Feb 24th 2015

IL Governor Rauner Gets $750,000 Tax Break – Proposes Slashing Services to Middle Class and Poor

by Robert Creamer

Robert Creamer is a long-time political organizer and strategist and author of the recent book: "Stand Up Straight: How Progressives Can Win," available on amazon.com.

Illinois’ new GOP Governor, Bruce Rauner, will personally receive a $750,000 per year tax cut as a result of his decision not to continue the state’s temporary 1.25% income tax surcharge that expired last year.

His taxes were cut by an amount equal to the annual income of 14 families of four making the median income.  And remember that after adjusting for inflation, that median income number has not materially increased in about 35 years, since virtually all of the income growth resulting from the massive increase in worker productivity over that period has been siphoned off by speculators like Rauner.

Rauner, who made $61 million in 2013 – or $29,000 per hour – is one of a small group of multi-millionaire speculators who would directly benefit enormously from lower state tax rates.  Among them is his friend Ken Griffin, reputedly the wealthiest man in Illinois, who contributed $2.5 million to Rauner’s campaign for Governor – and has also pitched in $10 million to a $20 million campaign war chest that Rauner plans to use to run candidates against members of the Legislature who oppose his policies.

Griffin and his soon-to-be former wife, Anne Dias Griffin, are involved in a high profile multi-million dollar divorce battle.  He and Dias are fighting over the control of tens of millions of dollars.

One filing by Dias, quoted by CNBC, gives you a flavor:

Dias said she and their children have come to "enjoy a lifestyle reserved only for the very wealthy," including houses in Chicago, Aspen, Hawaii, Miami Beach and New York. They also have "unrestricted access" to two private jets "to travel to the aforementioned homes" as well as other destinations.

She said the family has a "large group of staff members assisting the family, including extensive household, security and family office employees," and their own company that employs staffers, called "Griffin Family Services."

Dias is asking a million dollars a month -- $12 million a year -- in child support. That’s right, $12 million per year in child support – you can’t make this stuff up.

Just by way of comparison, remember that a highway worker for the state of Illinois who makes an average income of $49,000 a year laying hot asphalt and filling pot holes, would take about 244 years to make $12 million.  But Griffin’s pal, Rauner, says he wants to cut the pay for such workers – claiming they make too much and should be paid something closer to the $39,000 a year he says they make in surrounding states.

None of this seems to bother Rauner one bit, since at the same time he and his friends get that big tax cut, Rauner’s new state budget promises draconian cuts in services that benefit the middle class and the poor.

Rauner proposed six billion dollars in cuts for state spending on universities, health care, local governments and pensions for state employees.

Here are some high points:

·      Limiting eligibility for Department of Aging Community Care Programs.

·      Cutting health care benefits for homecare workers.

·      Slashing funding for the Department of Children and Family Services.

·      Eliminating all Department of Children and Family services for youths 18-21.

·      Cutting adult dental and podiatry services as well as kidney transplants for undocumented children.

·      Eliminating exemptions for drugs for severe mental illness from a state 4-prescription limit.

·      Reducing payments to facilities for children on ventilators, supportive living facilities and children with severe mental illness.

·      Cutting Medicaid spending by $1.5 billion – including $735 million in cuts to hospitals serving Medicaid patients.

·      Eliminating assistance to families with Hemophilia.

·      Freezing intakes on childcare for children over 6.

·      Increasing childcare copays for working parents.

·      $27.5 million in reductions to community substance abuse programs.

·      $82 million reduction to community mental health programs.

·      Eliminating State funding for specific organizations providing:

-   Services for people with disabilities

-   Services to children with autism

-   Services to homeless young people

-   Services to run away teenagers

-   Immigrant integration services

-   Advanced placement classes

-   After school programs

-   Agricultural education

-   Arts and foreign language programs

-   Parent mentoring

-   Safe Schools initiatives

·      Cuts to breast and cervical cancer programs.

·      And a 31.5% cut to higher education.

His plan would also move state employees – most of whom make middle class salaries or less – into pension plans with lower benefits.

Rauner claims that his proposal is a “turnaround budget.”  “Like a family, we must come together to address the reality we face.  Families know that every member can’t get everything they want,” he said.   Unless, of course, you are Bruce Rauner or one of his mega-wealthy friends.

Seems that the state can’t afford more childcare for working parents, but it can afford huge tax cuts for the very rich.  After all, Ken Griffin needs to make that million dollar a month “child care” payment.

The fact is, of course, that Illinois – like most other states – are not in the midst of dramatic declines in economic performance that would require this kind of “belt tightening.”   In fact, Illinois, like most of America, is wealthier today per person, than at any other time in its history.

The problem is that the wealthy have rigged the economic rules of the game to allow people like Bruce Rauner and the millionaires who got him elected to siphon off most of the wealth for themselves and leave middle income incomes flat.

One of those rigged rules is found in the Illinois State Constitution. It would make sense to get much of the money needed to finance public services from those who have benefited most from the state’s economy – rather than those whose incomes have been flat.  You’d do that with higher income tax rates on millionaires and billionaires than the one charged for ordinary working people.

