Illinois Review

Di Leo: What’s Twenty or Thirty Cents Among Friends?

By John F. Di Leo 

The bankrupt city of Chicago’s outgoing Mayor, Rahm Emanuel, and the bankrupt state of Illinois’ incoming governor, J.B. Pritzker, are calling for a huge increase in Illinois’ gas tax, ostensibly to fund a major transportation bill.

Illinois hasn’t raised its gas tax, now at 19 cents per gallon, since 1990.  If we were to keep up with inflation, a 20 to 30 cent per gallon increase – that is, to double it or more – would be reasonable, in their view.  They’re just proposing that it keep up with inflation since 1990, that’s all. 

Or maybe raise it a little more than that, while we’re at it, just for good measure…  I mean, as long as we’re in there anyway, may as well make it worth the trip, right?

And on its face, that does make some sense.  Look at inflation since then.   On its face, viewed in its own “petri dish” setting in a controlled environment, such an increase is perfectly logical.

But does the real world work like a controlled environment?  Can tax policy, in fact, ever be set without consideration of the real world around us?

Di Leo: Great Britain’s Brexit Challenges, and a Lesson for Americans

By John F. Di Leo-

Have you ever hired a militant vegetarian chef to cook you a steak?

Would you hire a pacifist as Commander-in-Chief during wartime?  Or a 600 lb personal trainer to supervise your weight loss program?

This is nothing against vegetarians, pacifists, or weight-challenged folks, by the way; it’s just a means of making a point:

To get a job done, the person charged with implementing it MUST believe in it. It can't possibly go well if he doesn't, because the original outline will need details fleshed out.  If the implementer doesn’t believe in it, he or she has practically no chance of doing it the way the hiring party wanted it done.

Our neighbors across the Pond – the voters of Great Britain – are learning that lesson the hard way.

Di Leo: Perfect Timing for Corrections in International Trade

By John F. Di Leo - 

Reflections on the latest summit in the southern hemisphere…

The heads of state of the USA, Mexico and Canada signed the new NAFTA 2.0 – the USMCA – early Friday morning in Buenos Aires, as they prepared to meet with more world leaders for the latest G-20 summit.   But despite that happy signing ceremony, it’s the rougher aspects of the trade wars of 2018 that weigh heavily on everyone’s mind.

Some would assume that these trade wars are all of Donald Trump’s making, but they would be mistaken. 

• Great Britain’s challenges in extricating itself from the European Union are of Brussels’ making.
• The American loss of much of our manufacturing, especially of steel but not remotely entirely of steel, is of the making of 50 years of union-and-statist American burdens.
• The flaws in existing free trade agreements are of their original negotiators’ making.
• And our special challenges with Mainland China today, as we lead the effort to try to reclaim the world’s manufacturing from a single country bound and determined to dominate the world economy, have too many causes to list (though that list must begin with American capitulations in the 1970s).

Two quiet issues – barely addressed in the news media on this side of the Pond – are the questions of whether the USA and Great Britain will manage to negotiate a Free Trade Agreement, and whether the USA and the European Union will do so as well.

From $15 per hour minimum wage to DACA support, women's group announces legislative priorities for 2019 session

SPRINGFIELD - With Democrats in total control of Illinois' three branches of state government, the leftist group "Women Employed" published their top priorities for Governor-Elect JB Pritzker to sign into law. In many cases, they seek the same legislation Republican Governor Bruce Rauner resisted over the past four years. 

The group's list of demands - from a $15 per hour minimum wage statewide to support for DACA recipients - will weigh heavily on Illinois business owners already paying some of the nation's highest property taxes. 

Women Employed expect to participate in enacting with a Democrat super majority in the Illinois House and Senate, and a Democrat in the Governor's Mansion the following:

Study shows excessive lawsuits cost Illinois $12B annually

SPRINGFIELD - Illinois loses an estimated $4.5 billion every year in direct costs along with $7.7 billion in output due to excessive lawsuits - an industry that heavily contributes to keep Democrats in power at the state capitol. (As of October 1, 2018, the Illinois Trial Lawyers Association PAC donated $299,000 to Democrat legislative candidates in the past three months.)

That's what the Illinois Civil Justice League (ICJL) reports Monday, based on the 2018 Economic Benefits of Tort Reform, an assessment measuring the impact of excessive civil court costs on Illinois’ economy.

Di Leo: Global Trade and the Challenges of Intellectual Property

By John F. Di Leo - 

As the Trump administration has focused heavily on trade this year, it has been instructive to note the weight that has been placed on intellectual property, in both the negotiations and the results.

The new USMCA treaty – the intended replacement for NAFTA – includes a whole chapter on intellectual property (IP).  2018’s wave after wave of punitive tariffs on Chinese goods, too, have been imposed in an effort to stem not only the loss of American jobs to China, but the loss of American how-to as well.

Even the new layers of 10% and 25% additional tariffs on raw materials of steel and aluminum, generally dismissed as job protection efforts, are actually designed, at least in part, to help keep the technology associated with such materials here in the United States.

