Our State government has been in a long-term budget crisis – and the people are suffering dire consequences.
After over a decade of cuts to education and critical social services, new Governor Rauner has proposed a budget that would cut higher education spending by 31 percent, spending on AmTrak by 40 percent, funds for municipal services by 50 percent and that would impose other large cuts to almost every public service agency and program, including those that protect children, the elderly and disabled, the environment, public safety and more.
The Democrat-controlled General Assembly opposes the worst of the cuts but offers no plan for raising the funds needed to pay for its proposed budget.
Why is all this happening? Because Illinois has one of the most regressive tax systems in the nation – meaning that it taxes poor and middle-income workers at a higher rate than the very wealthy, the exact opposite of a rational system of taxation. Instead of fixing the problem, a succession of both Democratic and Republican administrations, and General Assemblies, decided instead to underpay, and borrow from, the state’s pension systems, to pay for government operations. Now that the unpaid pension liability has ballooned to over $110 billion, and the interest on past borrowing is eating into current budgets, the only “solution” current leaders have come up with to address the pension problem was to try to force current and future public retirees to take a major hit in benefits (even though this violated the Illinois Constitution). And their only solution to the budget crisis is – well, they don’t really have one. It’s either turn Illinois into Greece (the Republican answer) or go deeper into debt, not paying bills (the Democratic answer).
There is a real solution, but it will only be enacted if we, the people demand it, in enough numbers to force legislators to act. The long-term solution is to make our tax system more progressive, placing the greater burden on those most able to pay. The immediate solution, the step needed to get us out of the current crisis, is to TAX THE SPECULATORS.
Illinois operates two of the largest financial markets in the world, the Chicago Mercantile Exchange (the CME also owns the Chicago Board of Trade) and the Chicago Board Options Exchange. Each year, the trading of futures, options and other derivatives on these exchanges exceeds $900 trillion in value, an almost unimaginable sum. (Total world gross domestic product today is about $75 trillion.) When working people purchase necessities in Illinois, they typically pay sales taxes of 7 or 8 percent, or more (depending on local government rates). Yet the buyers and sellers of these derivatives pay not one dime in sales taxes on these purchases.
If Illinois were to require the speculators to pay a minuscule tax – roughly one one-thousandth of one percent – on the sales of these derivatives, it could readily raise about $10 billion a year, more than enough to bail us out of the current crisis and restore adequate funding to our schools, universities, and essential public services, and reduce our unfunded pension liability.
Please join the effort to enact this common-sense solution to our State’s budget crisis. Sign our petition here. Learn more about the proposed “LaSalle Street Tax” solution on this website. Spread the word and get others to sign on. And send a message to your State Representative, State Senator and the Governor to solve the Illinois budget problem by enacting a sales tax on speculative trading in Illinois.