But when the state constitution was rewritten in the 1970’s, the wealthy organized to insert a provision preventing State Government from having progressive income tax rates.   They wanted to keep their own share of taxes low, and to shrink state revenue in general by requiring that if tax rates go up for them, they have to go up for ordinary people as well.

That problem needs to be fixed with a Constitutional amendment that allows a progressive income tax – which of course Rauner adamantly opposes.   But in the meantime it would still be possible to raise desperately-needed revenue in ways that mainly target the wealthy taxpayers by providing substantial personal exemptions in any new tax aimed at replacing the state’s temporary income tax surcharge that expired last year.

Rauner, of course, opposes any new state taxes and if you want to know why, just ask the mega-wealthy donors who financed his $63.9 million campaign to occupy the Governor’s mansion.

Through his new state budget, Rauner intends to continue his life’s work excavating the pockets of the poor and middle class in order to benefit himself and his wealthy associates. That’s why Rauner serves as the personal embodiment – the poster boy -- for Wall Street’s War on the Middle Class.

Bruce Rauner may think that he is auditioning for a spot on the 2016 GOP ticket or a cabinet post in a Bush, Walker or Christie administration.

In fact he could easily become the national symbol of the trickle down economic theory that has failed to produce benefits for everyday Americans and is at the core of the economic philosophy of every one of the 2016 Republican Presidential aspirants and their billionaire backers.


To follow Robert Creamer on Twitter, please click here.

To follow what's new on Facts & Arts, please click here.


