Top 10 Ways to Generate Revenue for the State of Illinois
We Need to Fix the State of Illinois - It's Stuck
For years, the city of Chicago has been completely controlling the influence upon Illinois government. Most of Illinois counties are actually Republican majorities, but due to the large populations within the few Democratic counties in the state, Illinois is constantly labeled as a blue state. Laws and policies are greatly controlled by the Democrats because of this reason, and therefore there is no political balance to allow for Republicans in this state to have anything go their way during an election. Unfortunately, our massive debt is also a symptom of this problem.
Democrats within the state have not had enough diversity and competition, and have thus been allowed to over-extend and utilize our budget as they see fit. So, here we sit with a huge amount of debt, internet tax laws for companies with no physical presence in our state, taxes increasing, companies threatening to leave our state, and we still have our looming cloud of debt hanging over our heads. So, what is the answer?
Well, herein we will address the Top 10 Revenue Generating Ideas for Illinois, and also address some of the issues currently impacting our fine state's revenue in a bad way. We also leave some room to allow for Illinoisans to voice their opinions regarding their top ideas for turning our state's economy around to return us from the red and into the black. Hopefully, by allowing the people of Illinois to voice their opinions on this content, we will be able to raise awareness of them to our representatives and force them to take corrective action.
1) Pass a Concealed Carry Gun Law in Illinois - DONE
We did it! Now, Illinois, don't mess it up and ensure that you streamline the program to be self supporting and sufficient. Also, stop trying to implement these gun control bills! Firstly, gun sales make Illinois money. Second, criminals don't care about guns laws... Let's say this again —"Criminals don't care about gun laws." All gun control laws accomplish is weakening your law-abiding citizens in their ability to protect life, liberty, and property from criminals. Encourage gun sales for law-abiding citizens. Try to attract gun and gun related product manufacturers and sellers to move to Illinois. Remember, this is a multibillion dollar industry, and you don't want to just let every other state in the Union have all of it.
This law has been extensively debated, proposed and re-proposed, but kept getting voted down. How was this possible? 49 other states in our great nation, The United States of America, saw fit to implement either an open carry or a concealed carry gun law, or both long before Illinois did. Why is Illinois the LAST state where not only can you couldn't do one or the other, but BOTH were illegal. Why did it take the threat of Illinois legislators being held in contempt of federal court for them to implement a concealed carry law? Why did Illinois miss out on decades of revenue from a carry program, and why are law abiding citizens being targeted by Illinois to make them unable to defend life, liberty, and property from those attempting to take it from them?
The cost of a concealed carry license, as well as the gun-safety and/or shooting class that a person is required to take, not only creates Illinois jobs, but raises our state's annual tax revenue by tens or hundreds of millions of dollars. This Illinois citizen is willing to pay hundreds for a concealed carry license, and would expect to renew it every 1 - 3 years. Now, while this may not be an immediate 100 million dollar earner, it definitely will be a consistent revenue generator for Illinois, and will only grow as our population grows. Our young men and women of the military, as well as our former police officers should be able to carry a firearm on their person in the state of Illinois, as all of their brethren can in the other 49 states of the union.
You also have to account for the firearm industry itself. The firearm industry is a multi-billion dollar industry. If you want a piece of that very lucrative pie, you need to make Illinois attractive to gun manufacturers and business owners, firearm accessory manufacturers and business owners, as well as firearm training and certification instructors and licensing programs. This can be accomplished by publicly stating that Illinois is changing its stance on the time honored firearm and its place in American history and society, as well as make some comprehensive corporate tax reforms to allow these businesses to desire to relocate to our state immediately. Also, tighten down upon criminals and existing gun laws to help keep firearms out of the hands of criminals. Work with federal authorities to renew your promise to help them catch and prosecute federal firearm law breakers and pursue state firearm law breakers both with maximum sentences for all violators.
2) Downsize Illinois Government
One of the biggest burdens upon Illinois taxpayers just so happens to be that Illinois government is way larger than states with populations which dwarf the State of Illinois in size. Despite the population of Illinois not being the highest, the State of Illinois, when you combine state and local taxes, has the highest tax burden in the United States of America. On average, Illinois households pay 15% in state and local taxes. Since 2005, Illinois has lost 700,000 residents to other states. This loss is not only more than any other state, but was directly attributed to Illinois taxes being too high when these people were polled as to why they were moving away from Illinois. The fact that Illinois imposes the highest property taxes in the country may have something to do with this. Illinois residents pay 6.4% of their annual income to Illinois property taxes, which is more than double than the national average.
