Tag: Wirepoints

Mass Federalization: How Washington is Bailing Out Failed States, Decapitating Competitive Ones and Ending America As You Knew It – Wirepoints

Mary Pat Campbell

Link: https://wirepoints.org/mass-federalization-how-washington-is-bailing-out-failed-states-decapitating-competitive-ones-and-ending-america-as-you-knew-it-wirepoints/

Excerpt:

Don’t think that might ease your state and local tax burden. The downpour of cash on cities and states, most of which don’t need it, is all tied to a provision in ARP that bans tax cuts. It’s a mandate for statism – big government – whether states with small government philosophies like it or not.

“Thou shalt be statists and big spenders” – that’s what ARP might as well say as a direct federal mandate.

Most of ARP commentary about cities and states has wrongly focused only on the $350 billion that’s will go directly to them. That’s a small part and entirely misses the bigger picture.

Author(s): Mark Glennon

Publication Date: 22 March 2021

Publication Site: Wirepoints

WalletHub, Tax Foundation confirm what Illinoisans already know: they’re overtaxed – Wirepoints

Mary Pat Campbell
WalletHub, Tax Foundation confirm what Illinoisans already know: they’re overtaxed – Wirepoints

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Two separate 50-state comparisons of state and local tax burdens released this week confirm Illinoisans pay some of the nation’s highest taxes. 

WalletHub, the personal finance company, calculated that Illinoisans pay the highest effective tax rates in the country. A more comprehensive study by the Tax Foundation, a non-partisan think-tank, says Illinoisans pay the nation’s 10th-highest tax burden.

Either way, their findings validate what Illinoisans instinctively know: they’re overtaxed.

Author(s): Ted Dabrowski and John Klingner

Publication Date: 12 March 2021

Publication Site: Wirepoints

Illinois’ record-setting pension debt jumps to over $300 billion – Wirepoints

Mary Pat Campbell
Illinois’ record-setting pension debt jumps to over $300 billion – Wirepoints

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The state assumes the pension funds will continue to earn an average of nearly 7 percent a year, while Moody’s lowered its assumptions for 2020 to just 2.7 percent: “the FTSE Pension Liability Index, a high-grade corporate bond index Moody’s uses to value state and local government pension liabilities, fell to 2.70% as of June 30, 2020, from 3.51% the prior year.”

Moody’s also reported that the asset-to-payout ratio for the state’s funds are now equal to about seven years’ worth of payouts.

That’s down compared to Wirepoints’ report on asset-to-payout ratios we released last year in this report: COVID-19 pushes nation’s weakest public pension plans closer to the brink: A 50-state survey. 

Author(s): Ted Dabrowski and John Klingner

Publication Date: 4 March 2021

Publication Site: Wirepoints

Illinois Speaker Welch admits ‘folks don’t trust us,’ yet calls for redo of progressive income tax hike – Wirepoints

Mary Pat Campbell
Illinois Speaker Welch admits ‘folks don’t trust us,’ yet calls for redo of progressive income tax hike – Wirepoints

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Illinoisans who thought new House Speaker Chris Welch might change the direction Illinois is headed in just got a dose of reality. Welch recently said he wants Illinois to have a second go at a progressive tax scheme, this time committing the tax hike proceeds to pensions. Illinoisans rejected Gov. Pritzker’s first attempt, he said, because they didn’t know where the tax hike dollars would go. “…folks don’t trust us,” Welch said. 

Welch is right about the trust factor, but he’s wrong to think Illinoisans will suddenly approve a tax hike just because the legislature promises to funnel the new revenues to pensions. They know it’s unlikely politicians will keep their promise. And Illinoisans know the state’s unreformed pensions are a corrupted mess – that they’d be throwing good money after bad.

Author(s): Ted Dabrowski and John Klingner

Publication Date: 2 March 2021

Publication Site: Wirepoints

Jumping the COVID vaccination line: the next casualty of common sense – Wirepoints

Mary Pat Campbell
Jumping the COVID vaccination line: the next casualty of common sense – Wirepoints

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The state’s current vaccination category, 1B, includes the 1.9 millions over the age of 65, as well as the 1.3 million younger people who are first-responders or “essential workers” such as teachers, grocery store workers and transit workers. To date, about 150,000 Illinoisans aged 65 and over have been fully vaccinated, while nearly 390,000 residents aged 16-64 are already inoculated.

