Found this on WTTW on Monday, August 24th:
Jack Franks
“’Tax loopholes’: it’s a nebulous phrase that often gets tossed around, but nobody really knows what it entails.
“Chicago Tonight has learned that a new bill will be filed, perhaps this week, by Democratic state Rep. Jack Franks.
“According to Franks’ estimates, that bill would close $3 billion in loopholes and will bring in new revenue without cuts or tax hikes.”
And, then, there was this:
“…House Speaker Michael Madigan is heavily supporting this effort…and has met with Franks multiple times to discuss the bill.”
Details?
“A big one would involve a change in the way the state collects income tax on corporations. In fact, it would be a reversion to the way the state used to collect the money up until 1996.”
Since that would cost business more, they are opposed.
The article continues,
“Franks also says he has a litany of other loopholes and tax breaks he wants to close that would add up to $2.9 billion.
“He’s proposing to end subsidies for ethanol production in Illinois and that could bring in $120 million.
“More efficient management of the Illinois lottery, he says, could net hundreds of millions, and he proposes an end to a $32 million tax break that newspapers receive on the purchase of ink.”
= = = = =
This move by Jack Franks reminds me of a disagreement I had with my father about U.S. Senator Paul Simon.
My Dad was enamored by Simon’s support of a Balanced Budget Amendment.
“That’s fine, Dad,” I told him, “but you know that Simon would balance the budget by raising taxes, right?”
Sounds a lot like what Jack Franks is proposing.
Everyone in Springfield knows that taxes have to be part of the budget solution.
Rauner has even acknowledged this.
You only have to look as far as Rauner’s proposed budget – which, even though he attempted to cut $4B (much of which was/is illegal), he also included $2B in phony pension savings that would be unconstitutional.
So, IL has a choice. Who is going to pay the taxes?
You can raise a the flat income tax and disproportionately hurt low- and middle-income families.
Or you can shift the burden through things like closing corporate tax loopholes, or even a graduated income tax structure.
I don’t like Jack Franks much, and I agree with him rarely.
But he’s right on closing corporate tax loopholes.
You aren’t raising taxes if you close a loophole for a tax break.
Lol
This is such a disingenuous and semantically flawed headline.
Closing a tax loophole is obviously a tax hike to the people whom are affected as the result is additional tax revenue to the government.
How about closing the hundreds of loopholes in the Illinois Pension Code.
But unless the pension sentence added to the Illinois State Constitution on December 15, 1970 is repealed in its entirety via constitutional amendment, closing those loopholes would only apply future workers.
Here is the referenced WTTW article that includes a video interview.
WTTW
Chicago Tonight
Third Way Out of State Budget Impasse Emerges
– Change in Corporate Income Tax Floated
by Paris Schutz
August 24, 2015 11:54 am
http://chicagotonight.wttw.com/2015/08/24/third-way-out-state-budget-impasse-emerges
As a note according to IEFC (the predecessor to COGFA) it was Ryan not Edgar that made the change to single sales tax factor in the state corporate income tax.
Edgar had vetoed the change.
Illinois Economic and Fiscal Commission
Illinois’ Corporate Income Tax
July 2002
“In 1998, Governor George Ryan signed into law P.A. 90-0613, which created the single-sales factor.
Under the single-sales factor, corporate income taxable in Illinois is determined solely on the basis of a company’s in-state sales.
(A detailed analysis of the single-sales factor is discussed later on in the report).
The process of phasing in the single-sales factor began in 1998 and was completed at the end of 2000.
It was phased in using the following schedule.
Tax Year 1998: Sales: 1/3 Payroll: 1/3 Property: 1/3
Tax Year 1999: Sales: 2/3 Payroll: 1/6 Property: 1/6
Tax Year 2000: Sales: 5/6 Payroll: 1/12 Property: 1/12
Tax Year 2001: Sales Only”
http://cgfa.ilga.gov/Upload/IL_Corp_Income_Tax.pdf
And the corporate stampede out of the State will continue.
Meanwhile, they’ll spend millions trying to attract business back to the State.
Such shrewd Public Policy.
Well if it was Edgar or Ryan where were the righties when this happened?
If people think taking tax loopholes away is unfair then it is unfair when a working person pays a higher percentage in taxes than a person with hedgefunds. (Romney)
Nah, government shouldn’t subsidize ethanol and newspapers should pay tax on ink just like I pay taxes when I buy a pen. Working families have to pay taxes on groceries. It’s one thing to want everybody to have lower taxes, it’s another one to defend regressive policies that aid big businesses and leave regular people trying to pick up the tab. The real injustice isn’t treating some big entity like regular citizens, but that these entities with lots of money lobby and buy favors from legislators in the first place. Republicans should be on board with this, since what Franks is advocating here is really just flat taxation, and ending subsidies should be applauded by people who believe in free markets.
Regarding the law passed in 1998 that changed the corporate income tax.
There were two main changes.
1. Change to a single factor (sales), in the process dropping property and payroll as factors.
2. Only in state (not out of state) sales were subject to the corporate income tax.
That again was Public Act 90-0613 (PA 90-0613), which was House Bill 2363 (HB 2363).
Two of the sponsors of HB 2363 were Barbara Flynn Currie and Terry Link.
The bill that passed made changes to included legislation in addition to corporate income tax.
http://www.ilga.gov/legislation/legisnet90/summary/900HB2363.html
It just occurred to me that Edgar was the Governor in the 90th General Assembly.
Ryan was the Governor in the 91st General Assembly.
PA 90-0613 was effective July 9, 1998, although some parts took effect after that date.
George Ryan was elected Governor November 3, 1998.
So PA 90-0613 would have been signed by Edgar (not Ryan).
So Franks was correct in his WTTW interview.
And this document on the COGFA website is incorrect in stating,
http://cgfa.ilga.gov/Upload/IL_Corp_Income_Tax.pdf
PA 90-0613 was approved by the Governor on July 1998 and HB 2363 passed both Houses unanimously, passing the House 117-0 on October 30, 1997, passing the Senate 57-0 on May 22, 1998, and the House concurred 118-0 also on May 22, 1998.
Source:
Final Legislative Synopsis and Digest of the Nintieth General Assembly 1997 – 1998
State of Illinois
(No. 12), Vol. III
Action on all Bills and Resolutions Through April 5,1999
Published by the Legislative Reference Bureau