Jim Dey | Tax-burden question is intensely personal

Jim Dey | Tax-burden question is intensely personal

Liberals (Democrats) and conservatives (Republicans) don't agree on much.

But one thing they probably agree on is how much they disagree on taxes — how high or low they are, how much they should be raised or reduced.

Take the federal income tax cut bill Republicans just passed in Washington. Republicans hailed it as a badly needed economy-spurring boost for individuals and businesses, while Democrats denounced it as a sop to the rich that would provide only, as House Democratic Minority Leader Nancy Pelosi put it, "crumbs" to regular folks.

That you-see-things-one-way-and-I-do-the-other between ideological opposites came home to Illinois this week during a legislative hearing in Chicago.

Lawmakers gathered to discuss a plan to borrow billions of dollars to restructure the state's $130 billion-plus public pension debt. That's where Republican state Rep. Grant Werhli, a conservative from Naperville, got into it with liberal Ralph Martire, who heads the Center for Tax and Budget Accountability.

Rep. Wehrli complained that taxes in Illinois are too high while Martire disputed his assertion.

Are too. Are not.

Readers can quickly figure out the dynamics of the debate.

Werhli and Martire disagree, and each can cite reasons and studies that back their positions.

So what do readers think? Are their taxes — state income tax, state and local sales taxes, property taxes and all the other taxes that go with daily life — too high, too low or just right?

The answer depends on how much one has to get by after paying taxes and all the other bills.

Based on that deeply personal viewpoint, many people feel their taxes are too high and everybody else's taxes are too low.

The study cited by Werhli was conducted by 24/7 Wall Street. It reviewed individual tax burdens in each state and found:

— Illinois residents pay an average of 11 percent of their income in state income taxes.

— They have per capita earnings of $51,817. That's the 15th highest in the nation.

— They pay per capita $1,237 in income taxes, 11th highest in the nation.

— They pay $2,007 per capita in property taxes, 10th highest in the nation.

— They pay $696 per capita in sales taxes, 17th lowest in the nation.

On the scale of lowest (Alaska) tax states to highest (New York), Illinois had the fifth highest. It trails only California, New Jersey, Connecticut and New York.

Of the states that surround — and compete with — Illinois, Iowa ranked 25th, Michigan 26th, Indiana 27th, Kentucky 29th and Wisconsin 45th.

Martire's disagreement with Rep. Wehrli is based on figures generated by the Federation of Tax Administrators.

It showed that, in 2015, all taxes collected in Illinois added up to $94.6 billion, which represented 15.1 percent of all income. That ranked Illinois 27th highest of the 50 states.

"If you're in the bottom half of all 50 states, you do not have a high tax burden," Martire said.

He said "many studies get it wrong" for a variety of reasons, like including federal income taxes paid, focusing on per capita figures that ignore large divergencies, ignoring fees common in some states and focusing on tax rates rather than taxes paid.

Statistics, of course, don't mean much to those who judge the total tax burden by how it affects them.

The bottom line is that Illinois has far more ordinary income earners (lower-middle class, middle class and upper-middle class) than "millionaires and billionaires" the politicians love to denounce.

With slightly more than 6 million taxpayers in 2013, according to the Illinois Department of Revenue, just 105,000 reported incomes of between $400,000 and $25 million, the type of cash that would leave plenty left over after taxes.

About 2.2 million Illinois taxpayers earned between $50,000 and $200,000, leaving a lot less left after taxes than their upper-income counterparts.

Where one stands depends on where one sits — at the big money table or the kids' table.

So based on their seat at the table and regardless of tax studies, what's the answer — do readers feel overtaxed, undertaxed or taxed just right? Think about it.

The issue is a big part of what this year's gubernatorial race is all about.

Jim Dey, a member of The News-Gazette staff, can be reached by email at jdey@news-gazette.com or by phone at 217-351-5369.

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David Green wrote on February 22, 2018 at 11:02 am

Post-modernist subjectivist Jim Dey obfuscates the reality of our tax system by reducing it to a matter of he said she said. But at least he allows Martire to shed some light on the matter. People are supposed to not like paying taxes, but they often like what the government has to offer them. Do you want to buy every book that you read, or would you like the option of getting it from a public library?

The top 10% of earners make close to 50% of the income. But they pay a lower percentage of their income in state and local taxes combined, in this state, than the poorest. That's where the money is, plenty of it, no matter how Dey tries to obscure that with his own careless and dismissive approach. The fact is, he doesn't like it when the government tries to provide services that people want and need, and are willing to pay for if the tax system is fair (meaning progressive) and if they services are provided efficiently.