But groups both inside and outside that list have been demanding they take top priority. Everyone from politicians to teachers to bartenders to transit workers to librarians and more. That is patently absurd. There are a limited number of vaccines and if everybody is at the front of the line, then no one is. That’s why getting the elderly vaccinated has been so problematic.

…..

As long as we’re vaccinating the line jumpers who are younger than 60, we’re vaccinating the wrong people. Every needle in the arm of a younger Illinoisan – barring frontline health care workers – leaves an elderly Illinoisan at great risk.

Author(s): Ted Dabrowski and John Klingner

Publication Date: 22 February 2021

Publication Site: Wirepoints

Great news in Illinois on COVID is going underreported, and so is the primary reason – Wirepoints

Mary Pat Campbell
Great news in Illinois on COVID is going underreported, and so is the primary reason – Wirepoints

Excerpt:

Vaccinations, obviously, are starting to make a difference. Over 2.1 million of Illinois’ 12.7 million people have had at least their first vaccination. That’s about 17% of the state.

But something far bigger is at work: the huge number of Illinoisans who have acquired natural immunity because they were already infected, mostly without knowing it. That’s probably over 7.6 million Illinoisans – about 60% of the state.

How can that be? It’s because the actual number of infections is about 6.5 for every reported case because most cases go unreported. That’s the current number used by Marty Makary, a professor at the John Hopkins School of Medicine, who wrote in the Wall Street Journal last week. Illinois has about 1.73 million reported cases, so you just multiply that by 6.5.

The virus, in simple terms, is finding nowhere to go. Far over half of its potential victims are either naturally immune or have been vaccinated.

Author(s): Mark Glennon

Publication Date: 21 February 2021

Publication Site: Wirepoints

Memo To Congress Re Pending Aid To States: America Cannot Bail itself Out – Wirepoints

Mary Pat Campbell
Memo To Congress Re Pending Aid To States: America Cannot Bail itself Out – Wirepoints

Excerpt:

In all the debate about the pending federal aid package for cities and states, you’d think something so obvious would have been said often, but it hasn’t been: America cannot bail itself out.

Bailing the nation as whole out is exactly the idea behind the $350 billion package of federal aid proposed in the American Rescue Plan now pending in Congress. It would provide $220 billion to state governments and $130 billion to local governments.

The allocation is based on population – so far, at least, in the pending bill. For example, Illinois has about 3.9% of the nation’s population, so it would get about $13.6 billion of state and local money, which is about 3.9% of the $350 billion.

Author(s): Mark Glennon

Publication Date: 17 February 2021

Publication Site: Wirepoints

The states’ 2020 financials are in: Biden’s billions in new federal aid aren’t needed – Wirepoints Special Report

Mary Pat Campbell
The states’ 2020 financials are in: Biden’s billions in new federal aid aren’t needed – Wirepoints Special Report

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States like Illinois, New York and California have long histories of financial negligence. California ran a budget deficit during seven of the last 16 years, according to a Wirepoints analysis of Pew Charitable Trust data. Connecticut has 10 years of deficits to its name. New York has 11. And Illinois and New Jersey have run budget deficits every year since at least 2004.

And then there’s the problem of pensions. States like Illinois, Connecticut and New Jersey all have amassed hundreds of billions in pension debt – all self-inflicted by state lawmakers.

The pandemic had nothing to do with those past deficits and debts, but that’s exactly what more federal aid would end up paying for.

Author(s): Ted Dabrowski and John Klingner

Publication Date: 16 February 2021

Publication Site: Wirepoints

Big Tax Cut For The Rich Sought By Illinois Progressives In Congress – Quicktake

Mary Pat Campbell
Big Tax Cut For The Rich Sought By Illinois Progressives In Congress – Quicktake

Excerpt:

Illinois Senators Dick Durbin and Tammy Duckworth, as well as Illinois Rep. Brad Schneider, are leading the charge to repeal the cap on state and local tax deductions, as reported by Crain’s and elswehere. They’ve each sponsored bills to eliminate the SALT cap, as it is called, which became law in 2017.

That cap of $10,000 on deductibility of state and local taxes, including property taxes, walloped many high income taxpayers not just by increasing their federal tax bill but by reducing the value of homes they own. We described the research showing that in our recent article here.

There’s actually no debate about it: Liberal and conservative tax experts alike agree that the eliminating the SALT cap would be a windfall for high earners. The conservative Tax Foundation explained why here, and the liberal Institute on Taxation and Economic Policy, ITEP, wrote this in an article opposing elimination of the cap:

Author(s): Mark Glennon

Publication Date: 2 February 2021

Publication Site: Wirepoints