Financial News

[Jenksismyhero]

Trust me...you're better off in the long run if a politician lies to get elected and then makes painful decisions to deal with issues rather than keeping his mouth shut to get elected and then pretends that there are no long-term issues to deal with.

 

Wow. Just...wow.

[Balta1701]

Wow. Just...wow.

That reaction is entirely from living under governor ***-grabber in California for a while.

[StrangeSox]

Wow. Just...wow.

 

I get what Balta's saying. If a truly good candidate has to lie to get into office to institute the best policies, or tell the truth and watch his opponent bring the government down in flames, what route should he take?

 

But, like you, I still feel really uneasy about it and view it as a big negative against Quinn. Not that I voted for him anyway, but still.

[mr_genius]

Dunno if this is the place to start this discussion, but it's financial "news."

 

Top Illinois Democrats (Madigan and Quinn included) seem to agree on a plan to increase the state income tax by 75% and add an extra dollar on cigarette sales.

 

http://chicago.cbslocal.com/2011/01/06/tax...-than-expected/

 

Ignoring the SHOCKING news that Quinn is agreeing to a deal that he said he'd veto during the election season (any increase over 1%), what do people think? I think we all know taxes are going to go up some time, but I dunno if this is the time to do it.

 

The corporate tax in Illinois is also going to nearly double from what I've read. Very bad move, as well as the other new taxes. Time for a recall.

[mr_genius]

And now, he's actually dealing with a budget deficit, rather than pretending that some mythical "rooting out waste and fraud" will somehow make it all better.

 

lol. there is a s*** load of fraud and waste in Illinois spending. spending needed to be cut.

[southsider2k5]

The corporate tax in Illinois is also going to nearly double from what I've read. Very bad move, as well as the other new taxes. Time for a recall.

 

Come on over to Indiana! Everything is cheaper here!

[Balta1701]

lol. there is a s*** load of fraud and waste in Illinois spending. spending needed to be cut.

Do you really think that there haven't already been substantial budget cuts in that state?

[Cknolls]

Do you really think that there haven't already been substantial budget cuts in that state?

 

 

Ten people filling potholes two days ago. Very efficient No they have not cut enough. Pension reform, what pension reform. f***ING JOKE. Hopefully this s***hole state goes bankrupt and defaults.

[mr_genius]

Do you really think that there haven't already been substantial budget cuts in that state?

 

There hasn't been nearly enough cuts. The private sector in Illinois cannot support the current state government spending levels. These new taxes will run jobs out of the state and lower income. This is typical Democrat stealing from the poor to give to the rich and entitlement class.

[mr_genius]

Come on over to Indiana! Everything is cheaper here!

 

doubling the corporate income tax does make our state a hell of a lot less competitive.

[southsider2k5]

Come on over to Indiana! Everything is cheaper here!

 

http://www.nwitimes.com/news/state-and-reg...8c9f205f93.html

 

INDIANAPOLIS | Gov. Mitch Daniels thinks Illinois' proposed 75 percent hike in its corporate and personal income tax rates will be great -- for Indiana.

 

In an exclusive interview Friday with The Times, the Republican governor said he looks forward to welcoming to the Hoosier State any Illinois business or resident that wants to pay less in taxes.

 

"We already had an edge on Illinois in terms of the cost of doing business, and this is going to make it significantly wider," Daniels said.

 

Illinois lawmakers are poised to vote next week on a plan that will raise the state's personal income tax rate to 5.25 percent from 3 percent, hike the corporate income and personal property replacement tax rates to a combined 10.9 percent and add an extra tax of $1 per pack of cigarettes. The income tax hikes would be retroactive to Jan. 1 and be reduced after four years.

 

Hoosiers pay a 3.4 personal income tax rate, while Indiana's corporate income tax rate is 8.5 percent.

 

The Tax Foundation, a nonpartisan tax research group in Washington, noted if the proposed corporate tax hike becomes law, Illinois businesses will pay the highest combined national-local corporate tax rate in the industrialized world.

 

That is the wrong course for Illinois to take, Daniels said.

 

"Folks in Illinois will eventually have to decide: Is this working well enough for us or do we want something different?" he said. "Point one of our anti-recession strategy here is to avoid doing what they've now decided to do."