Di Leo: NAFTA 2.0 and a Return to Focus

By John F. Di Leo -

Bringing it in just under the wire, negotiators representing Mexico, Canada, and the United States announced a new trade deal, to be named the USMCA, on Sunday, September 30, enabling the replacement for NAFTA for which many have long clamored.

With the agreement to switch to this new program, the three nations are taking some steps – however small – back in the direction of the goals that Free Trade Agreements have always promised to support, but which have been largely forgotten in the quest for their side effects.

Free Trade Agreements, in fact, are not designed to reduce taxes and increase inexpensive imports.  These may be benefits, certainly, for business and consumer alike, but they are really, primarily, just the incentives used to make some progress in obtaining the main goal: slowing or even reversing the ongoing loss of domestic manufacturing to third world competitors.

Ford blames Chinese tariffs for $1billion profit loss in 2017

Despite a reported net income in 2017 of $7.6 billion, the most since 2013, Ford CEO Chief Executive Officer Jim Hackett said this week the Chinese tariffs cost the company $1 billion in profit loss last year.

“The metals tariffs took about $1 billion in profit from us -- and the irony is we source most of that in the U.S. today anyways,” Hackett said in an interview on Bloomberg Television. “If it goes on longer, there will be more damage."

Thorner/Ingold: The Truth About Trump's Tax Cuts and Jobs Act

By Nancy Thorner & Ed Ingold - 

It was on Friday, December 22, 2017, when President Donald Trump signed into law H.R. 1, known as the Tax Cuts and Jobs Act. H.R.1 makes widespread changes to the Internal Revenue Code.  Almost all of its provisions, including a lower corporate tax rate of 21% and lower individual income tax rates, go into effect Jan. 1.  See here to view H.R. 1. 

The legislation was passed on fast track. Introduced in the House of Representatives on Nov. 2, 2017, it passed on Nov. 16, 2017. The version the House passed repealed the medical expense deduction, as well as many other individual tax deductions, and further reduced the number of individual income tax brackets from seven to four.

Di Leo: Media Hysteria and Historical Context in the NAFTA Discussions

By John F. Di Leo - 

Every time the President talks about trade negotiations, it makes the news. On July 18, he mentioned – for the umpteenth time – that he might prefer to break NAFTA up into two agreements, and the press went ballistic again.

We have hundreds of major issues in United States politics – taxes, unemployment, crime, foreign policy – and people can talk comfortably about them because they are always on the collective mind.   But trade is different; it’s only an issue once every generation or so.  So this is an issue with tons of misconceptions, not only in the electorate, but in the business community, and particularly the press, as well.

For example, the press goes crazy at the idea of breaking up NAFTA, as if having two individual Free Trade Agreements (FTAs) would be weird.  Do none of these reporters know that the USA currently has FTAs with 20 countries – yes, twenty – and there are only two multiparty agreements in the bunch? 

We have individual agreements – two-party – agreements with Chile, Australia, Singapore, South Korea, Peru, Panama, Colombia, Israel, Jordan, Bahrain, Oman, and Morocco.  They work fine.

Our only multiparty FTAs are NAFTA and DR-CAFTA, and the press acts as if that approach is the norm!  Well, it isn’t, and for good reason.

Chicago's Black Exodus

Chicago was once the black Metropolis.... now it's the home of the Great Black Exodus.

Di Leo: Free Trade, Fair Trade, and the Question of the Year

By John F. Di Leo -

International trade has always been in the news.  Business reporters talk about a trade deficit, politicians wail about jobs being exported overseas, and every so often, the government signs a new free trade agreement or trade promotion agreement (they are different things) with one or two or a hundred faraway countries.

But despite all this, international trade policy has not been at the forefront of the news cycle in a generation; not since the US-Canada Free Trade Agreement was voided 25 years ago, to be replaced by NAFTA, a three-party FTA between Canada, the United States, and Mexico.

Thanks to the election of Donald Trump, and his dogged determination that this country change its approach to trade, the issue is back at the water cooler again, and we can assume it will remain there throughout his presidency.

Rhoads: Confused Court Muddles Net Sales Tax

By Mark Rhoads -

A befuddled collection of both conservative and liberal U.S. Supreme Court justices thinks that they can help greedy state revenue directors collect more sales tax on internet shoppers.  They are wrong on several levels, both on principle and technical applications in their attempt to overturn Quill Corp. v. North Dakota 504 U.S.298 (1992) that held companies must have a physical presence in a state to be subject to sales tax for mail order and later internet sales. 

The odd group of liberal and conservative justices in the 5 to 4 majority were Justices Anthony Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch.

Chief Justice John Roberts led four other justices in dissent. The minority wanted Congress to act.

But in an odd way, both the majority and minority have shown how ignorant they are about how online sales work and how they defy geography.

Republican-backed Farm bill moves to US Senate

WASHINGTON, D.C. — Along party lines, all Republican members of Illinois congressional caucus supported H.R. 2, the Agriculture and Nutrition Act of 2018, Thursday. No Illinois Democrats supported the the measure - including Cheri Bustos, whose 17th District includes substantial farming acreage. The bill now proceeds to the U.S. Senate for approval.

