic growth. The tax dispute UBS is in now with France will occupy them for years to come. At the end of February 2019, a Paris-based criminal court ordered UBS to pay a fine and pay 5 billion Swiss francs in damages because the big bank helped wealthy French between 2004 and 2012 to hide their money from the tax authorities. UBS has moved on. It will take years to reach a final decision. The entire Swiss secrecy policy was installed because of Hitler who made it a crime to have money outside of Germany. Hitler did not invade Switzerland nor did he have his fake court impose huge fines on Swiss banks. Today, governments no longer respect international law. The entire direct taxation is what the Founding Fathers in the US forbid. We are now witnessing the destruction of the world economy and everyone is being hunted globally. The Common Reporting Standard (CRS) is an information standard for the automatic exchange of tax and financial information on a global level. It was put together by the Organisation for Economic Co-operation and Development (OECD) back in 2014. Its purpose was to hunt down tax evasion primarily for the European Union. They took the concept from the US Foreign Account Tax Compliance Act (FATCA), which imposed liabilities on foreign institutions if they did not report what Americans were doing outside the country. The legal basis of the CRS is the Convention on Mutual Administrative Assistance in Tax Matters. As of 2016, 83 countries signed an agreement to implement it. First reporting took place in September 2017. The CRS has many loopholes, for countries have to sign the agreement. This has omitted the United States as well as most developing countries. Note that countries that are included are China, Singapore, Switzerland, most tax havens, and of course Australian/New Zealand as well as Canada. As of 2018, the signing nations to avoid are: Albania, Andorra, Antigua and Barbuda, Aruba, Australia, Austria, The Bahamas, Bahrain, Belize, Brazil, Brunei Darussalam, Canada, Chile, China, Cook Islands, Costa Rica, Dominica, Ghana, Grenada, Hong Kong (China), Indonesia, Israel, Japan, Kuwait, Lebanon, Marshall Islands, Macao (China), Malaysia, Mauritius, Monaco, Nauru, New Zealand, Pakistan, Panama, Qatar, Russia, Saint Kitts and Nevis, Samoa, Saint Lucia, Saint Vincent and the Grenadines, Saudi Arabia, Singapore, Sint Maarten, Switzerland, Turkey, United Arab Emirates, Uruguay, Vanuatu

Casual_Observer
Casual_Observer

Illinois will collapse a lot quicker than other high tax states. Why ? Because they were mediocre to begin with and never a desirable place for anyone outside of the midwest.

2banana
2banana

Q: What is the first that is done when a Chicago public union goon retires after only 20 years on the job with a $100,000+ , OT spiked, tax free on disability pension with free medical for life after voting for democrats his/her entire life?

A: Moves to a low tax, right to work, red state.

Matt3
Matt3

Illinois needs to tax all the pensions of government even when they move out of State. If you're not a government employee, get out of Illinois before they figure out an exit tax system. It has to be coming!!

Realist
Realist

As usual, I suggest Mish should move north to Ontario Canada where the defined benefit public pensions are fully funded, the government is conservative, and there is plenty of wilderness for him to explore all the way to Hudson Bay. He could live in Niagara Falls Ontario and have a two minute drive over a bridge back to the US. Downside: He might need to learn how to constantly say ”eh” and to find a way to be really friendly and polite.

lol
lol

TAXES WILL ALWAYS GO UP.Soaring costs,soaring prices driving all states to raise taxes,every single one, I say again every single state raising taxes.raising fees.Federal Gov't running 2 plus trillion in red ink YOY (at least),so you're complaining bout high taxes now lol...………...ain't seen nothin yet!

BornInZion
BornInZion

Q: What do we call this? A: A modest beginning.

Webej
Webej

HA HA. Here we would pay $ 116.89 for those 15 gallons.

RonJ
RonJ

"Q: What do we call this? A: A start! This is ongoing and it will never stop."

That which cannot continue, won't. A fuel tax was the final straw for the French Gilets Jaunes. The aggregate tax rate in France became 46%. At what rate will one more tax be the last straw for Illinois/Cook County/Chicago tax payers?

There was a story the other day, that French median disposable income was less than in any U.S. state except Louisiana. The more taxes Illinois piles on, the closer to poverty the residents will be driven.


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