CTA Tattler

Expanding gambling is in effect a regressive tax with a lot of negative social effects. Selling the state lottery would mean the permanent loss of a public asset, essentially mortgaging the future to pay for the present - and doing so thru another regressive tax.

What we need is a major reworking of how the state pays for its needs, and we need to do it by taxing people who have money to spare rather than the poorest people in the state. Illinois has one of the country's most regressive tax structures because the constitution requires a flat income tax, and other taxes (sales tax, gas tax, etc) hit lower income people harder than well-off people.

So we should change the constitution to allow a progressive income tax - the legislature has been talking about putting an amendment on the ballot and, failing that, this year we have the opportunity to vote for a new constitutional convention that could both fix the tax code and make changes to campaign financing to address Illinois's embarrassing corruption. And we should also raise taxes on environmentally destructive behavior like driving, but couple that with lower taxes on the working people who are hit hardest by gas taxes and the like.

jake,
Probably not the place to get too deep into this, but how exactly is a flat income tax regressive? People who make more money pay more in tax, i.e. pay more because they have more to spare.

I think they should look at a combination of:

1) Vehicle registration fees <- primary source
2) Leasing assets for shorter terms (e.g. 25 year lease, not a 75- or 99-year)
3) Property tax, as infrastructure directly impacts property value and desirability.

None will happen, of course...

A big yeah! on the Washington street resumption of bus service. It was always a big hassle and mess. It would be nice if they could open the Red line washington street station before September too...

KevinB

Oh my god, Kevinb you have been quite upbeat lately. Happy Memorial Day to you!

lol...I'll try to me more dour in the future. The one thing you can count of the CTA is that it's sure to do things that will not only piss me off, but a goodly number of others :)

Besides I've been putting all my excess angst into another project that should be popping up its head soon :)

KevinB

I don't think Jake is saying that just the income tax is regressive, but the entire package of various taxes and user fees is regressive -- more regressive than most states because the income tax is not progressive as it is in many states.

His rhetoric is fine. Sounds bits and pieces from political candidates who have lofty ideals, and communicate them well at big rallies, and in the sound bites on the news, but no real plans on how to impliment those ideas. (I won't mention the name of the specific Presidential candidate who I mean, but he knows who he is.)

I suppose that first we need to get people on-board with the idea, but I'd want a little more substance than this:

>>>And we should also raise taxes on environmentally destructive behavior like driving, but couple that with lower taxes on the working people who are hit hardest by gas taxes and the like.<<<

Huh? Raise taxes on driving, but only on rich, not on poor drivers? Now THAT sounds like talking out of both sides of one's mouth. (And this is something that all the candidates do. And in the end, they fulfill neither end of the diametrically opposed pair of ideals.)

But seriously, you're not going to get any serious discussions about taxes from any politician this year -- even those not running for office.

"Expanding gambling is in effect a regressive tax with a lot of negative social effects."

In my opinion, that is an elitest and snobbish social conservative viewpoint. I think it results from a need (not saying you, neccessarally) to feel that one is superior to all the "poor folk" or "immoral people" who are gambling. It is the same attitude that caused prohibition to be enacted as well as many of the the problems of the 1960s. It is unfortunate that our country has not gotten beyond these types of perceived attitudes about other "groups". And it is a myth that most people who gamble are poor, anyway. People gamble in order to have a good time. And they do have a good time whether they win money or lose money. Those who go to casinos are very much aware, contrary to the simplistic beliefs of people who advocate against gambling, that it is far more likely that they will lose money than win any. But they still gamble, not because as some would like to believe they are not sophisticated or "cultured" enough, but rather because they enjoy the activity. There is no chance that anyone will gain any money by going to a concert or a baseball game. Yet, people still go. Why is that? It is because they enjoy it. Saying that gambling is illogical or destructive behavior is like saying the same thing about concerts or baseball games because people will pay money. I encourage you to talk to some people who go to casinos. I think you will find that they are level-headed people who enjoy doing the activity. You will be surprised that they are not likely to be desolute individuals on the fringes of society.

There is no funding mechanism that makes more sense for the state than expanding gambling. Unlike all the other options, it actually boosts the economy instead of slowing it down. It does not bring revenue from anyone who doesn't want to pay it. Hopefully, the lawmakers will reject the arguments coming from people that gambling is a bad or destructive activity.

