Trib pours SALT in tax wound

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Does conservative paper really believe property taxes should be considered taxable income?

Thank President Trump and Republican U.S. representatives like Mike Bost for a $10,000 cap on federal deductions for state and local taxes. (One Illinois/Ted Cox)

Thank President Trump and Republican U.S. representatives like Mike Bost for a $10,000 cap on federal deductions for state and local taxes. (One Illinois/Ted Cox)

By Ted Cox and Ameya Pawar

The Chicago Tribune is a conservative newspaper, no use denying that, and has been for well over a century, so it’s no surprise to see its editorial page arguing against a graduated income tax.

But, as a media outlet dealing in free speech and the freedom of the press, it might at least be expected to play fair and argue facts, not muddy the waters with conspiracy theories, scare tactics, and sophistry.

Look at Sunday’s editorial, which waits all the way until the third paragraph to repeat the conservative, anti-taxer talking point that, when Illinois voters do approve a progressive income tax, it will be “the better to eventually soak not just the wealthy, but middle-class families too.”

It soon proceeds on to the commonly repeated threat that a graduated income tax will speed an “exodus” of taxpayers leaving the state, especially among the wealthy targeted to pay the initial increases.

Allow us to point out that the Better Government Association has debunked those conspiracy theories, finding that a progressive income tax will not inevitably fall on the middle class, and that those who left the state when it briefly raised taxes under Gov. Pat Quinn were actually low-wage workers straining under the state’s regressive flat tax, while the well-to-do stayed and prospered.

The Trib suggests it’s only fair to raise taxes on everyone when they need to be raised, and it blames the state’s pension woes for the need for additional revenue, but that’s just the thing: Illinois has a pension funding problem because of pension “holidays” granted by both Republicans and Democrats, precisely because they couldn’t bring themselves to raise taxes on everyone. So they took pension funds and spent them elsewhere in the budget and let the state’s contributions fall behind.

The state’s pension mess is a direct result of its flat-tax policy, and a progressive income tax — expecting the top earners to pay just a slightly higher share of their income — is plain and simply a device to get Illinois out of the hole it’s dug itself.

What’s the Trib’s alternative? To let the pension funds go dry — only to pay as we go and pay more down the road? To amend the state constitution? Even that may not sway the Illinois Supreme Court, which has already ruled that the pension pacts in place are promises that must be kept.

The Trib goes on to turn the tables and argue against what it calls “your SALT dosage,” meaning state and local taxes. It actually argues that a federal tax break granted those local taxes benefits the rich, with their mansions, and hurts smaller states like Tennessee and South Dakota, in that they “subsidize” those tax breaks because they aren’t receiving them in the same measure with their less-valuable real estate.

Since when is a Chicago paper more concerned about taxpayers in Tennessee and South Dakota than its own readers, especially with Illinois considered a “donor state” getting less back in federal aid than it contributes in taxes? Beyond that, we should all recall that the then Republican-controlled Congress limited the SALT break as part of the tax cut benefitting the top wage earners and corporations passed and signed into law by President Trump at the end of 2017. That change in tax policy has already allowed the very rich and corporations to pay less taxes, resulting in a $1 trillion budget deficit. In an effort to minimize that, Republicans attempted to limit state and local taxes as allowable deductions, capping those deductions at $10,000 a year.

But here’s something most of us can agree on: no one, not even the rich, should pay taxes on the taxes they’re paying. Local property taxes should be deducted from taxable income where federal income taxes are concerned. Who would argue otherwise? The Trib editorial page, of course, because somehow the Illinois fair tax is at once evidence that Democrats favor unions, because they’re trying to make those pensions solvent, even as they favor their “rich campaign donors,” because they’re standing firm on property taxes being a legitimate deduction.

That’s pure sophistry if not outright hypocrisy.

But it’s consistent for the Trib editorial page, where any government initiative that might benefit unions or working families or the larger society as a whole is suspect, while anything benefiting the rich or businesses or corporations — the “job creators” — is welcome (with the notable exception, for the moment, of SALT).

Look, we recognize that the Trib edit board does not represent its staff of writers, who have unionized and who are now fighting to protect their rights, their work, and their jobs from the Alden Global Capital hedge fund that has seized a major share of ownership. But it’s a shame to see the editorial page conveying the talking points of the very corporate entity threatening to gut the staff the way it has already hollowed out the Denver Post and the San Jose Mercury News. Perhaps the Trib editorial board should see unfettered capitalism from the perspective of its own employees, as not many, if any, are making the $250,000 a year that would lead to higher rates under the Illinois fair tax, and most could no doubt use a break on their property taxes, a position the Trib is usually eager to concede.

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February 11, 2020 at 01:08PM

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