H.R. 2 reauthorizes and strengthens agriculture policy for the Department of Agriculture through 2023. It improves policies related to

• crop insurance,
• trade,
• regulatory reform, and
• nutrition programs such as the Supplemental Nutrition Assistance Program (SNAP).

Thorner: Trump works to shrink America's debilitating trade deficit

By Nancy Thorner - 

As noted in an article by Kimberly Amadeo, updated May 10, 2018:  The United States has the world's largest trade deficit. It's been that way since 1975. The deficit in goods and services was $566 billion in 2017. Imports were $2.895 trillion dollars and exports were only $2.329 trillion.

The U.S. trade deficit in goods, without services, was $810 billion. The United States exported $1.551 trillion in goods. The biggest categories were commercial aircraft and automobiles.

Worth noting is that we have the largest deficits with our top five trading partner (Census provides trade data by country for goods only, not services): 

• China- $636 billion traded with a $375 billion deficit.
• Canada- $582 billion traded with an $18 billion deficit.
• Mexico - $557 billion traded with a $71 billion deficit.
• Japan - $204 billion traded with a $69 billion deficit.
• Germany - $171 billion traded with a $65 billion deficit.

Di Leo: Mayor Rahm and the "Right" to Pre-Kindergarten

Chicago Mayor Rahm Emanuel Twitter feed photo

By John F. Di Leo - 

On May 31, Chicago’s Mayor Rahm Emanuel announced a plan to bring free universal all-day pre-kindergarten to all the people of Chicago. The local news media focused on the structure of his announced plan – it’s designed so that it only happens if he’s re-elected, so it’s clearly designed as a re-election campaign tactic. But then, when in history have expansions of government not been tied to election campaigns?  That’s hardly news.

No, what this humble reader found interesting about the announcement was the Mayor’s office’s approach to it.  Rahm Emanuel believes that poor children should have the same right to pre-kindergarten that wealthy children have.

"Right?"  When exactly did free all-day preschool become a civil right?

Has our society so completely lost track of what rights are, that we are no longer shocked by hearing a politician abuse the term?

Di Leo: From Foreign Vendors to Local Banks: Tariffs and Regulations in the Crosshairs

By John F. Di Leo -

After three months of saber-rattling on the trade front – including the implementation of high duties on imported steel and aluminum, and threats of similarly high tariffs on a host of business and consumer products both from and to China – the dust appears to have settled for a while, with an announcement that China will work to import more from the USA, and a tentative agreement that a trade war would be bad for everybody. 

Within days, there were fresh discussions of new tariffs on other products that hadn’t been discussed previously - like cars and trucks – also based on the recognition that a weakened and minimized manufacturing sector isn’t just bad for the economy, it’s bad for national defense.

Di Leo: What Do Taxes Do For Us?

 

By John F. Di Leo - 

As you may have heard, Illinois has a pension problem.  

Now, that’s not Illinois’ only problem, of course. Illinois also has a crime problem, an education problem, a quality-of-life problem, a transportation problem, a public corruption problem, an unemployment problem, and a population shrinkage problem.  Frankly, there isn’t enough room in this column to list all of Illinois’ problem, but that’s a start.

The Chicago Fed – that’s the Chicago branch of the Federal Reserve System – has proposed an idea for dealing with a part of Illinois’ pension problem. Since the problem is that many state and local government pension funds were criminally-underfunded for decades (on purpose, since Illinois politicians believe you can always just raise taxes later), the Chicago Fed has proposed a trial balloon: a thirty-year special assessment of an additional 1% of home values.  Only for thirty years or so.

Don’t worry that this proposal would only address the five pension funds administered by the state. The other 650 or so government pensions across Illinois, and all of Illinois’ many other problems, would remain unaddressed by this proposal… but at least those five state pension funds would finally be made whole.  In thirty years.  They hope.

Di Leo: Local Shade and International Trade

By John F. Di Leo - 

As the weather warms in May, and neighbors start taking constitutionals around the neighborhood again, we enjoy the fragrance of the flowering trees – apple, cherry, magnolia – and the spring colors of the flowering hedges – lilac, forsythia, and rhododendron.  True, the flowers don’t last long… so we enjoy them while we can.

As we watch, the buds grow fatter on the branches, as bursting leaves prepare to follow the spring blossoms.  Once the early petals are shed, these bushes and trees will be covered with leaves, as the magic of photosynthesis takes over and enables our neighborhood greenery to thrive for another year, rewarding us with the tree-lined streets we treasure.

To look at them, you’d never know that there’s a silent attacker, burrowing deep inside some of our trees – especially the quieter ones, the non-flowering trees like our stately oaks, elms, white fringetree, and especially ash and maple – those invasive insects of distant origin that feed their young by destroying our trees.

Di Leo: Made in the USA? Don’t Judge a Book by its Cover.

