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.


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