As it stands right now, Illinois goes $10 Billion further into debt every year, with 700 Million in tax payer dollars being paid out in interest. Without radical reforms, the hole we are in will only get deeper and deeper, with less and less of our tax dollars going to benefit us.
1) Graduated Income Tax - We need to make Illinois a flat tax state. Immediately sounds backward, doesn't it. A graduated income tax makes Illinois a flat tax state? Yes!! Because there's more taxes than just income tax! When you break down how much people in Illinois pay in State and Local taxes by income, this is what it looks like:
$0 - $19,000 13.2% of income - Lowest 20% of incomes
$19,000 - $38,000 11.8% of income - Next 20% of incomes
$38,000 - $61,000 10.8% of income - Next 20% of incomes
$61,000 - $99,000 10.1% of income - Next 20% of incomes
$99,000 - $202.000 8.7% of income - Next 15% of incomes
$202,000 - $498,000 7.4% of income - Next 4% of incomes
+$498,000 4.6% of income - Top 1% of incomes
With a Graduated Income tax mirroring the rates of Minnesota at 5.35%, 7.05%, 7.85%, and 9.85%, we can return equity to the tax system, and make it so everyone contributes their fair share. New revenue from making the top incomes in the state pay their fair share? $13.6 Billion
2) Recreational Cannabis Tax - With the referendum in Cook County voicing overwhelming support for a recreational cannabis system like Washington, Colorado, Oregon, California, Nevada, Alaska, Vermont, Massachusetts, and Maine have already have; the legislature needs to respect the will of the voters. To the tune of $350-$700 Million in new tax revenue.
3) LaSalle Street Tax - This is a tax on two of the largest financial markets in the world, the Chicago Mercantile Exchange and the Chicago Board Options Exchange. The total value of all trades on these two exchanges is 900 Trillion, yes with a T, Trillion dollars. A bill for this tax is already in the works in the Illinois Senate, SB 1970, with six co-sponsors, and it needs to be brought to the House. The plan is for a $1 contract fee on all agricultural futures and future options, and a $2 contract fee on all other futures, future options, and stock index options traded. With the average contract being $225,000, the LaSalle Street Tax ends up being less than 2/1000th of a percent of the average contract. New revenue for the State budget, $10 Billion.
4) Cut Property Taxes by 50% - Shifting the burden to income taxes helps to increase equity in the tax system. To make the system fully equitable, a full 50% cut in property taxes state-wide. With the current tab of property taxes sitting at $28 Billion, and the Recreational Cannabis Tax and Graduated Income Tax generating $14 Billion together; we can cut property taxes by 50% without affecting the budget at all. However, with this restructuring of the tax burden, middle and low income tax payers will save between $400 and $1500 on their state and local taxes on a yearly basis.
4) Cut Property Taxes 8% - Alternate Model with Single Payer Healthcare
1) Illinois Public Bank - Every State needs a 30 year infrastructure plan, and every state (aside from North Dakota) relies on private loans with an 8%-9.5% interest rate. On a 10 year loan at the lowest private interest rate of 8%, Illinois pays $1.46 for every dollar it takes out in loans for large infrastructure projects. For a more equitable 30 year loan, the state pays $2.64 on every dollar it takes out in loans for large infrastructure projects. A public bank would loan the State at a rate of 2% interest. At this rate on a ten year note, the state would pay $1.10 for every dollar it takes out. Extending the term to 30 years would cost the State $1.33 for every dollar it takes out. By opening a public bank and shifting from 10 year loans at 8% interest, to a public bank with 30 year loans at 2% interest, the state could cut payments on infrastructure by $1 Billion per year. Once the State's privately held debt is paid off, the State will save $700 Million in yearly interest payments.
2) Cut Corporate Subsidies for Coal and Nuclear - Between Coal and Nuclear subsidies, the State pays out nearly $45 Million. To coal, $20 Million, and to nuclear, $25 Million.
3) End power bills - At a cost $1 Billion per year on a 20 year public loan, being covered by ending subsidies, and the rest taken from the $1 Billion in infrastructure saving; Illinois could foot the bill for a $17.5 Billion project to convert Illinois to 100% renewable energy by 2030 and eliminating electric bills. That's right, no more power bills. The cost to build enough renewable energy infrastructure to power the entire State is about equal to the State's total energy bill. By investing in renewable energy infrastructure, which has about a 15% yearly upkeep cost, Illinoisans can save around 80% on their electric bills over a 20 year period. With Illinois average residential power bill being $87, that would be a yearly savings of about $800. The bottom 20% of income earners can spend 22% of their after tax income on electric bills.
4) Capping Salaries for State and Local Officials - Illinois has over 61,000 employees making salaries over six figures. By capping public employee salaries at $200,000 and fixing that to inflation, capping overtime, and capping future pension benefits at $1 Million and fixing that to inflation; Illinois can save about $50 Million per year. Capping pensions at $1 Million comes out as a person drawing $33,500 per year for 30 years. This is slightly about the average public pension and above the average years drawn from a public pension. Salary exceptions for public medical professionals. Public employees would also be prevented from drawing public pensions if they make over $100,000 fixed to inflation. Pensions can be drawn to increase compensation up to that threshold.
5) Consolidation of School Districts - Illinois has lowest number of students per school district in the country. By using technology to consolidate school districts, Illinois could save almost $200 million in administrative pay and pension payments.
6) Prison Population Reduction - Illinois' prison population has grown by almost 600% since the 70's. With non-violent drug offenders making up 20% of the population and costing tax payers about $385 Million. By ending the war on drugs and shifting to drug rehabilitation, Illinois could save $300 Million. $16 Million from the reduction of parolees. $32 Million in the reduction of the number of people on probation. Ending the drug war looks to save Illinois tax payers $350 Million.
7) Reciprocal Revenue from saving - Middle and Low income Illinoisans pay approximately 4.8% of their income in consumption taxes (sales tax, gas tax, ect.). From shifting the property tax burden to a graduated income tax, 80% of families will save about $750. With 4.8% of those savings being paid out in various consumption taxes, it will generate about $138 Million in new revenue.
That's an average of $1550 per year in savings for the bottom 80% of income earners in the state AND $1.4 Billion in new revenue for the State.
That's an average of $2250 per year in savings for the bottom 80% of income earners in the state, and $2.3 Billion in new revenue for the State allowing for either 8.5% property tax reduction or for tuition free college at all public colleges and universities.