Illinois employees pay tax directly to the employers, not the state

[lifesbeautifulmagic]

from MoveOn.

Apparently, in a bid to keep big corps from moving jobs out of state, Illinois is letting big companies pocket state income tax, and the end effect is that employees are paying tax, not for roads and schools, but directly to their employer.

http://front.moveon.org/the-paycheck-deduction-racket-every-american-should-know-about/#.TqhxHwjJsLs.facebook

Apologies if this has been posted before, I don't live in Illinois, so first I have heard about it.

People are paying TAX to employers for the privilege of having a job.

Ron Paul must be doing cartwheels in absolute delight, and so hoping to bring this to this state. How very fucking libertarian.

Please sir, may I have another cup of broth.

[valerief]

1. Holy freakin' shit!

[Lint Head]

2. This is fucking warped!

[lifesbeautifulmagic]

3. I know, I had to play the video a couple of times before

it really sunk in. To avoid cutting a check, Illinois is just letting these big companies KEEP the state income tax money, so we are paying DIRECTLY to the corp. That is so twisted.

Like the man says, we have to start screaming before this spreads to other states. I know the word fascism gets thrown around a lot, but paying taxes directly to corps is the definition of fascism.

[mopinko]

4. link

http://www.reuters.com/article/2011/07/19/column-dcjohnston-statetaxes-idUSN1E76H1YD20110719

[City Lights]

5. An employment tax. How nice! eom

[closeupready]

6. That amounts to a pay cut, of course.

nt

[DURHAM D]

7. That is F*CKING UN-AMERICAN.

I don't see how that is legal. An employer takes my money on behalf of the state and doesn't pass it on to them. I think the pay stub should be changed - instead of saying "State Withholding" it should say "Gift to Employer You Sucker".

I don't mind paying taxes to the state government but I do mind lining the pockets of my employer - esp. when they kept it a secret.

[joeglow3]

8. Extremely poor journalism

Does anyone have a link to a technical discussion of this?

On the surface, here is what I would guess is going on: Most states offer tax credits for investments in their state (both capital investments and job creation) - here in Nebraska, it is LB312. However, there is currently a beginning of a trend of states lowering their tax rates and just doing away with all the credits, as it can be difficult, from an administrative standpoint (i.e. Michigan). Clearly, the employee will file their Illinois personal income tax return and get full credit for their withholdings. I am guessing that instead of the state paying the costs to collect all the taxes and then turning right around and incurring costs to pay the money back as credits, they are simply allowing the company to keep the money and reduce they credits owed to them.

Now, there is a clear overriding issue of this blatant corporate welfare. However, I am guessing this is someone trying to sell us on something that is not as bad as we are led to believe, when the issue should be what it has always been - traditional investment credits.

Now, if this is what he is presenting it as, it is a big deal.

[Laluchacontinua]

10. hard to tell, but david cay johnson is highly reputable.

http://www.reuters.com/article/2011/07/19/column-dcjohnston-statetaxes-idUSN1E76H1YD20110719

[area51]

9. Kick. n/t

[closeupready]

11. On the other hand, this is the state that gave the world Blagojevich. So,

nobody should be all that surprised. Kicked for morning readers.