Tax Relief for Illinois and a Revenue Fix!

Tax Relief?  Here’s a “Fair” Explanation…

I just received my latest update from Republican Representative Dwight Kay.  Representative Dwight may look like Wally Cox of days long past, but don’t think for a minute he is the mild Mr. Peepers of film fame or anything quite like it.  Instead, think formidably and forever right, as in terminally right.

Falling into line with the other Republicans in the General Assembly when responding to the move to create a “fair” tax in Illinois, Dwight reported, "Illinois is already a high-tax state. Raising taxes on middle-class families will further damage our state's economy. History has shown that the 67% income tax hike has not balanced Illinois' checkbook nor will it bring in more long-term revenue. A graduated tax certainly won't solve the spending problem in state government. It would do more harm than good for Illinois," (State Rep. Dwight Kay, R-Glen Carbon 2/11/14).

For Dwight Kay, making the simple complicated is purposeful.  Like many opponents of a Fair Tax, his explanation would fuse various issues into a combined soup which muddies possible solutions.   

Indeed, trying to decipher Representative Kay’s concern about the monolithic peril posed by a fair tax requires some parsing of his artfully deceitful language as well as some facts, something Republican legislators seldom employ in their crafty messages about this issue to constituents.

Will a fair tax really result in raising taxes on the middle class in Illinois as Rep. Kay warns adamantly?

That might be answered by finding the true middle class in Illinois, at least as in household earning.  We might look at averages, but that might place an area like Oak Park next to Melrose Park, and the results would be skewed by such significant differences to render an answer indecipherable.  Best to look at Illinois’ median earning per household.  That would be a number that would represent a balance between the 50% above and the 50% below in totality.

That would be the Middle Class – in Illinois (and very closely to the national average). 

Even that number is not pleasant to look at, for that median has been falling.  Nevertheless, the median income per household in Illinois is now $55,137, down 4.56% in the last 3 years.   Per capita income (by person) in Illinois is not much better:  $28,741 per year (down 4.01% over the last 3 years).   As the Bureau of Labor Statistics affirms, things are tough out here for the Middle Class, Representative Kay.  

Looking at the current income tax structure of Illinois, one not likely to be rescinded, a look at the proposed FAIR Tax proposal proposed by Better Illinois would make these differences for a Middle Class earning family in Illinois.  Here are the increased savings for various wage earning levels, measured as a difference with the current flat tax.  I start with the median Illinois earnings span.

Earning between $36,000 and $58,000 = Savings of up to $540 per year.

Earning between $0 and $18000 = Savings of up to $360 per year.

Earning between $18,000 and $36,000 = Savings of up to $600 per year.

Earning between $58,000 and $95,000 = Savings of up to $170 per year.

It would seem that despite Representative Kay’s dire warnings, the “middle class” in Illinois might actually benefit from tax relief with a Fair Tax. 

Perhaps Representative Dwight’s perception of what constitutes the Middle Class is a bit askew?  After all, the actual median family would benefit under the current proposal for a Fair Tax Amendment.  Is there a point at which a Fair Tax would create an increase in income taxes for a household?  Where is that point?

Answer: Somewhere just north of $122,000.

That must be Representative Kay’s understanding of the Middle Class in Illinois. 

Not on my block, Representative.

And what might that fair tax relief possibly bring to the authentic middle class in Illinois?

·     Some relief to a food bill of nearly $900 a month for a family of four in Illinois?

·      Some relief to the cost of nearly $900 to operate an auto to work in Illinois each year?

·      Assistance in the preparation for children for public school at a cost of $800 on average for clothing and supplies?

C’mon, Representative.  What Middle Class do you guys represent?