So, why is Illinois so expensive to its residents? Do we have perfect road and infrastructure, water which extends life, or schools which guarantee that its graduates will all be prepared for success in college? No, none of those. Illinois has 7,000 units of local government, which is way more than any other state in the United States. This consists of school districts which run just one school, two separate governments to run the same town or maintain the same roads, mosquito abatement districts, and more. This drastic waste of Illinois taxes, from unnecessary bureaucratic salaries and pensions, is driving up Illinois taxes ever year. Texas, with twice the population of Illinois, has 25% less units of local government. Florida, which has 6 million more residents than Illinois, has only 1,650 units of local government. Both Florida and Illinois residents pay way less in the overall taxes which Illinois residents are forced to pay. Overlapping and redundant layers of local government, has led to an inefficient and top-heavy state and local government. To prove that this is true, DuPage County, which consolidated only 4 units of local government saw $150 Million a year in local savings!
3) Pass Tax Laws Which Make Sense
The new Illinois Internet Sales Tax Law was yet another sign of how some states are "jumping on the bandwagon" in order to justify making money while obliging lobbyists for store owners residing in their state. The new tax law re-defined the word "presence", the determining factor as to whether any company has to collect sales tax for the state that any internet purchase takes place within. The target of this law? Amazon.com, Overstock.com, Endless.com, SmallParts.com, and more.
Illinois legislators argued that their having "affiliates", internet marketers NOT on the payroll for the company, who direct internet traffic to their website, reside within Illinois, and are paid a commission if said traffic results in a sale, should be considered a presence. The definition up until this point was that they had to have some kind of "brick and mortar" store existing within the state, or a "physical presence". Their justification? To allow the existing "brick and mortar" stores in the state of Illinois to be more competitive with these internet-only stores by leveling the playing field.
So, the states are now in the business of taxing business with different business models in order to allow indirectly competing businesses to be more competitive against them? Isn't competition supposed to be achieved by the companies themselves? Comparing internet sales stores and brick and mortar stores with a website is like comparing apples to oranges. They have different business models, and therefore will NEVER be comparable.
I still buy from brick and mortar stores' websites in Illinois, as well as from the physical stores themselves. I also still buy from internet-only based stores. My purchase patterns will NOT change because of this law. Any internet marketer with over 3 years of experience could have told you how this law would have played out, and any marketing professional who advised you in favor of this change should have known better. Forcing internet-only businesses to pay state taxes when they have no physical presence within our state, simply because of an internet marketer pushing the person to their website, is unconstitutional and immoral.
Just because some states make a mistake in judgement doesn't mean that we have to follow suit, no matter how attractive it may be to increase our state's revenue. We cannot sell our integrity to meet our bottom line. But wait, didn't these websites fire ALL affiliates within the state of Illinois right after the passing of this law? As for our Governor's corrective plan to help now job-less affiliates, by offering alternative affiliate programs that a) don't pay as much, b) cannot replace the immediate value of all of the time and effort invested in researching and promoting the internet-only store products, c) cannot replace the value of the website ranking achieved for websites and internet content used to promote your existing affiliate links, and d) requires even MORE time and effort to replace all existing affiliate links being promoted to the alternative affiliate programs' links.
Affiliate advertising takes a LOT of time to plan, implement, and promote. All internet-only store affiliates in Illinois who were using targeted campaigns for specific products and niches may not be able to replace their internet-only store promotions with an alternative affiliate program's product(s) - forcing them to take a complete loss and to start from scratch. So, now that you know the truth about how badly this has impacted Illinois affiliates, let's review what was accomplished:
- All sales tax which was supposed to be obtained by this law was lost. Amazon no longer has ANY presence within Illinois.
- The state of Illinois decided they were justified to charge CONSUMERS (individuals and companies) retroactively for taxes on internet purchases in 2011 which were made to these websites. So, we all get DINGED with that one.
