Illinois Raising Taxes Again
- Thread starter wvkeeper(HN)
- Start date
Illinois should lower taxes like Kansas, but since Illinois is in more debt, Illinois should enact steeper tax cuts to make up for it. The sooner the better. 
Unfunded pensions come due at some point.
Really unreal how the actuary/politicians were allowed to pass these pension plans with insane projections and leave the next generation holding the bag.
Really unreal how the actuary/politicians were allowed to pass these pension plans with insane projections and leave the next generation holding the bag.
As I recall Oregon’s and maybe Illinois were set up with an 8% estimated return and I believe almost 1% active under management fee.
So dumb.
So dumb.
For all the complaining I have heard about Illinois taxes, I am surprised their top rate is actually lower than some surrounding states. Especially Wisconsin, with its proximity to Chicago...I'd say Indiana is a great deal for a Chicago commuter, but quite a bit of that part of Indiana is sketchy AF.
They’ll just kick the can down the road like most politicians. Putting the growth estimates back to 4-5% and asking for more contributions and or decreased pay outs is political suicide...
And in Oregon I believe their Supreme Court ruled it illegal to decrease pay outs...so you have limited options here.
Moral of the story:
1. If it sounds too good to be true (ie retire after 25-30 years with 1/2 your salary for life) it is
2. When the government says it will cost X they usually grossly underestimate and get it all wrong
As an aside - I don’t blame the teachers or non politician govt workers for wanting their pensions ...they were promised it.
But absolutely the blame should be on the politicians or party that voted for this and did zero due diligence or responsibility to see that this was fiscally sustainable.
But absolutely the blame should be on the politicians or party that voted for this and did zero due diligence or responsibility to see that this was fiscally sustainable.
I wonder why he’s not bitching about Iowa’s high rates (already high and have been)?
I have a bachelor 30’s friend that works in Indiana but lives in Chicago downtown. He says very sketchy.
Chicago is a fantastic city though if you have money, especially if you luck into a mild winter.
I think Cook Co has like a 10-11% sales tax rate as well. So my friends there complain about local and state taxes .
Iowa I too am surprised it’s that high.
In the new era of no state tax deduction you will hear more and more bi*ching about state taxes now.
The cheetos tax cut of over a trillion bucks could have eliminated all 50 state's debts.
I’m not a constitutional scholar but I’m not sure if it’s kosher for the federal government to bail out a poorly run/conceived state pension plan.
I may be wrong about that but the federal tax plan seems like a different issue at hand here.
A lot of people had a problem with that, both sides of the aisle to some degree. I had a problem with it - privatizing gains, bailing out losses.
But this is state vs federal government issues which I suspect there’s more case law or precedent for I’d guess. Again, I’m no scholar on this stuff though.
I don't know the law either, but I suspect if we can bail out banks, automakers, coal mining, and foreign countries, then the federal government can help states.
I remember back in the early 90s Gary IN got so wild the governor sent in 100 State Troopers to get shit under control. Just as in many states, you don't fvxk with the state troopers here, they will beat your ass.
I agree about Chicago. I like to visit downtown there. Mild winter is subjective, a mild winter there is still pretty damn cold.
The big issue is that the people on the hook, the taxpayers, don’t have a seat at the table when these pensions are negotiated. The politicians want elected and the government workers want unbelievable benefits. In turn you get politicians that give the unbelievable benefits to get elected by the workers that vote them in office for that reason. Why would they care, they won’t be around when its time to cash in on those promises.
The negotiations should involve the politicians, the workers, and an independent/nonpolitical representative to make sure taxpayers interests are protected.
The negotiations should involve the politicians, the workers, and an independent/nonpolitical representative to make sure taxpayers interests are protected.
Do you honestly believe that? You honestly believe teachers and other public employees are getting “unbelievable benefits?”
do you honestly believe teacher and other public employees go into the government sector because the pay is so good? if not the pay, then what? you're crazier than hell if you think for any other reason than bennies.
