Tax Breaks for Illinois’ Biggest Employers Cost Taxpayers Dearly

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CHICAGO – Illinois’ effective corporate income tax rate of 9.5% is contributing to the state’s financial woes, according to the president of Taxpayers United of America.
“Illinois has the country’s fourth highest corporate income tax rate and rather than helping the state’s crisis level financial woes with increased revenue, it is compounding the problems by chasing away businesses. Unless, of course, those businesses are large enough to hold the state hostage by threatening to move their operations to a more business-friendly state,” stated Jim Tobin.
“Illinois lawmakers don’t have the economic good sense to lower the corporate income tax rate to a level that will attract and keep businesses. Instead, they engage in a damaging corporate welfare program that rewards those very businesses that threaten to leave.”
“Large corporations like Sears and CME have already siphoned money away from small businesses and individual taxpayers with their tax discount deals that resulted from the threat of leaving Illinois. Now there is a string of corporations trying to get their turn at the corporate welfare trough.”
“Office Depot, who recently merged with OfficeMax, is threatening to move the Naperville, IL, headquarters of OfficeMax to Boca Raton, Florida, home of the former’s corporate operations. Their leverage is the 2,000 jobs that would go with them. Decatur stands to lose a major employer in Archer Daniels Midland. They are citing the state’s burdensome income tax as the reason to leave Decatur and Illinois unless they receive a tax cut.”
“It’s time to say no to these corporations and end corporate welfare and lower the 9.5% corporate tax rate for everyone. Not only would we retain the large corporations and the revenue, we would retain the thousands of small businesses and the tens of thousands of individual taxpayers who have silently protested paying the state income taxes of the larger and richer corporations by leaving the state.”
“It’s no secret that Illinois is functionally bankrupt. Illinois and its flagship city of Chicago have been spanked for their reckless spending and borrowing by having their credit ratings repeatedly downgraded. Illinois now has the worst credit rating in the country. These spankings were, effectively, punishment for not reforming the state’s sinking government pension funds; however they did nothing to force Speaker Michael Madigan (D), and Senate President John Cullerton (D), to provide the necessary leadership to finalize even minimal reforms.”
“Instead of reforming their spend lust and a bankrupt government pension system, the Illinois General Assembly is considering at least three resolutions that would pave the way for a referendum to amend the State Constitution that would allow a graduated or progressive income tax. The proposed changes would increase the income taxes of 85% of Illinois’ taxpayers. The top rate for the individual income tax could be as high as 11%. But even worse would be the estimated 12.8% corporate income tax rate.”
“And we can’t forget that Springfield Democrats passed a temporary 67% increase in the personal income tax rate along with a 30% increase in the corporate income tax rate in a structured vote, literally in the last minutes of the 97th Illinois General Assembly. This ‘temporary’ increase didn’t make a dent in the state’s indebtedness as it was supposed to.”
“Such an irresponsible increase that will be sold as a tax increase only on the rich, will force even more back-room deals for the big corporations that will be paid for by individual taxpayers and small business – that is until they quietly take their jobs and their money to tax-friendly states.”

Power Structure Turns Back Riverside-Brookfield School District 208 Electioneering Lawsuit

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CHICAGO—The president of Taxpayers United of America (TUA) condemned the unresponsiveness of the legal system in Illinois, which denied an appeal by taxpayers who sued Riverside-Brookfield Sch. Dist. 208 for illegal electioneering.
“It’s mindboggling the extent to which local judges protect the status quo, even in the face of convincing evidence that a local government-school district engaged in illegal electioneering in trying to pass a property tax increase referendum,” said Jim Tobin, TUA President.
Representing homeowners, TUA had joined with Anthony J. Peraica & Associates in appealing the decision of Judge Leroy K. Martin’s July 17, 2012 ruling, in which he dismissed with prejudice their lawsuit against Riverside-Brookfield Sch. Dist. 208.
Plaintiffs Peraica and TUA had charged that the school district used illegal electioneering in its failed attempt to pass a property tax increase referendum in the April 5, 2011 election.
The appellate court affirmed Judge Martin’s dismissal of the lawsuit on Oct. 31, 2013.
“While we are disappointed in the appellate court’s decision, we were successful in defeating the April 5, 2011 property tax increase referendum despite the shady tactics of Sch. Dist. 208,” said Tobin.
“Our efforts on behalf of taxpayers against devious school districts led to the most important reform legislation in the 97th Illinois General Assembly: SB3314, introduced by St. Sen. Don Harmon (D-39 Oak Park), which was the direct result of the lawsuits filed by TUA against Oak Park D-97 and Wilmette D-39 school districts for using ballot language that purposely mislead taxpayers by understating by 300%, the property tax increase resulting from passage of a referendum. SB3314 makes this practice of duping voters illegal.”

