Tuesday, April 7, 2015

Rauner: "I'm one of the baddest enemies anybody can have."

Rauner: “I’m one of the baddest enemies anybody can have.” 

Besides his blatant disdain(sd) for conventions of grammar, it would appear from the Tribune’s latest editorial worship of Bruce Rauner, the new vernacularly-challenged governor is also one of the baddest economic leaders we might have provided a mansion in Springfield. 

“Get Ready to Rumble,” the latest promotion in this morning’s Trib provides eight highlights of the governor’s bold plan to change Illinois into an economic Shangri-La and smite his enemies (this would be Indiana and others) in order to reach this dream.  He also promised the Board, “I’m not anti-union…”  Right.

The political world of Illinois according to Bruce, is controlled by insiders -  the kind of people who make deals “for the insiders against the taxpayers.”  Among these inside deals, Rauner identifies “details, the work rules, the regulations, and the laws.”  In truth, those most vulnerable are the ones protected by work rules, regulations, the laws, things like workman’s’ compensation, safety standards, medical assistance programs, fair wage, etc.  The governor's elimination of these impediments to unbridled capitalism seem unlikely to assist the most vulnerable or even those chasing employment and fair pay for a family of four. 

Let’s be honest, Governor, the insiders (like you) are those who gain from the elimination of these very safeguards that have been developed and legally honed and practiced for decades.  Looking at your first series of cuts, indications are pretty strong that the greater number in our state will gain little with the permanent roll-back of the income tax.   

Despite the often-empty promises and vapid strategies – “Our plan will allow us to grow…” – there really is never much description of details for Rauner.  Not of what specifically to do.  Not of what specifically the outcomes might be.  Just a series of warnings, exclamations and down-homey invective:  “I am gonna try to rip the economic guts out of Indiana.”  Nice.  I feel leadership now, how ‘bout you, Dude?

In the economic carnival of Illinois politics, Bruce Rauner comes across like a cross-eyed knife-throwing act.  And his target, the Illinois taxpayer, shouldn’t feel upset about being a nervous bulls-eye for the next four years. 

For Rauner (and his promoters at the Illinois Policy Institute), taxes are causal to all of Illinois’ economic woes.  Which tax?  Why, all taxes.  For Bruce, it’s simple – and it’s all connected (now that he’s an insider).  “New Jersey has done what people want us to do.  They say ‘Just put in a graduated income tax and you’ll fix your problem.’ No, we won’t.  We’ll make it worse…New Jersey has brutally high property taxes, just like us.  They’ve got a high income state that’s being destroyed just like us…out of control, and taxpayers are getting whacked”

According to Rauner’s Turnaround Agenda, supposedly a delineation of his economic initiative but really a manifesto of rants, the primary target for his economic recovery is immediate relief from the local property tax.  “Illinois homeowners pay the second highest tax rate in the nation.  If we want more homeowners in Illinois, we need to address the root causes of high property taxes – too much bureaucracy and mandates that add costs to our communities.”  From hereon, the Turnaround platform links inflated property taxes with forced pension payments, wage/labor agreements, project labor agreements, and a lack of bankruptcy protection for local villages. 

I’m not the best economist, but I don’t see the connection(s) with my current property tax statement.  And I might be wrong, but I do know this:

The states with the least property taxes are hardly the states I’d choose to live in. (Mississippi, Alabama, Louisiana, Wyoming…)  

Let’s be honest, Governor. Neither the attraction to a state nor the level of economic satisfaction for living there can be connected to some ONE item like a property tax.  There’s the personal income tax rate.  There’s the sales and excise taxes.  There’s the state income tax (or not).  There’s the median income level in the state.  There's the levels of long term inflation-adjusted income.  There’s the question of a state’s income inequality. And there’s a host of other tangibles (one being services for the people). 

According to Kiplinger, Illinois is not the second worst property taxed state, but it does show that a median payment for property taxes in Illinois is a hefty $3507.  Ouch!  But, then again, the median price for a home in Illinois is $202,200.

Some of your model better states – as far as property taxes, Governor – run a bit less for a median home purchases.  Mississippi pays only $508 in property taxes, with housing median priced at a paltry $98,000.  Louisiana pays only $243 on median housing of $135,400.  Alabama pays $398 on median housing of $119,600. 

On the other hand, I don’t want to be accused of cherry picking, Governor, so a state like Nevada with a median home price of $207,600 pays a property tax of only $1749.   And no income tax…but Nevada has several variations on a money making scheme we haven’t.  Guess?  I’ll give you odds.

Thus, a real economic plan is always more than just a mix of rants and irate connections redirected always to pensions or minimum wages or even workman’s compensation, isn’t it?   For example, that good-lookin’ state Nevada has also experienced a 27.7% decline in median income levels since 2000. 

Looking at total effect of all levels of taxation in all states, CNN/Money.com places Illinois 29th in a field of 50.  Indiana, innards still intact, comes in at 33rd. 

Let’s be honest, Governor.  When Director Ralph Martire of the Center for Tax and Budget Accountability explains just how a graduated income tax may help us to climb out of a deep and systemic structural revenue problem, because he knows that it will take a number of carefully thought-out and calculated strategies to correct the problems the state faces, he is not saying, “it’ll fix your problem.”  Not at all.  

When Senators like Don Harmon or others wish to discuss alternatives; perhaps, it's because they've been around, seen things, and have a sincere interest in helping the state of Illinois out of its fiscal irresponsibilities.  Maybe, just maybe, they're not insiders.

I wouldn’t dismiss any of these ideas so quickly.  Maybe things ain’t so simple.  And that, Governor, is just about the bestest advice I can give you.

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