By John Di Leo - 

Much of the business news in 2018 has concerned the Trump administration’s impositions of new tariffs on imported goods.  While there is enormous debate over the question of whether this is the best response to the problem or not, it is difficult to deny that there is, in fact, a problem, and that it’s high time this problem received some national policy attention.

The United States was long a manufacturing powerhouse.  From the mass-produced automobile to the Troy Shirtmakers’ Guild, American industry topped the world for at least half a century in innovation and output.  We wore American clothes, drove American cars, used American appliances in our kitchen and American power tools in our workrooms.

Di Leo: A Farewell to Carson’s, and the Assignment of Blame

 

By John F. Di Leo - 

For over a century, Chicagoans grew up with a signature memory: special days downtown, shopping at Marshall Field’s and Carson’s, the great rival retail giants down the block from each other on State Street. (shown here: Carson's longtime downtown landmark by Louis Sullivan, sold off years ago).

Smaller stores came and went, but Field’s and Carson’s were the giants, the dominant figures in Midwestern retail for generations.

Macy’s bought out the struggling Field’s chain over a decade ago and cremated the brand name while keeping the stores.  Carson, Pirie, Scott & Co. wasn’t so lucky; its current holding company, Bon-Ton, is giving up the ghost for good this spring.

Unable to find a buyer or investor to keep the chain alive, Bon-Ton is shuttering its 200 stores and terminating its many brands. Along with Carson’s, we’re likely saying goodbye to Bergner’s, Boston Store, Younkers, Elder-Beerman, and Herberger’s (though there’s still a chance that the liquidation might leave one or two of these names standing, God willing).

Di Leo: The Potholes of Spring

By John Di Leo - 

Reflections on Illinois roadways and the speed bumps of the General Assembly...

When you or I walk outside in the spring, and see that the winter has left behind a few reminders on our driveways – a pothole, a chip, a crack – we check the finances, and perhaps we have the driveway completely repaved…

…But much more likely, we head to the local hardware store, pick up a bag of concrete mix or blacktop patch, and get to work on our hands and knees with our trusty trowels.

While fully repaving the driveway is certainly a “nice-to-have,” it’s hardly a necessity, compared to all the other demands on our overstretched personal finances. We prioritize. The mortgage comes first; the kids’ tuition, the spouse’s surgery, the car repairs, the property tax bill … all these rank higher in their demands on our checkbooks. 

So we just fix the driveway to make it passable, rather than spending money we don’t have to make it perfect. We just make it last another year.

Oh, if only our government felt that way.

Di Leo: Are Tariffs Really Taxes on a Foreign Country?

By John F. Di Leo - 

What exactly IS a tariff? 

We hear about them occasionally in economic and political discussions, but folks who aren’t involved in international commerce never directly encounter them, and therefore may not really know what a tariff is, or how it's applied. Since some politicians - particularly labor union types - advocate hiking our tariffs, they often give the false impression that tariffs are assessed upon foreign countries.

It's almost impossible to tax another country. A government can only tax people or businesses inside its own country (if a Japanese or Dutch conglomerate owns a factory in the USA, then yes, the US government can tax that US factory… but that's about as far as it goes).

Di Leo: The False Promise of Tariff-Driven Prosperity

By John F. Di Leo - 

Tariffs are a wonderful idea, aren’t they?

A tariff – technically, a tax on an imported good, usually as a percentage of the good's value – sounds almost too good to be true.  A tariff raises money on imports, but encourages Americans to stop importing, and to buy local goods instead of foreign; it serves a foreign policy purpose by punishing our enemies, and it helps pay for seaports and border protection.  Quite a multifaceted, targeted tool.

It’s like one of those magical diet pills that helps you get thinner in the waist, broader in the shoulders and chest, make your hair thicker, give you more energy, and add twenty years to your life.  Of course, such magical diet pills always turn out to be fictional… and in many ways, so do the benefits of tariffs.

Now, that’s not to say that tariffs are objectively a bad thing.  Government has to raise revenue somehow, to pay for the military, the roads, the national parks, and ten times more services than the Constitution even allows. If we have to raise money somehow, we may as well do it with tariffs.  Objectively, they’re no more or less moral than sales taxes, social security taxes, income taxes and property taxes.

Di Leo: Federal Budget's Red Ink and Storm Clouds Aren’t Black and White

By John F. Di Leo - 

Reflections on a Federal Budget Impasse...

During the February budget showdown in Washington, Senator Rand Paul rose to speak. He reminded America of our spending habit – a constant pattern of deficit spending, year-in and year-out, in both Republican and Democrat administrations. A spending habit that doesn’t just cause a year of trouble, but an eternity of trouble, since these deficits add up, year by year, into a mountainous national debt, one that doubled – Doubled! – in just the eight years of the Obama administration alone.

And he is right. ...

IL GOP Congress members call on Senators Durbin, Duckworth to re-open government

WASHINGTON DC — Members of the Illinois Congressional Delegation released a statement Monday urging Senators Dick Durbin and Tammy Duckworth to re-open the government. The Senate is expected to vote at 12:00pm EST Monday on a Continuing Resolution (CR) to fund the government through February 8 and fully fund the Children's Health Insurance Program (CHIP) for six years.