- Residents in Illinois who were affiliates for these websites were fired - resulting in a loss of existing income and future potential income from these sites for those individuals.
- As a result of all Illinois affiliates being fired - Illinois income tax revenue has dropped (both existing and future potential).
- Now affiliates (who are most likely small business owners themselves) are more attracted to the idea of re-locating their businesses OUTSIDE of the state of Illinois - which would result in yet ANOTHER Illinois revenue pay-cut.
- Indiana immediately announced a strategy of attracting businesses from Illinois by providing .5% corporate tax decreases each year over the next 4 years, dropping it from 8.5 to 6.5 percent - enhancing even more the potential for these companies, and others, to leave Illinois.
4) Have a Corporate Tax Strategy to Attract Businesses From Neighboring States
Our neighboring states are offering businesses attractive corporate tax incentives or decreases in order to attract them from the state of Illinois. What are we doing about it? There are plenty of opportunities for us to attract businesses from our neighboring city of St. Louis, Missouri. However, time and time again we lose out on opportunities for companies to build their businesses in Illinois.
- Why are they choosing the city of St. Louis over Illinois cities across the river?
- Have we identified the causes of why this is occurring over and over again?
- Are we trying to attract businesses by offering them tax incentives?
- Are we turning away opportunities in order to meet a short term financial goal, instead of addressing our long-term financial goals?
- Are we seeking out companies who are making corporate headquarter moves in order to attract them to Illinois?
- If we are doing any of these, then we need to address why there are so many businesses choosing neighboring states over ours - consistently.
Remember, we may need to make sacrifices in order to make the correct investments in our state's future. Illinois needs to stop thinking short-term, and begin looking long-term. The more businesses residing in our state, the more taxes we will earn over time. Sales tax alone should be a good enough incentive to pull these businesses into our state and municipalities. We need to allocate time and resources towards achieving this goal, so that we can STOP losing this war with our neighboring states.
5) Tax Appropriately for Tele-Commuters Who Commute to Neighboring States Part-Time
How many of you telecommute from Illinois to a neighboring state to work? If you do, you know that you must file income taxes both for Illinois and for the neighboring state where you work. This is a normal and standard practice in every state. However, what percentage of you are part of a work-at-home program? Out of those, what percentage of the time do you work from home? This is a question that the state of Illinois must address. We have people living in Illinois, working from home for companies outside of Illinois, and the state in which their company resides is getting ALL of their state income taxes! These are lost dollars of Illinois revenue, and we need to devise a strategy requiring companies to report this information to the states that they are required to report employee incomes to.
How many millions of dollars in annual revenue must we lose, simply because we are looking at the WRONG opportunities for state revenue? Work at home programs have existed for YEARS now. Why didn't someone before me think of this opportunity? If someone did, why wasn't it addressed?
Missouri companies are saving money by having Illinoisans commute to their state and work for them, many times for less salary than someone residing within their state. Why not require them to spend a little more money to manage and report combined annual hours employees are working from home who reside within our state, and then require state income taxes to be reimbursed to us from the state in which they are working? This is a FAIR tax change, that would truly benefit Illinois.
6) Maintain an Illinois State Tax Amnesty Program
Individuals must pay state income taxes. However, there are those situation where a person may have overlooked items, forgotten to pay, or could not afford to pay their state income taxes for a given year. If we were to offer them opportunities to finally pay their back-taxes for previous years without having to pay any tax penalties, we will motivate them to make due on what they owe.
This will offer them an opportunity to save money on their tax payment(s) AND to avoid criminal proceedings should those be warranted. This will also offer savings to the state of Illinois by negating to have to pay for criminal proceedings and all associated work and labor associated with them, and allowing Illinois to focus on the TRUE criminals.
Times are tough, and people do make mistakes. We must offer them an opportunity to do what's right, without kicking them while they're down. We need to support our fellow Illinoisans in their time of need, but without truly bearing the financial burden of doing so. They will take the opportunity to pay what they owe if we offer it to them without penalty.
However, we must keep the window of acceptable years that they are eligible for this amnesty service to be a small period, and require supporting financial documentation that they were in financial distress, or that the mistake on money owed was non-intentional or not of their own accord. We can address them on a case by case basis, ensuring that there is no abuse to the system - and offer hefty penalties if abuse is ever discovered.
