Reform plans overburden the poor
Herald-News editorial May 9, 2012 9:06PM
Updated: June 11, 2012 10:17AM
The state budget and the Medicaid and public pension systems in Illinois must be “reformed” (i.e., receive sharp spending cuts) to achieve fiscal balance. We get that. It’s necessary.
But we’re also sure that when the dust settles and the cliches recede, the poorest people in Illinois will suffer the most. They always do.
Has no one been watching what has happened to government budgets over the past 40 years? The people at the lower end always wind up paying much more proportionally than those at the top. This is how Illinois works.
That’s not political rhetoric. It’s mathematics.
The working poor are suffering in Illinois, largely because the easiest taxes to raise — excise and sales taxes on gasoline, cigarettes and alcohol, for example — hit the poorest harder than everyone else. In Illinois, those in the bottom 20 percent pay about 12 percent of their income in state and local taxes on average — more than twice as much of their income toward taxes than the wealthiest.
Why should this be? Easy. No one really listens to the working poor. Their lobbyists have less money to plead for fairness and to influence legislation than do competing constituencies. Is that fair? Don’t be daffy.
An analysis by the independent Institute on Taxation & Economic Policy concludes that excise taxes are 22 times harder on the poor than the rich and 11 times harder on middle-income families than the rich.
And the income tax burden on the poorest Illinois families is among the heaviest in the country. If you’re working Illinois parents with two children and a family income of $17,268, the state taxes you a bigger percentage of your assets than if you were a millionaire.
Does that make sense? Will it change?
Of course not.
Illinois’ tax system may be too broken to fix, given who governs the state.
We are told the state’s business climate is unhealthy. Maybe so.
But it’s not so good for the rest of us, either.