Di Leo: 2018 Begins with a Cornucopia Created by Tax Reform

By John F. Di Leo - 

We've all heard the stories about how several big companies decided to give bonuses immediately after the December 2017 tax reform was passed... but the mainstream media quickly dropped the story.

What we haven't heard about over the past week or so is how the list of companies has grown. (compliments to the good folks at Americans for Tax Reform for committing to build a running list online).

Some are relatively small businesses, like banks that have a couple hundred employees... but it's remarkable how many big companies have jumped on the bonus bandwagon too. For example: 

• AT&T: $1000 each to about 200,000 employees.
• American Airlines: $1000 each to about 130,000 employees.
• Bank of America: $1000 each to about 145,000 employees.

Di Leo: In the Coming Boom, Inequality Will Be By Choice

By John F. Di Leo - 

What is it that ends a recession, and finally brings about an economic boom?

After a long and painful “non-recovery recovery” – a decade-long stretch in which job growth and the labor force non-participation rate remained flat – the federal government has finally accomplished, in 2017, the primary contributions that it can make to bring about a real recovery:

By year-end, Congress had passed, and the president had signed, a long-overdue tax cut, reducing the tax rate that employers pay by nearly a half.  It wasn’t enough, and we will need to add additional cuts in a phase two and phase three that are yet to come… but it was a critical first step.

Di Leo: Finding Winners and Losers in the 2017 Tax Reform

By John F. Di Leo - 

The primary goal of the mainstream media and their puppets in Washington known as the Democratic Party (or is it the other way around? It’s so hard to tell these days…) is now to study the 2017 Tax Reform plan and identify who directly benefits most, and who directly benefits least, so that the program can be portrayed as a contest between winners and losers.

This is logical in their zeitgeist – a world that operates under the “zero sum game” theory of the anti-capitalist mentality. They believe the economy is a pie, so if someone gets a bigger slice, then by definition someone else’s slice must be shrinking.

Never mind that any objective study of history proves the zero sum game to be utterly false… never mind that economies expand based on the actions and choices of individual and groups, to the extent facilitated or restrained by the leviathan. Thousands of years of continually expanding economies are apparently not enough data for the Left to break from their core belief that for one to benefit, someone else must suffer.  It is a religion for them.

Di Leo: Pop tax repeal victory on Lake Michigan: No Tar and Feathers Needed

By John F. Di Leo - 

Voters in Crook County, Illinois, among the highest-taxed jurisdictions in America, are celebrating a victory today.

In November, 2016, the Cook County Board of Confiscators passed a massive, targeted tax increase, known as ‘the soda tax’ or ‘the sweetened beverage tax,’ though all its names were deceptive, falling short of the full implications of this huge tax on purchases of most non-alcoholic beverages in any venue (from grocery stores to fast food restaurants, from gas stations to bars).

Despite a short judicially-issued delay, the tax went into effect in August, and did so much damage – as predicted – that the county board acknowledged reality quickly and revoked the tax in the fall, scheduling it to terminate at the end of November. This experience provides an opportunity to note – and learn – several economic and political lessons. 

Di Leo: What Are “Tax Rate Cuts” Really For?

By John F. Di Leo  -

When a new tax cut plan is announced, there are three common responses:

• From the Left, it’s about class envy: How much more money will the rich get to keep?
• From the press, it’s about the deficit: In this world of (an imaginary) zero sum game, how much will this reduction in tax revenue cause the deficit to grow?
• And from the typical American citizen, it’s about our own personal tax returns: How much money will this save me, personally, on April 15?

It’s not that one or two of these are wrong questions… it’s that all three are.

Di Leo: The Modern Left and the New Death Penalty

By John F. Di Leo -

It is well known that the modern Democratic party does not believe in the concept of capital punishment for crimes, even for the crimes long regarded as of a “capital” nature, such as murder, violent robbery, violent rape, and treason. They advocate jail time, preferably brief, in cozy, comfortable cells, of regulation size… and if there isn’t enough room, the Left mandates that the prisons be opened so the overflow can walk free, rather than be incarcerated for their crimes in harsh, uncomfortable surroundings.

But this isn’t to say that the modern Left opposes the death penalty completely. In fact, there are many whom the modern Left condemns to death, every day, though not in so many words.

Consider, for example, the children in the inner cities, shot in their yards or on their porches by the drive-by killers of the street gangs who rule their neighborhoods. Since it is the American Left who has redrawn the criminal justice system to invite in foreign villains, or to enable homegrown ones, by ensuring that even caught-and-convicted criminals run free, is it not the American Left who condemned these innocent children – sometimes hundreds per year – to a violent death, the tragic targets of the gang violence of Chicago, New York, Detroit, Milwaukee, and Los Angeles?

Di Leo: Washington D.C. and the Problem of Time

By John F. Di Leo - 

“We have plenty of time.”

When we’re young, everyone thinks we have time… plenty of time.

