Poor people really need their own lobbyist.
According to a report by Crain’s Chicago Business’s ace political correspondent, Greg Hinz, the General Assembly found the savings to give Sears and the Merc a tax break by scaling back an increase in the Earned Income Tax Credit -- a refund for low-income families.
The $250 million total pricetag is consistent with what I heard from another inside Springfield source. And it’s consistent with the language filed late Sunday, which, for instance, would effectively restore the corporate loss carry-forward provision only for small companies by limiting it to losses of no more than $100,000, boost the earned-income tax credit for working families just 50% rather than doubling it, and raise the exemption on the Illinois estate tax to $3.5 million rather than the originally proposed $5 million.
The EITC helps reduce some of the unfairness in the state income tax, which is the same 5 percent for everyone from the Merc trader to the guy who shines his shoes. After this year’s tax hike, it’s only fair that it would be increased. But the legislature isn’t working nearly as hard to make the system fair to the poor as it is to cave into blackmail from Sears and the Merc. According to a St. Louis Post-Dispatch editorial entitled “Missouri and Illinois are shamelessly taxing the working poor”:
In its study of the impact of state income taxes on low-income families, the left-leaning Center for Budget and Policy Priorities notes that Missouri and Illinois are among only 11 states that require a single-parent family of three earning below the poverty threshold of $17,374 to pay income taxes.
Both states require several hundred dollars in income taxes from near-poor two-parent families of four — total household income of $27,893, or 125 percent of poverty. Illinois goes so far as to require income taxes from families in severe poverty, meaning those at three-quarters or less of the poverty threshold.
Twenty-five states have adopted some form of the EITC. Illinois is among them, although its allowance of 5 percent of the federal credit doesn't offset its other problems.
So, does anyone want to lobby for the poor? If you can get them a bigger increase in the Earned Income Tax Credit, they might have a few dollars left over to pay you.