THE EXPORTING OF ILLINOIS FEDERAL TAXES - For The Good Of Illinois

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THE EXPORTING OF ILLINOIS FEDERAL TAXES
By: For The Good Of Illinois | Category: Editorial | Published: 1/13/2008
Views: 505 | Comments: 6 |

THE EXPORTING OF ILLINOIS FEDERAL TAX DOLLARS

January 14, 2008
Adam Andrzejewski

Part One in an ongoing series-
ILLINOIS: THE FUTURE “MAGNET OF AMERICA”™

What would the people of Illinois need to do to reverse our downward slide in job creation, economic vitality, education and population growth? How could Illinois become the “Magnet of America”™?

Solving the financial relationship between Washington, D.C. and Springfield needs to be our first priority: the #1 Illinois export is our federal tax dollars. While Illinois sends $89 billion to Washington, D.C., we receive only $65 billion in federal assistance. The difference of $24 billion represents the Illinois export of our federal taxes to the rest of the nation. This is an amount that equals 41% of the $59 billion Illinois state budget. The $24 billion loss has a staggering impact on our families and communities.

This inequality costs each man, woman and child in Illinois $1,800. The cost to Elmhurst, a community of 37,000 residents, is a staggering $66 million. The cost to a family of four is $7,200. With the median wage in Illinois being $49,000, a wage-earner with a family of four loses the income of two work months or has to work overtime for a year just to make the $7,200.  The loss of money and time to an already fiscally stretched and busy citizenry is ruinous to Illinois families and communities.

Illinois tax payers are required to send their dollars to other states while real problems exist at home. Currently, families and businesses are experiencing the troubles associated with Illinois being a ‘donor’ state. Illinois has been a funding vehicle for national growth while lagging the nation in job creation, economic vitality (gross domestic product), education, and population growth. Meanwhile our state, county and local government debts have grown to record levels of over $106 billion. With a gainful return of Illinois federal tax dollars, all of these needs can be met.

With even a partial return of the Illinois donor funds, we would have no need for gambling with it’s attendant problems. Gas prices are certainly high enough, and the Illinois gas tax could be eliminated. The 2,084 fees that are levied throughout all levels of Illinois government could be rescinded. The imagination holds no bounds in the creativity to reduce the grinding footprint of Illinois government taxes.

With a breakeven return of $24 billion in our federal taxes, Illinois could eliminate the state income tax ($11 billion) and nearly eliminate the state portion of the sales tax ($14 billion). Alternatively, if the $24 billion were deposited into the general fund of the state, Illinois could issue citizen rebates. Our thirteen million Illinois citizens would each receive $1,800.  Even the most hardened pessimist can imagine the instant rise in the vitality of our state with the vaporization of the Illinois donor tax burden! The heavy boot of confiscatory federal government taxes- of which there is no Illinois benefit- would be lifted.

Illinois would instantly become the “Magnet of America”™.

Becoming the “Magnet of America”™ is not a fairy tale. Half of the states run a surplus of federal tax monies returned to them. In fact, our neighboring states fair much better than we do. Illinois is returned $.73 back on every dollar sent to the federal government. Indiana is returned $.97. Iowa is returned $1.11. Missouri is returned $1.29. Kentucky is returned $1.41.

Illinois- as “Magnet of America”™- is a state that would attract businesses, create jobs, and support investment in education and families. The hard work, generous spirit and courtesy of Illinois people would finally be matched by the policies of Illinois government.  Our fellow Illinois citizens' common decency and Midwestern manners would find more of a home in Illinois government. The explosion of Illinois economic activity would be the economic shot ‘heard around the world.'

Why haven’t our Senators Richard Durbin and Barack Obama- of national renown and rank, taken steps to rectify this conspicuously bad situation?
Why is it that no one at the podium of power in Illinois government is talking about this?

Let’s make Illinois the “Magnet of America” ™
For The Good Of Illinois.

Comments

On 1/15/2008 Adam Andrzejewski said:

If Illinois is beaten by 16 states and it's a deadheat with 6 other states, then Illinois is very close to the middle of the pack on income. In any event, by your analysis or mine, Illinois certainly is not a "rich" state. And the effects are real- we are 45th in job creation over the last 3,5, and 10 years. Think of the economic stimulus that Illinois would receive with a "fair" amount of our federal taxes back in the state! New York did it and so can we...

On 1/15/2008 Clay said:

Adam, If Illinois ranks "only" 16th (out of FIFTY states), then, it's in the top third of median income in the U.S.. Therefore, to answer your question again, the reason nobody is talking about it is due to party ideology. Democrats will not reduce taxes on those with higher incomes - perceived or real.

On 1/14/2008 Adam Andrzejewski said:

Dear Clay: Your post seems to be what most folks believe about tax policy in Washington DC. However, Census Bureau stats do not back this up. As one example, Illinois only ranks 16th in median income per household plus 6 more states are statistically equal to Illinois household income. Therefore, 22 states in America either beat or are equal to Illinois. We are not a "rich" state. We are ranked 45th in the return of our federal tax dollars. Now, why isn't anyone in Illinois government talking about this??

On 1/14/2008 Clay said:

Adam, The reason Obama and Durbin don't say anything is because it would be against Democrat idealogy. It cuts taxes to the richest states and increases the burden to the poor. More income = more taxes. The states with the highest return are those that pay the least, right? and vice versa. That's simply the way taxation works. It's like saying "I make $100k and pay $30k in taxes. I have problems with my roof, so, I'll just keep half of it for repairs and those poorer folks will just have to find money elsewhere. I got problems of my own!"

On 1/14/2008 Adam Andrzejewski said:

Dear Jay: The other day I was visiting Dr. John Howard in Rockford, IL. Dr. Howard holds large binders of his handwritten correspondence with two Presidents. He told me that the best hoped outcomes in politics are making “dents”. Although I do believe that transformational change can be accomplished, his wisdom stands the test of time. Within that construct- I wrote this editorial. The purpose of the editorial is to describe the scope of the problem in real terms that Illinois families can appreciate! It sounds like you received that message loud and clear. Yes, your family’s share of the Illinois donor tax problem is $9000! Since our donor status completely unfair to Illinois- ranking us 45th in the country- we need to start the process of evening up the situation. Just a 10% improvement in our relationship with the feds would bring $2.4 billion back to Illinois! And it is our money. A real question for consideration is… Sen. Durbin is the 2nd highest ranking Democrat in the Senate and Sen. Obama is supposed to be a superstar, why aren’t they representing the interests of Illinois? In the 1990’s, New York faced the same tax donor situation. Sen. Moynihan made the issue public and personal for New Yorkers and improved the problem- over the course of time for New York. Why isn’t anyone in Illinois government talking about this?

On 1/14/2008 Jay Pauer said:

So we want to be more like Kentucky? Queue the banjos. I understand the problem as you present it, but I'm not sure I understand the potential solution. Are you arguing that Illinoisans should pay lower federal taxes or that Washington should cut us a bigger check? And whatever the answer, who then bears the burden of the depletion of the $24B (not Illinoisans, I get that - but can we then stick it to Kentucky? As you can see, I have real disdain for Kentucky...)? I sure could use an extra $7,200 right now...actual I've got a household of five, so my take would be $9,000k right? I just want to know how I'm going to get it, and what's NOT going to get funded in order that I might revel in my fare share? Ever the Pessimist, Jay