We tell our children to study, to eat, to exercise, to learn, and they look at the clock, and they look at their parents, and what do they think? “What do those haggard, grey-haired grown-ups know? I’m a kid; I have plenty of time.”

The same continues as we age. In our twenties, we date for fun and put off marriage; there’s still plenty of time. In our thirties, we spend our money on houses and vacations rather than saving for retirement; there’s still plenty of time. 

Only later, often much too late, do we realize there wasn’t time after all, and we should have focused on what mattered, and made it happen, when we were young, and had energy, rather than letting those golden opportunities pass us by.

Di Leo: The Democratic Party and the War on Work

By John F. Di Leo - 

Reflections on Labor in America, on Labor Day Weekend

The Friday that began Labor Day weekend, 2017, brought with it a disappointing jobs report. While the economy is still growing, and the stock market is booming, the most personal statistic of all – whether a person is employed or not – is the most frustrating one to watch.

We should begin the discussion by considering the flaws of these statistics.  Unemployment and jobs are tricky things to measure, because a part time job isn’t the same as a full time job, one person’s home business isn’t the same as another person’s home business, and a minimum wage job that serves as the first rung of a career ladder is a world away from a job that pays the same but provides no advancement opportunities.

So – while the difference between a 300,000 new jobs month and a 156,000 jobs month is obviously huge – we should avoid getting stuck in the numbers and instead look at the big picture.

Rather than asking why aren’t more jobs being created, we should be asking why should they?

Di Leo: American Politics Enters The Bronze Age

By John F. Di Leo - 

The top marginal federal income tax rate in the United States – for businesses and for people who file as businesses – is 39.6%.

As a result, businesses do not grow as they should.  Businesses do not thrive as they should.  Businesses do not produce, or invent, or add on, or hire, as they would if their tax burden were lower.

International corporations therefore find that they must do more and more of their manufacturing abroad, where their profits are not so severely penalized.  And domestic corporations do not prosper… and would-be entrepreneurs do not start-up new enterprises here, because in the United States, today, success itself is penalized.

Di Leo: One Day at the Checkout Line, in the Age of Preckwinkle

 

By John Di Leo - 

Like many Chicagoans, I live in one county and work in the next one. So, sometimes I do my shopping near home, and sometimes I do my shopping at lunchtime, near wo

I'd rather not do it at lunch, frankly, because I don't have time for long lunches.  The modern economy requires people to stay at their desks and work full days, sometimes very long hours, so people are now much more likely to pack a lunch than in the past, or to just duck out for fast food and head back to the office.

The new Cook County beverage tax has kicked in, though, so some of us don't have a choice anymore. Instead of shopping at home in the evening, I shopped in DuPage county at lunch yesterday. This means that the sales tax on my purchase was just 7.5% instead of Cook County's 10%, and there was no penny-per-ounce beverage tax at all.

Di Leo: Lessons from a Busy Flagpole: Everything Government Does Has a Cost

 

By John F. Di Leo - 

We live our private lives with choices, some expensive, some cheap, some free.

We can choose to buy tickets to the theater, or watch free television at home... we can choose to buy an expensive dinner at a restaurant, or whip up something at home with whatever we have in the fridge... we can go to a hotel on vacation, or stay at home. We have lots of options that are virtually free, so when we need to tighten our belts, there are plenty of ways to do so.

Government is different. Virtually everything that government does costs money. Even things that would appear to be free.

Sometimes more, sometimes less... but if government does it, there is a cost.

Di Leo: Dining in Cook County: Just a Sandwich Today

By John F. Di Leo - 

On the way in to the office today, I made my first retail food purchase in Cook County since the new Democrat Tax kicked in. I stopped at a fast food place for a sausage biscuit for breakfast.

I usually order a drink with it, but not today; I was in Cook County. A simple drive-through order that’s normally about two bucks, or maybe three (depending on the size of the drink) was just a dollar plus tax.

Most Cook County residents are making the same kind of decision nowadays, as we switch to making our grocery purchases, fast food stops, and restaurant dining options take place on the other side of the border, in Lake, Kane, DuPage, or Will, or even in Indiana.

These changes will sometimes move a fifty or hundred dollar order across the line, but sometimes just a little two dollar order like mine this morning. Big or small, they all make a difference.  If I had been thirsty, I would’ve waited, and stopped on the DuPage end of my commute.  But I wasn’t especially thirsty, so I stopped in Cook County and just had the sandwich.  

Di Leo: When Twenty Deportations Aren’t Enough

By John F. Di Leo - 

The news of the day concerns a repeat offender, so we will begin with the news, then move on to the analysis:

Sergio Jose Martinez, age 31, having been deported twenty times previously, was arrested in Portland, Oregon on July 24, having broken into the home of a 65-year-old woman, where he raped and beat her, then stole her car, a 2011 Toyota Prius.

Di Leo: The Bastille, Mob Rule and Emptying of Prisons

 

By John F. Di Leo - 

Reflections on big city life on Bastille Day…

Every year on July 14, the French celebrate Bastille Day, the beginning of the end for the Bourbon monarchy, and, ostensibly, the rise of the power of the people.