7) Educate Parents Upon Importance of Investing with Illinois College Savings Bond program.
Illinois has an amazing college savings program, using 529 Accounts or Illinois College Savings Bonds. These bonds are issued by Illinois and are general obligation bonds that are tax-exempt, from both state and federal income tax, investment vehicles. They are long-term investment bonds and can only be used for your child's college tuition and other education expenses. These are AMAZING tools for parents to use in order to save for their child's education.
What is the problem? Parents are NOT educated properly of their existence. Most parents are unaware that these bonds exist, or how easy and affordable it would be to utilize them to help save for their children's educations.
- Why aren't these part of an employees check-in process when they start working for Illinois companies?
- Why aren't Human Resources people educating employees regularly upon their availability and use?
- More importantly, why isn't it an option to remove some of your paycheck to be awarded towards a 529 Account when you file your W-4 with your company?
- We can allocate 401k investments from our paycheck, why can't we do the same for a 529 Account?
Illinois MUST be pro-active with this amazing program that is 1) creating state revenue and 2) enhancing the availability of a proper education for its children.
8) Illinois Needs to Attract Internet Based Businesses and Business Owners
Internet commerce is one of the fastest growing businesses or business models in the world. Everything from the internet-only stores, which Illinois just slapped in the face, to the affiliates and marketers who make their incomes solely from marketing online (via promoting affiliate products, selling their own e-products, or running an internet based membership site) need to be attracted to our state instead of having us push them away. More 25 year-old millionaires exist in this country due to internet commerce and the billion dollar business that it is.
By becoming pro-active with our tax laws, as well as marketing our state, we need to show them that having their internet based company in Illinois is the best decision that they could make for their future. We are the center of our country, and therefore have a good perspective upon our nation from coast to coast. Let's attract these young millionaires and their businesses so that we can be a leader in internet commerce, and not an opponent towards it. We are losing out on this growing business, where we could be supporting both traditional businesses as well as internet based ones.
9) Illinois Implements a Fair Tax
For years, we have been looking at tax reform at the national and state levels. The most comprehensive and realistic proposal which I have seen so far, was the Fair Tax. The Fair Tax is a global sales tax which would replace income taxes. So, we eliminate income tax altogether, and we instead implement a higher sales tax on all items. In effect, we will pay more for purchased items across the board, and the more expensive the item the greater the taxes on that item.
With this tax program, the wealthy will contribute more money towards our taxes than those who are living off of minimum wage - simply due to the average purchase price point differences between the two groups. So, as your income and spending power increases, so does your contributions towards our taxes, due to elevated value of items that you purchase as your spending power increases.
The thrifty will be rewarded by being thrifty, and those who live in luxury will contribute more towards taxes due to their superior spending power and their choosing to spend money on luxury items. All in all, it is a fair taxation process, where those who can afford to be taxed greater are... and those who can only afford to spend money on the essentials will be taxed less. During times of greater prosperity, the wealthy will actually spend more - allowing us as a state to have greater tax income and to pay down our debt at a more aggressive rate.
This tax program will also allow our elderly and retired folks to budget for a fixed income, as we have always done, but then also leverage extra income when it becomes available to us. Whether it's for debt elimination, or to set aside as cash assets owned by the state for future spending, having a tax revenue program that grows as our citizens wealth does makes more sense and can be more accurately budgeted around predictable planning reports of our citizens and their last year's reported incomes. If this is our nation's answer towards tax reform, then why shouldn't Illinois be the state to lead the way?
10) YOU DECIDE!!!
I will let readers choose what the 9th and 10th top Illinois Revenue Earners that we need to adopt should be! Hint - They can't be one of the ones proposed in numbers 1 - 8.
You decide what the 10th revenue change should be! It could be reforms to existing revenue earning programs, or a proposals for new revenue earning programs. However, I will let the readers propose them, or vote on those that were already proposed by previous readers. The top two proposals after 1 year will be posted! Be as descriptive as possible - and number your entries in each category. That way, if someone supports your contribution, they post an item like "I agree with revenue program reform proposal #2" beneath the reform category, or "I agree with revenue program addition #33" beneath the addition category.
What should the 10th Top Illinois Revenue Earning Reform/Addition Be?
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
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