Wisconsin Government Pension Multimillionaires Protected by Secrecy Law

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Madison—Taxpayers United of America (TUA) today released the results of its study of the Wisconsin State, University of Wisconsin, Madison Municipal, Dane County, and Dane County Government school employees.
“The State of Wisconsin refuses to release actual pension payments, hiding behind a secrecy law, the huge subsidies from taxpayers. Because we have a right to know just how much ‘public servants’ get paid not to work, we estimate the pensions of current employees.” stated Jim Tobin, president of TUA.
“While Wisconsin has made some important reforms to its government employee pension system, taxpayers won’t be protected until retirement savings accounts replace pensions and put an end to unfunded liabilities.”
“Wisconsin boasts a 99% funded pension system but the government standards for this calculation are far more generous than private sector standards. When those more accurate standards are used, Wisconsin government pensions are only about 54% funded.”
“75% to 80% of local taxes go to pay the salaries and pensions of government employees. Taxpayers have a right to see the details of those payments. How can taxpayers understand exactly how much their government employees are being paid in total compensation, salary plus benefits, without access to the actual payments to retirees? We have a right to review, evaluate and make decisions about those payments.”
“That is precisely why we are here now, releasing the salaries and pension estimates for the Wisconsin government employees.”
“For example, David C. Villa, a board executive for the state, makes a stunning $669,145 in annual salary. Assuming he meets the criteria for a full pension, he would collect an estimated annual pension and Social Security payment of $494,401*. Those annual payments would accumulate to $10,382,430* over a normal lifetime.”
“University of Wisconsin Athletics Director, James K. Aagaard  gets an annual salary of $500,000. His estimated annual pension with Social Security is $376,000* and his estimated lifetime payout is $7,896,001*.”
“Dane County government school employee, Jane Belmore gets an annual salary of $201,438 and fringe benefits of $36,588. Her estimated lifetime pension payout is $3,507,139* based on her annual estimated pension and Social Security payment of $167,007*.”
“Wisconsin taxpayers who are on the hook for unfunded liabilities get an average ‘pension’ from Social Security of about $15,000. Private sector taxpayers don’t enjoy nearly iron-clad job security and struggle with average unemployment of 6.7% and in some areas, over 10%.”
“While our pension estimates are a very useful education tool, I encourage Madison and all Wisconsin taxpayers to demand the right to review pension payments. I have written letters to Governor Walker and every member of the state legislature, urging them to stop hiding pension payments from taxpayer review.”
“Wisconsin needs not only to be more transparent, but to continue with pension reforms that will bring its government employee benefits in line with those of the private sector. Specifically, government pensions need to be replaced with 401k-style retirement savings accounts where taxpayer contributions are made when the conditions allow it. Government employees need to increase their contributions to match the level of the private sector, and government retirees and employees need to pay for at least half of their health-care premiums.”
Click below to view pensions:

 
*Gross wages provided by government administrator and may include overtime or PTO that would not be eligible for pension calculation.
Annual Pension Estimate Assumptions:
1. Assumes employee retires one year from now and this salary would be the second to last salary.
2. Assumes 41 or more years of employment, retirement age is 65, and pension is 70%
3. Plus Social Security assuming 4% salary increases over last 35 years.
Lifetime Pension Estimate uses IRS Life Expectancy Table (Form 590) at age 65 = 21 years