Even here in the United States, an ocean away, with only the slightest connection to the French people and culture, we enjoy the day as an unofficial holiday. We drink French wine, enjoy brie and crackers, and sing Le Marseillaise (in the original French, of course).  It’s an excuse for a sale, for a party, for a festival.  As long as we don’t dig too deep.

But when we do dig deep… when we do take a moment to think about what happened to France in the 1790s… we cannot help feeling the horror of an age in which a city lost control to madness… and if we dig just a bit deeper, we may find painful similarities to our own time and place.

Di Leo: Want A Drink, Friends? Here’s the Last Straw.

By John F. Di Leo - 

Reflections on doing business in Illinois in 2017…

The pundit class, and our cousins in the political class as well, have said and written much about the spate of new taxes, spending, and regulations in Illinois that have hit, and will continue to hit, in Chicago, in Cook County, and across Illinois this year.

First, the minimum wage was hiked… Illinois was already a dollar over the national minimum wage, so Cook County passed an ordinance to jump to $10/hour on July 1, 2017, then to increase by another dollar per year through 2020, when it would hit $13/hour… and in case that’s not enough, the County built in formulas so that it would continue to grow. Along with that, the county board added a costly paid-sick-leave mandate, a nice benefit for companies that can afford to offer it, a costly expense for companies that cannot.

Then the Cook County Board of Confiscators added a beverage tax, intended to kick in on July 1 as well, which would add anywhere from 30% to 70% (or sometimes even more) to the bottom line cost of most beverage purchases within the county’s borders   (a judge, unusually shocked by the scattershot approach, put it on temporary hiatus to confirm the mess’ constitutionality).

Then on July 6, the state legislature overrode a gubernatorial veto, to raise the state’s income tax rates by another third.  That’s a 32% increase in the personal tax rate, and a 33% increase in the corporate tax rate.

Di Leo: Cook County Residents Rejoice at a Deus Ex Machina

By John F. Di Leo - 

Life in Chicagoland, and the unfulfilling refreshment of a temporary stay…

For all we like to say about the great culture of ancient Greeks – for all intents and purposes, they invented theater, you know! – they were really just as human as the rest of us.  Sometimes, no matter how well the story was going, they wrote themselves into a corner.  There was just no way to resolve the situation and end the play.

So what did they do?  They rigged up a contraption to lower Zeus down from the sky and utter some final judgment from Olympus that would resolve the conflict, punish the villains, send off the hero with a deserved bow, and save the poor playwright from having to come up with yet another convoluted act for us all to suffer through.

They called this technique a Deus Ex Machina – literally, “God from the machine.”   When not only the cast and crew, but even the writers, are all stuck without an option, they call on the Heavens to save them.  And sometimes it works.  On the stage, anyway.

So it was in Chicagoland on Friday, June 30, in Cook County, Illinois, as the businesses and residents of one of America’s largest metro areas faced the last day before a massive new tax, ranging between thirty and seventy percent, was to kick in on almost all non-alcoholic beverage purchases.  And they prayed for salvation from the heavens, in the form of a judge, Daniel Kubasiak, who might, just might, issue at least a temporary stay on this outrageous new tax.

Di Leo: Burdens of Taxation? Cook County's new soda tax just a drop in the bucket

By John F. Di Leo - 

On July 1 – barring a court order or a last minute act of legislative wisdom or fear (at this point, we’ll take either) – Cook County will implement a “Soda Tax,” a brand new penny-per-ounce beverage tax on non-alcoholic drinks that exceed certain threshold of either regular or diet sweeteners. It will capture virtually all regular and diet soda pop, most juice drinks, and either many or most other flavored drinks, such as sport drinks, frappucinos, sweetened or diet iced teas, lemonade, etc.

Much has been said and written about the outlandish nature of this tax. Charged in addition to already record-setting state and local sales taxes, the penny-per-ounce Cook County soda tax will range from 25 to 50 percent of the price of the beverage, a simply unprecedented rate of taxation for such a product. (As just one example, this author regularly buys a 24 pack of Diet Dr Pepper for $5.88; the new tax will be an additional $2.88 on that case, a 49% tax rate).

The news of the day, however, gives us an opportunity to study other aspects of this case besides the confiscatory nature of the tax itself.  On Tuesday, June 27, very much at the proverbial eleventh hour, the Illinois Retail Merchants Association, joined with many grocery stores and other retailers, filed suit against the County on the grounds that this tax is unconstitutional under state law.

Cook County, A Soda Tax, and the Death of an Economy

By John F. Di Leo - 

Contemplations on the new Cook County Soda Tax

Cook County, Illinois - the home of America’s fourth largest city - Chicago, is, like many metro areas, broke. So, as many jurisdictions do when broke, they imagine a need to raise tax rates. 

The one they have chosen for July 1, 2017 is a soda tax, in addition to any applicable sales tax, which in Illinois can be as high as ten percent ad valorem already. This new “soda tax” is not just on soda, but on any beverage that is sweetened with either sugar or artificial sweetener (so it applies to both regular drinks and diet drinks), from soda pop to children’s juice boxes, from bottled iced teas to sports drinks. And the price will not be ad valorum (a percentage of the price) as we’re accustomed; it’s a penny per ounce.