My wife is a teacher. Her benefits are better than mine. Her retirement system is better than mine. Absolutely.
Simpe solution.....if you promise the benefits, you pay the benefits. You raise taxes enough to do so and stop whining.
From my point of view it's not necessarily that the benefits in and of themselves are "unbelievable," but it's how these benefits were planned for/accounted for.
If you're going to offer a good benefits package, then you better have the public (or payer) aware of what long term taxes or contributions will be necessary to fund such a package. In the case of many of these states their projections/accounting was not even close to the point where it's more than just a missed calculation, it's negligence. Suggesting guaranteed 8% growth while paying an additional 1% under management fee is not a responsible way to design a portfolio.
So then you've got future generations funding disproportionate amounts to a system they will never get to see themselves because previous politicians negligently set up a system with no mechanism to pay for it. So then you get "whining" as green says.
You'd have to raise taxes to somewhere around 40-50% on all Illinois residents to come close to meeting the unfunded pension liabilities.
From my own personal view I looked long and hard at a couple of academic medicine appointments. One of the major selling points is the pension (with the director of the Oregon health sciences system retiring with a 72K/month pension). You make less than the private sector, but if you put in your 20-30 years the pension benefits can nearly make up some of the difference depending on some factors.
So I took a deep dive into some of these state pension plans and thought they were not sustainable. I don't know how they get fixed but I'm sure high earners will be first on the chopping block. Some of my friends in academics save extra on top of their pension for retirement because they're nervous and they should be.
yeah, that's great. screw everybody because the government screwed up and gave unreasonable benefits to the few.
Or stop lying to them and stop passing the buck to future generations and making promises that are unrealistic.
Increase Illinois tax revenue by 10% for 20 years and the public pension short fall is remedied.
What do you mean "by 10% for 20 years...."
To make the math easy, do you mean if they were collecting 100 dollars per year in 2017 if they just collect 110 dollars in 2018-2038 it'd be OK, or does it need to go up 10% every year?
Bumping revenue by 10% in one year is incredibly aggressive though. It could be done (as noted above), but to get that kind of revenue increase your rate increase has got to go up substantially or somehow you've got to widen the base/grow the economy a large amount quickly.
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It would require an average of $1100 per year tax increase per person in the illinois work force for the next 20 years. Done.
Gotcha.
But we all know I'd bet probably a third (?maybe more?) of them have zero way to come up with $1100. I don't know what it is on a state level, but on a federal level I think about 40% of people don't pay any federal taxes.
So while the per person number makes for easy math you can probably double (?or triple?) it for actual tax payers to get that revenue increase. Compound that with not then being able to deduct that on your federal taxes and that's a pretty massive tax increase.
It is what it is though like you've said; they've got a massive liability and have got to figure out a way to get it covered. Like we've talked about, it wouldn't surprise me if the feds stepped in.
It's a mess. Good luck getting elected on either side with:
1. OK, we can fix it but your state taxes (now non deductable) are going up four figures.
2. OK, we can fix it but all public employee pensions are being cut four figures. Yeah - the ones we promised you would be there. About that promise....
1. OK, we can fix it but your state taxes (now non deductable) are going up four figures.
2. OK, we can fix it but all public employee pensions are being cut four figures. Yeah - the ones we promised you would be there. About that promise....
I feel this is incorrect because it ignores the reason behind promising future benefits: taxpayers are too cheap to pay many public workers a market wage, and politicians are too chickenshit to explain this to taxpayers. So politicians kick the can down the road and make no attempt to tell cheap-ass voters (taxpayers) the real truth.
This applies to the majority of government budget decisions. No one is willing to speak or hear the hard truth.
Legalize weed and tax beer an extra 50 cents a can...given the number of black weed smokers and Polock beer drinkers in the Chicago, the problem will be solved in no time.