 

Daniels has enacted deep budget cuts and eliminated many government programs to keep Indiana's budget balanced without a tax hike during his six years in office.

 

The money raised by the Illinois tax increases will help the state pay some $8.5 billion in overdue bills and make a $3.7 billion payment owed to government worker pension funds. Schools also would receive additional funding while property taxpayers would get a small annual rebate.

 

Despite the tax increase, Daniels said he's pleased to see Illinois finally may start paying its bills.

 

"That's just borrowing by a different name. They've been borrowing from the poor businesses that are suckers enough to do business with the state," he said.

 

Daniels also said he's surprised that two states as geographically and historically similar as Indiana and Illinois could be in such dissimilar financial shape.

 

"It does show that you can make very different choices, and the contrast between the choice we've made and the one they have is stark," he said. "Obviously I think ours is wiser, but self-governance means people get what they vote for."

[Balta1701]

Come on over to Indiana! Everything is cheaper here!

Correct. The way to a solid economy is budget cuts. Just look at how well it has worked for Indiana.

In 2004, when Daniels berated his opponent, Gov. Joe Kernan, for Indiana’s sluggish economy, Hoosiers earned 91 cents for every dollar earned by the average American. By last year, it was just 86 cents.

 

Adjusted for Indiana’s lower cost of living, Hoosier incomes have fallen from 98 cents for every dollar Americans earn, to 95 cents.

 

Daniels is quick to point out that declining incomes have been a problem in Indiana for decades. State economists have been writing about it since the 1980s.

 

But the wage gap is even wider now than it was during those Rust Belt days, and Indiana’s poorly educated work force is now seen as a greater liability than ever before. That’s a big part of the reason

[southsider2k5]

Correct. The way to a solid economy is budget cuts. Just look at how well it has worked for Indiana.

 

Given the choice between our situation and Illinois, I'll take Indiana every single time.

[NorthSideSox72]

illinois needs the $. No way around it. Plus we've got one of the lowest income tax rates in the country.

 

First, no, Illinois does NOT have one of the lowest. They have one of the lowest non-zero - there are something like 10 states with no income tax at all.

 

Second, yes they need the money - but they ALSO need to cut a lot of spending, cut a lot of waste, and fix the 238957208956723590682 pound gorrilla of pension systems.

 

It's still a p**** move to completely contradict a campaign promise within weeks of your election. Especially when you are already the Governor and knew the score when you made the promise to begin with.

 

Yes.

 

The corporate tax in Illinois is also going to nearly double from what I've read. Very bad move, as well as the other new taxes. Time for a recall.

 

That, to me, is actually worse than the personal income tax increase. Impact will be far worse.

 

[Rex Kickass]

First, no, Illinois does NOT have one of the lowest. They have one of the lowest non-zero - there are something like 10 states with no income tax at all.

 

Second, yes they need the money - but they ALSO need to cut a lot of spending, cut a lot of waste, and fix the 238957208956723590682 pound gorrilla of pension systems.

 

 

 

Yes.

 

 

 

That, to me, is actually worse than the personal income tax increase. Impact will be far worse.

 

Here's the problem with fixing the pension system. A lot of people paid into that pension system, my mom included, and didn't pay into Social Security because you used to be encouraged to do it that way. My mother worked as a college professor for the state for nearly 35 years, and dealt with a lot of s*** because of it. She earned every penny of her pension as part of the promise the state made for her service to the state. Reforming the pension system would have been simple back then, it was called funding it properly. Politicians chose not to, and its a mistake to think that the people who should sacrifice because of political malfeasance are the people who paid into that pension to begin with.

[NorthSideSox72]

Here's the problem with fixing the pension system. A lot of people paid into that pension system, my mom included, and didn't pay into Social Security because you used to be encouraged to do it that way. My mother worked as a college professor for the state for nearly 35 years, and dealt with a lot of s*** because of it. She earned every penny of her pension as part of the promise the state made for her service to the state. Reforming the pension system would have been simple back then, it was called funding it properly. Politicians chose not to, and its a mistake to think that the people who should sacrifice because of political malfeasance are the people who paid into that pension to begin with.

