The Paycheck Deduction Racket Every American Should Know About (especially Illinois)

[Playinghardball]

Right now, this is happening in Illinois, but if we don’t make a fuss it could soon be everywhere.

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

Source: MoveOn.org

[dtexdem]

1. Oh, gawd! The corporations never sleep, never stop finding ways to screw us.

And public officials and office holders never stop caving to it.

[daggahead]

2. Here in Michigan ...

I can definitely envision Rick Snyder setting this scam up ...

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[Lance_Boyle]

3. Anybody have a transcript?

I prefer reading over watching.

[hfojvt]

7. me too, especially since I now get no volume from internet explorer

so I had to switch to firefox to hear the video

It is David Cay Johnston, and he says that state income taxes get deducted from your paycheck, but they do not go to the state in Illinois. The employer gets to keep them, as a subsidy. This is only true of some big employers in Illinois. The companies keep half if you already work there, and keep 100% if you are a new hire.

It does not cost the employee any extra, they presumably still get credit with the state, but the state does not get the money, the corporation does.

[TwilightGardener]

4. That is outrageous. Fake income tax that never benefits the employee

in any way, shape or form = pay cut. All that money that could help the citizens of the state, pocketed by the 1%--sickening. Edit to add: is there any way employees could file a class-action suit to get the fake income tax back?

[spinbaby]

5. Could you tell us what this is about?

For those of use that can't watch videos.

[Earth_First]

6. The state allows major corporations in Illinois to keep the state payroll income taxes

In order to keep them in state.

Current employees result in corporations keeping 50% of the taxes collected, New hires; they are allowed to keep 100%

Not sure how this works...

[JHB]

8. Article on this by David Cay jounston (man in the video)

Paying taxes your employer keeps
Tue Jul 19, 2011 2:05pm EDT
by David Cay Johnston

(Reuters) - Painful as it feels to have a lot of hard-earned income taken from your paycheck for taxes, a new Illinois law does something Americans may find surprising. It lets some employers pocket taxes for 10 years.

You read that right -- in Illinois the state income taxes withheld from your paycheck may be kept by your employer under a law that took effect in May. Continental Corporation (CONG.DE), the big German tire maker; Motorola Mobility (MMI.N), the cell phone maker; and Navistar (NAV.N), the maker of diesel trucks for industry and the military, are in on the deal. State officials say a fourth company is negotiating a similar arrangement.

Chrysler and Mitsubishi arranged deals with the state in the depths of the Great Recession in 2009; Ford got one in 2007, since revised to let it keep half of its Illinois workers' state income taxes.

Instead of paying for police, teachers, roads and other state and local services that grease the wheels of commerce, Illinois workers at these companies will subsidize their employers with the state income taxes they pay.

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

[Spike89]

9. Not inherently wrong

As part of a progressive tax code, giving incentives to businesses that hire and retain workers is exactly what we need. The problem of course is that the corporate tax load is too low and therefore they aren't really needing to chase these tax breaks so hard.

Basically, if we doubled or tripled (or even more)the tax rates on business while at the same time giving them significant tax breaks for payroll, we'd have a job program that works.

I don't know all the details of this particular program, but subsidizing labor costs, providing tax breaks for domestic hiring, and other job-friendly legislation is pretty low on my list of concerns and in many cases, I'm in favor.