Metra should take credit cards -- a Senate bill would require just that

Yesterday Senator Michael Bond (D-Grayslake) and I held a press conference on his legislation that requires Metra to accept credit cards for fare payments.

I represent the Transit Riders' Alliance, a project of the Midwest High Speed Rail Association, and we enthusiastically support Senator Bond's bill. Hopefully Metra will just decide to start taking credit cards in the places where it immediately makes sense to do so. If not, we'll keep working to try to pass Senate Bill 577 into law.

There's a new service in the Illinois General Assembly's press room that offers a feed of press conferences. Here's the full, unedited C-SPAN-ish feed of the press conference.



And here is a story in the Daily Herald:

"The problem is fairly simple: they only accept check or cash," [Bond] said. "Metra is the second largest commuter train system in the country and happens to be the only one that doesn't take electronic payment."

Bond says checks are outdated and younger commuters today do not always carry checks or cash because they expect places to take debit or credit. The CTA currently takes credit cards as payment.

Judy Pardonnet, spokeswoman for Metra, said the agency is looking into the change to credit cards and said the procedure will be phased in.

Dan Johnson-Weinberger, representing the Transit Riders' Alliance, said many times people are unaware the trains don't accept credit and debit. "We believe there is some lost revenue from riders who would like to get on the train but because they don't carry a checkbook - and honest to God who does anymore? - and they don't happen to have cash on them, they can't buy," said Johnson-Weinberger.

Poll: Majority of >100K income earners favor a higher tax rate for high incomes

This report is a few months old, but particularly timely.

The Paul Simon Public Policy Institute at Southern Illinois University conducted a poll last fall and asked Illinois respondents what revenue-generators they would support. The most popular way for the State to raise more money was a federal-style progressive income tax where higher incomes pay a higher rate than lower incomes. 65.9 percent of respondents favored a progressive income tax.

Interestingly, while 74.2 percent of respondents who make less than $50K annually favored a progressive tax, and 68.9 percent of those who make between $50K and $100K favored the tax, more than half of the people who make more than $100K and would presumably pay the higher rate still favored a higher rate for themselves. 57.5% of the respondents who make more than $100,000 support a higher rate for higher incomes. (See page 26 of Professor Charles Leonard's Public Policy Institute Occasional Paper #12 to read the report yourself.)

Governor Quinn's proposal to raise the state's flat rate income tax rate from 3% to 4.5% combined with the uber-progressive move to triple the amount of tax-free income from $2,000 to $6,000 is as close to setting up a progressive tax as the General Assembly can get, since the Constitution unfortunately mandates a flat rate.

So while it is not only the right thing to do to tax lower income people less than higher income people (why would we possibly tax people who are earning money below the poverty line?), according to the SIU poll, it is also the most popular option on the table -- even among the people who would pay more.

I suspect a progressive income tax is popular because it is the right thing to do.

Media headlines are wrong: Quinn proposes tax cuts for most, tax increase for some

That's what the headlines should be about Governor Quinn's likely budget proposal.

The Governor has confirmed that he wants to cut the income tax for everyone by making the first $6,000 of income tax free. Right now the first $2200 of income is tax free. So the benefit is basically $120 from the 3% tax rate. And with a 4.5% tax rate, the benefit of not taxing an extra $4000 is $180. 

In other words, the Governor proposed an income tax cut of $180 for everyone.

He also wants to raise the income tax rate from 3% to 4.5%. Illinois has the lowest income tax rate of any state in the Union that has an income tax. We're lower than Indiana (at 3.4%). We are lower than every other state that has an income tax. So that is an income tax increase. 

To be clear, he proposed an income tax cut of $180 and then a higher rate of 4.5% instead of 3%. 

That is not a 50% increase.

Most people get a tax cut. (If you make $6,000 a year, you will pay less than you do today. That's a tax cut). A few people get a wash (the $180 tax cut from the personal exemption about equals the higher rate). And some people will pay more because the higher income tax rate will be bigger than the $180 tax cut from the personal exemption. 

So media headline writers! Don't screw this up! Quinn did NOT propose a 50% income tax increase! He proposed a tax cut and a tax increase. Most people will pay less (that's my initial cut of the math -- I may be wrong). Some people will pay more. But most people will NOT face a 50% income tax increase. 

And, since state income taxes are deductible on federal income tax returns, this is a really smart move, because it means that the actual dollars paid in taxes by our wealthiest Illinoisians (a group I hope to join), will not be 50% higher than they were before Quinn's proposal. For every dollar a millionaire pays in state income taxes, she cuts 35 cents off her federal tax bill. So the actual bottom-line increase for even the wealthiest people in Illinois is 65 cents on the dollar for every dollar increase in the state income tax (making the 50% increase even more incorrect).