I certainly agree that you cannot just cut the system off. You'd ruin a lot of people financially. But then if you are able to properly fund it, people will ask why get rid of it? Then there is the lag problem - if you decide to fix it but also phase it out, in the short term, it actually costs you more money to save money later. For all those reasons, politicians are averse to facing reality and dealing with the problem.

 

[Y2HH]

It's not only that politicians didn't properly fund the pension systems, it's FAR worse than that. They borrowed money from the pensions, money that wasn't theirs, and then lost the that money on bad investments or to cover budget shortfalls, and haven't bothered to pay it back.

[Balta1701]

Clearly therefore, the answer is massive cuts in pensions, since those people are overpaid and greedy and lazy.

[NorthSideSox72]

Clearly therefore, the answer is massive cuts in pensions, since those people are overpaid and greedy and lazy.

Who said that?

 

[Balta1701]

Who said that?

No one here, but you know as well as I do that's what's going to be on the table. The right wing has been fairly relentless in decrying public employees as "overpaid" over the past year, and it's quite clear that pension cuts nationwide are going to be a major part of the states balancing their budgets this year.

[StrangeSox]

Duke Energy to buy Progress Energy (pending regulatory approvals). That would make Duke the single largest utility in the country.

[Cknolls]

People who are allowed to retire at fifty, do not contribute anywhere near enough to cover what they take out of the system. If you do not pay into ss, why are you able to retire and collect? Regular folks cannot do that. They have to wait until 62 minimum, for the most part to receive a partial benefit. Why should public employees be allowed to retire before the SS retirement age and collect? Insolvency solved. Why should citizens cover the losses in public employees pensions? Who covered everyone's 401k losses? The system is antiquated and should be fixed, and retirees and current employees should feel some pain.

[NorthSideSox72]

People who are allowed to retire at fifty, do not contribute anywhere near enough to cover what they take out of the system. If you do not pay into ss, why are you able to retire and collect? Regular folks cannot do that. They have to wait until 62 minimum, for the most part to receive a partial benefit. Why should public employees be allowed to retire before the SS retirement age and collect? Insolvency solved. Why should citizens cover the losses in public employees pensions? Who covered everyone's 401k losses? The system is antiquated and should be fixed, and retirees and current employees should feel some pain.

I actually agree with some of your points, but think for a second about part of the long term impact here. If you make the pension system a lot less "special" for teachers, firefighters, cops, etc., you will have a much harder time recruiting for those jobs. You will either get lower quality, or have to increase pay or other benefits (401k match is a good start), or both. That means higher costs of public service and/or lower quality results. I'm actually OK with paying a little more in taxes for those folks to be of higher quality, but many people won't be. A choice has to be made.

 

[mr_genius]

I actually agree with some of your points, but think for a second about part of the long term impact here. If you make the pension system a lot less "special" for teachers, firefighters, cops, etc., you will have a much harder time recruiting for those jobs. You will either get lower quality, or have to increase pay or other benefits (401k match is a good start), or both. That means higher costs of public service and/or lower quality results. I'm actually OK with paying a little more in taxes for those folks to be of higher quality, but many people won't be. A choice has to be made.

 

IMO, raising salaries wouldn't be necessary, considering we are going to have high unemployment levels for the foreseeable future. A lot of qualified people would love to have a firefighter or teaching job.

Edited January 10, 2011 by mr_genius

[Cknolls]

Of the 143 points the SPX was up in 2010, 134 occurred on the first trading day of the month. 94% of the move in 2010 occurred in 12 trading sessions. 2011 picking up where '10 left off, SPX up 14 and change to start the year and flatlining since. on a side note , the country to watch in Europe in '11, IMO, is ITALY. Keep it on the radar screen. Italian gov't. bonds(10yr) are up 1.04% since mid-Oct and yielding 4.79% as of 1/07. Spread over the Bund is 1.88%.Italy's debt/GDP ratio is 118%(2009). Greece got into trouble at 116%. Italy does have a smaller deficit and a high savings ratio, but Spain is in the cross-hairs with a debt/GDP ratio of under 60%. Should nominal GDP contract in ITALY its debt stats will worsen very rapidly.Italy is the elephant in the room not Spain. Italy owes France $511 billion, 20% of the French GDP. They also owe Germany $190 billion and Britain $77 billion.