Friday, April 29, 2016

Millionaires Tax Goes Down

Millionaire’s Tax Goes Down in Flames in State House
By Jim Vail
Special to

The heart of the Chicago Teachers Union fight with the city is over funding.

The CTU argues that the city is “Broke on Purpose” because it refuses to make the bankers and businesses pay. Instead, the mayor wants to make the people pay via cutting teacher salaries, closing schools and eliminating educational programs.

So the teachers went out on a one-day strike April 1st to focus part of the fight in in Springfield to galvanize state lawmakers to enact progressive tax revenue that would make the rich pay more.

That strategy suffered a major defeat last week when a proposed constitutional amendment to levy an additional tax on incomes over $1 million came up three votes short of passing the Illinois House, according to

The CTU endorsed House Speaker Michael Madigan in his last election and have given him thousands of dollars in political donations.

So it was the powerful speaker who proposed to add a 3 percent surcharge on income over $1 million, which would have raised some $1 billion for schools each year.
Madigan blamed the defeat on the Republicans.

“For the second time in less than a year, Republican legislators have rejected the wishes of their constituents and opposed a measure requiring the top 1 percent to pay more to help boost education funding in Illinois,” read a statement from Madigan posted on the Progressillinois website.

The “millionaire’s tax” suffered the same defeat last year by almost a similar vote count.

Most Americans favor a tax on the rich that would raise significant revenue.
“Right now, the wealthy pay too little,” Hillary Clinton said during a debate, according to the NY Times. “And the middle class pays too much.”

There are cities in the US that have passed a tax on the rich that have helped raise the money to pay for education.

The Republicans have always voted against taxing the rich.

The argument against taxing the rich is that rich people will leave Illinois. This is the same argument given for corporate tax breaks or public-subsidized stadiums that are privately owned – if you don’t give me tax-payer money, I’ll leave.

It’s called blackmail, and unfortunately, politicians who are financed by the rich succumb to it.

It’s hard to fathom that back in the 1950s the wealthy were taxed at a 90% rate. And the country was the strongest economy in the world.

Madigan did increase state taxes on corporations, and of course, they threatened to leave the state. Republican governors like Scott Walker in Wisconsin openly courted them to his “right to work” state which eliminated collective bargaining for unions and hit the middle class hard.

But there was no mass exodus of corporations leaving Illinois.

The CTU also proposed a penny tax on stock trades that could raise several billion dollars. Mayor Rahm Emanuel said the Chicago Board of Trade would simply leave the city. But New York has a similar tax that raises billions of dollars, and no traders have left the financial center as a result.

One of the greatest problems in this country is that the income gap between the rich and poor is growing at an alarming rate, and the middle class is vanishing.

The CTU is also proposing a progressive tax in which the rich would pay more and the poor would pay less. Currently, Illinois is one of only seven states that has a flat tax in which everyone pays the same rate, a bigger burden on low-income workers.

The school strike action was only one-day. A looming long teachers strike possibly this fall will highlight the battle between who pays the state’s and city’s overdue bills – the rich or the rest of us.

Stay tuned!

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