Browse articles by author

More Current Affairs

Apr 11th 2021
EXTRACT: "Some presidents indulge in the “Mount Rushmore syndrome” making an obvious effort to achieve greatness. Normally soft-spoken and apparently modest Biden is making his own bid for immortality."
Apr 9th 2021
EXTRACT: "New ways of thinking about the role of government are as important as new priorities. Many commentators have framed Biden’s infrastructure plan as a return to big government. But the package is spread over eight years, will raise public spending by only one percentage point of GDP, and is projected to pay for itself eventually. A boost in public investment in infrastructure, the green transition, and job creation is long overdue."
Apr 7th 2021
EXTRACT: " One can, and perhaps should, take the optimistic view that moral panics in the US blow over; reason will once again prevail. It could be that the Biden era will take the sting out of Trumpism, and the tolerance for which American intellectual life has often been admired will be reinvigorated. This might even happen while the noxious effects of American influence still rage in other countries. For the sake of America and the world, one can only hope it happens soon.  "
Mar 28th 2021
EXTRACT: "By refusing (despite having some good reasons) to end electoral gerrymandering, Chief Justice John G. Roberts, Jr., has directly enabled the paralyzing hyper-partisanship that reached its nadir during Donald Trump’s presidency. By striking down all limits on corporate spending on political campaigns in the infamous 2010 Citizens United decision, he has helped to entrench dark money in US politics. And by gutting the 1965 Voting Rights Act in Shelby County v. Holder, Roberts has facilitated the racist voter-suppression tactics now being pursued in many Republican-controlled states."
Mar 24th 2021
EXTRACT: "the UK’s tough choices accumulate, and the problems lurking around the corner look menacing. Britain will have to make the best of Brexit. But it will be a long, hard struggle, all the more so with an evasive fabulist in charge."
Mar 15th 2021
EXTRACT: "Over the years, the approach of most American policymakers toward the Israeli-Palestinian conflict has been Israel-centric with near total disregard for the suffering endured by the Palestinian people. The architects of policy in successive US administrations have discussed the conflict as if the fate of only one party (Israel) really mattered. Israelis were treated as full human beings with hopes and fears, while Palestinians were reduced to a problem that needed to be solved so that Israelis could live in peace and security.  ..... It is not just that Israelis and Palestinians haven’t been viewed with an equal measure of concern. It’s worse than that. It appears that Palestinians were judged as less ​human than Israelis, and were, therefore, not entitled to make demands to have their rights recognized and protected."
Mar 8th 2021
EXTRACTS: "XThere’s a global shortage in semiconductors, and it’s becoming increasingly serious." ...... "The automotive sector has been worst affected by the drought, in an era where microchips now form the backbone of most cars. Ford is predicting a 20% slump in production and Tesla shut down its model 3 assembly line for two weeks. In the UK, Honda was forced to temporarily shut its plant as well." ..... " As much as 70% of the world’s semiconductors are manufactured by just two companies, Taiwan Semiconductor (TSMC) and Samsung."
Mar 5th 2021
EXTRACT: "Back in 1992, Lawrence H. Summers, then the chief economist at the World Bank, and I warned that pushing the US Federal Reserve’s annual inflation target down from 4% to 2% risked causing big problems. Not only was the 4% target not producing any discontent, but a 2% target would increase the risk of the Fed’s interest-rate policy hitting the zero lower bound. Our objections went unheeded. Fed Chair Alan Greenspan reduced the inflation target to 2%, and we have been paying for it ever since. I have long thought that many of our economic problems would go away if we could rejigger asset markets in such a way as to make a 5% federal funds rate consistent with full employment in the late stage of a business cycle."
Mar 2nd 2021
EXTRACT: "Under these conditions, the Fed is probably worried that markets will instantly crash if it takes away the punch bowl. And with the increase in public and private debt preventing the eventual monetary normalization, the likelihood of stagflation in the medium term – and a hard landing for asset markets and economies – continues to increase."
Mar 1st 2021
EXTRACT: "Massive fiscal and monetary stimulus programs in the United States and other advanced economies are fueling a raging debate about whether higher inflation could be just around the corner. Ten-year US Treasury yields and mortgage rates are already climbing in anticipation that the US Federal Reserve – the de facto global central bank – will be forced to hike rates, potentially bursting asset-price bubbles around the world. But while markets are probably overstating short-term inflation risks for 2021, they do not yet fully appreciate the longer-term dangers."
Feb 28th 2021
EXTRACT: "To be sure, calls to “build back better” from the pandemic imply some awareness of the need for systemic change. But the transformation we need extends beyond constructing modern infrastructure or unlocking private investment in any one country. We need to re-orient – indeed, re-invent – global politics, so that countries can cooperate far more effectively in creating a better world."
Feb 23rd 2021
EXTRACT: "So, notwithstanding the predictable release of pent-up demand for consumer durables, face-to-face services show clear evidence – in terms of both consumer demand and employment – of permanent scarring. Consequently, with the snapback of pent-up demand for durables nearing its point of exhaustion, the recovery of the post-pandemic US economy is likely to fall well short of vaccine development’s “warp speed.” "
Feb 20th 2021
EXTRACT: "Human rights abuses under Erdogan are beyond the pale of inhumanity and moral decadence. The list of Erdogan’s violations and cruelty is too long to numerate. The detention and horrifying torture of thousands of innocent people for months and at times for years, without being charged, is hard to fathom. Many prisoners are left languishing in dark cells, often in solitary confinement. The detention of tens of thousands of men and hundreds of women, many with their children, especially following the 2016 failed coup, has become common. It is calculated to inflict horrendous pain and suffering to bring the prisoners to the breaking point, so that they confess to crimes they have never committed."
Feb 20th 2021
Courtyard of the Amsterdam Stock Exchange, circa 1670, (Job Adriaenszoon Berckheyde).
Feb 12th 2021
EXTRACT: "Global regulators will no doubt be concerned about a potential volatility spillover from digital asset prices into traditional capital markets. They may not permit what could quickly amount to effective proxy approval by the back door for companies holding large proportions of a volatile asset on their balance sheets."
Feb 11th 2021
EXTRACT: "Since Russians began protesting opposition leader Alexei Navalny’s imprisonment, the security forces have apparently had carte blanche to arrest demonstrators – and they have done so by the thousands. If Russians so much as honk their car horns in solidarity with the protesters, they risk personal repercussions. The official response to the protests goes beyond the Kremlin’s past repression. It is war."
Feb 6th 2021
EXTRACT: ".......like Biden, Roosevelt was certainly no revolutionary. His task was to save American capitalism. He was a repairer, a fixer. The New Deal was achieved not because of Roosevelt’s genius or heroism, but because enough people trusted him to act in good faith. That is precisely what people are expecting from Biden, too. He must save US democracy from the ravages of a political crisis. To do so, he must reestablish trust in the system. He has promised to make his country less polarized, and to restore civility and truth to political discourse. In this endeavor, his lack of charisma may turn out to be his greatest strength. For all that he lacks in grandeur, he makes up for by exuding an air of decency."
Feb 2nd 2021
EXTRACT: "Europe must not lose sight of the long game, which inevitably will center on China, not Russia or relations with post-Brexit Britain. China is already establishing a presence in Iran, and demonstrating that it has the capital, know-how, and technology to project power and influence beyond its borders. Should it succeed in turning the Belt and Road Initiative into a line of geopolitical stepping-stones, it might soon emerge at Europe’s southeastern border in a form that no one in the EU foresaw."
Jan 29th 2021
EXTRACT: "One sign of this change is that, unlike all recent Democratic administrations, Biden’s hasn’t paid obeisance to Wall Street by giving bankers top jobs. The new Secretary of the Treasury, Janet Yellen, is a former Federal Reserve chair and academic who has made it clear that she understands the country’s pressing social needs. Moreover, Biden consulted Warren on her economic views, and has named a former Warren adviser as Yellen’s deputy. Yellen’s appointment demonstrates that Biden shares the insight that enabled Trump’s rise: that too many Americans feel that they cannot get a fair share. "
Jan 24th 2021
EXTRACT: "Barack Obama cautioned in his final speech as president that, “Our democracy is threatened whenever we take it for granted.” Yet isn’t that exactly what America has been doing? In a decade punctuated by the global financial crisis, the COVID-19 crisis, a racial-justice crisis, an inequality crisis, and now a political crisis, we have only paid lip service to lofty democratic ideals. ... Sadly, this complacency has come at a time of growing fragility for the American experiment. Internet-enabled connectivity is dangerously amplifying an increasingly polarized national discourse in an era of mounting social and political instability. The resulting vulnerability was brought into painfully sharp focus on January 6. The stewardship of democracy is at grave risk. "