So if you buy a package of 10 x 6.75oz juice boxes for your children’s lunches, there’s another 67.5 cents for the county on top of the $2.00 for the juice. If you buy a large Coke or Diet Coke for a dollar at McDonald’s or some other restaurant that 32oz drink alone will add another 32 cents to the bill. And if you buy a 24-can case of pop at the grocery store, which usually costs between six and nine dollars around here, that’s another $2.88 in taxes for that case.

Di Leo: Springfield – The City That Banned Capitalism

By John F. Di Leo - 

Perhaps we should begin by acknowledging the fact that the headline isn’t exactly true.  Springfield is a reasonably normal small town in the American Heartland, with a normal enough distribution of conservatives, liberals and moderates.

But Springfield is ruled by Chicago, the King Kong of Illinois politics, which, for all its good points (and yes, there are many), simply can’t help being utterly destructive to everything within reach.  And because of its size, its reach is far-ranging indeed.

So, while Springfield, as the seat of Illinois government, theoretically rules Illinois, Chicago’s powerful and virtually unanimous Democratic legislative delegation rules Springfield.

And the more desperate Chicago gets, confronted with fleeing residents, disappearing employers, and an increasingly impatient and demanding grubber list, the more Chicago acts like King Kong in the movies, smashing everything in sight, a danger to friends and enemies alike.

Di Leo: Money is Fungible ... Especially in Cuba

By John F. Di Leo -

Reflections on the Trump Administration's changes to our Cuba policy

In 1959, following six years of organized Marxist-Leninist rebellion, mostly run by Fidel and Raul Castro and their partner Che Guevera, the Battista government of Cuba was overthrown and Fidel Castro claimed dictatorial powers, which he eventually turned over to his brother Raul, in 2008.

The Castros spent their sixty years not only oppressing their people – robbing, raping, beating, imprisoning, torturing, and killing, as all communist governments do – but they also spent those years, particularly the years before the collapse of the Soviet Union, spreading violent revolution across the third world.  They spent thirty years as the might, partnered with the Kremlin’s money, leading revolutions in Africa, Central and South America, and Asia.

In all those years, many other formerly communist governments have changed people and philosophies. The Soviet Union broke up, and many of its former vassal states have embraced free markets and free people.  Several others outside the Former Soviet Union have as well… but Cuba never did.  Cuba is still run by Raul Castro, the mass murdering enforcer of the 26th of July Movement of the 1950s. 

Di Leo: A Look at President Trump and the State of the Nation, on his Birthday

By John F. Di Leo -

President Donald J. Trump was born on June 14, 1946, a day also celebrated as the birthday of the Continental Army (1775) and the United States Flag (1777).  It’s a good day to be a patriot.

At this writing, as he celebrates his 71^st birthday, Donald Trump has been in office for less than five months.  If the 100-day mark in a presidency is too early to judge a presidency, then so is this, so we mustn’t try.  There is still room for almost all possible outcomes at the end of his four years (or  eight).

It is, however, a reasonable time for some analysis of where we stand so far in this presidency, what the lessons of 2016 are, and what should brace ourselves for in the years to come. 

Thorner: Radical environmentalists blame Heartland Institute for Trump's Paris accord decision

By Nancy Thorner - 

In announcing his decision in the Rose Garden on June 1st to end the United States' affiliation with the Paris climate agreement, President Trump said:  

The Paris climate accord is simply the latest example of Washington entering into an agreement that disadvantages the United States to the exclusive benefit of other countries, leaving American workers…and taxpayers to absorb the cost in terms of lost jobs, lower wages, shuttered factories, and vastly diminished economic production.

Di Leo: A City of Casualties – The Results of Rampant Crime

At the corner of West Madison and North Cicero Avenue

By John F. Di Leo - 

In just the first five months of 2017, there were over 233 murders, and well over 1300 more victims of shootings who survived… in the city of Chicago alone.  And almost every day, we see some alderman, mayor or police chief proudly saying that things are getting better – this statistic or that one is improving, so even though we need to get better, we should be happy that our “smart policing” is succeeding so well.

And yes, this is in a city of two and a half million people, in which the spokesmen know these statistics, so they know the city’s on track for over 3000 wounded or killed this year (and remember, not all the woundings get reported).

When there’s a terrorist attack overseas, we hear people like London Mayor Sadiq Khan saying that such dangers are now “part and parcel of living in a world class city,” and our politicians rightly ridicule such an apparently casual acceptance of such risks.  But here in the states, we have politicians implying the same about non-terrorist violence – about the gang shootings, domestic abuse, robbery violence and such that makes up the bulk of these 3000 annual victims in Chicago alone.

More bad news: Illinoisans' income growth in last 10 years is low, very low

By Michael Lucci - 

Illinois is home to the worst personal income growth in the United States over the Great Recession era, and tax hike proposals in the Illinois General Assembly would only make this worse.