Yeeeeech. You'd think that American society was crumbling before gambling came along and saved us. MK must work for the gaming industry. I worked a lottery machine in college and I'd suggest that MK do the same. Be there to run the numbers for poor people who play Pick 3 and 4 and then buy snacks with their LINK cards. And for the people who buy scratch-offs and hold up the line and make a big mess. And for the elderly who burn up their social security checks. They're superstitious ... they'll ask you your birthday so they can play that number. They'll buy up all the consecutive (1111) and numerically-ordered (1234) combinations so that they literally sell out. Most of them are rude. Many refuse to fill out the scan-tron cards and instead hand you a long crumpled list -- and they'll yell at you if you make one mistake. If the store you work in cashes winnings (a robbery magnet but also the way to make money since the Lottery offers incentives to pay) Don't be surprised to see the winner wad up a $500 payout and stuff it in their sock before leaving to catch the bus. State sponsored gambling is here to stay but it is a sad, corrupt, cynical and predatory enterprise and it disgusts me that it's legal in this country. To say that poor people aren't doing most of the gambling is an outright false statement, but my guess is that MK has no problem with casinos that bus in the elderly for "recreation." Policy numbers were more honest. Some people are too dumb to resist the myth of easy money. I think it's sinister that we as a society capitalize on them. Pick 3, 4, 5 and scratch-offs are the nickel slots of lotteries.

"And it is a myth that most people who gamble are poor, anyway. People gamble in order to have a good time."

That nonsequitur is just one of many places MK's rant amazes and saddens me, as it does mike. But this isn't the place for it. (And FWIW, I'm a very good poker and blackjack player. But I lead a comfortable middle-class life. The most common forms of gambling, particularly as mike points out the state lottery, are not played by CEOs and investors for a good time. The many free shuttles and buses going to the regional casinos are not filled with them, either. At least now -- to make this marginally on-topic -- seniors can ride to the dropoff points for free on the CTA.)

Flat taxes are indeed by definition regressive, but I'll leave it to the people who don't understand but are interested to use their favorite search engine.

People of all income levels gamble. The poor, the middle class, and the wealthy. Mike apparently worked in a store in a lower income area. So it stands to reason that those who would play the lottery are lower income. If you worked in a store in a rich area, like Winnetka or Highland Park, you would see mostly wealthy people play the lottery. It may be the case that lower income people are somewhat more likely to gamble. I don't know, I haven't seen the statistics. If that is true, it is most likely caused by a need for some sense of hope. Purchasing a lottery ticket or going to a casino might give some of the people Steve observed a sense of hope in their lives that was not present. If so, that is nothing to look down on. Hope is a very positive thing to have in one's life. So it is a good thing if people are just a bit more optimistic because they are thinking about the possibility of winning some money. A sense of hope might even make some people less likely engage in antisocial behaviors. If people think it is unfortunate that some individuals gamble in order to gain a sense of hope, the solution is not to take away this hope by ending the lottery or outlawing casinos. The solution is to figure out why many lower income people don't have very much hope and try to solve that.

I'm curious about KevinB's promise of "another project that should be popping up its head soon." Putting the finishing touches on that Huberman voodoo doll?

But seriously.... Let's not lose sight of the fact that when the "governor" first introduced his version of a capital bill, it included a 5:1 road infrastructure to transit funding ratio. This is incredibly short-sighted considering where fuel prices are going and the fact that CTA's current capacity cannot support the numbers of people who will have no choice but to turn to transit as gas approaches, and may soon surpass, $5/gallon. In addition, if the state doesn't get its act together and provide capital money for transit, the CTA will have to forfeit over $100 million in federal transit funding. Sad and disgusting.

Rotunda Wine & Spirits at the Rotunda in Baltimore. Now defunct, but here's a link to set'cha straight MK: http://www.grandrotunda.com/. We had a dedicated Wine Guy at the store who probably made 50K a year schmoozing and pouring. Not anywhere near the ghetto. Nice neighborhood. Shit, it's nicer now b/c Charm City like all cities gentrified. But whatever. Talk in platitudes. Our lottery customers were mostly poor. Our booze customers ran the gamut but I'd say they were predom the Belgian beer set. The owner despised the lottery but he did it and cashed up to $2,000 because he wanted to "put his kids through college." For most liquor and convenience stores, Lottery is a loss leader -- you have it there because Joe Blow will also buy some chips and a sixer of Corona b/c he's already there. Straight up: you're wrong, MK. State sponsored gambling is a way to make fast $$$ off stupid people. Compulsive gamblers account for 5% of all gamblers, but the dollars they shell out contribute 25% of gambling revenue. Like I said, fill out an app and swim in the cesspool that is the local casino. Then come back and tell us it's a wholesome activity.

Well put, mike.

As for capital funding, they should just raise the income tax. It's not as progressive as it should be, but it's more progressive than any of the other taxes. In the end, any kind of tax is paid by people. (Taxes on "corporations" are, too -- it's just harder to predict which people, exactly, ultimately bear the cost.) There are probably some socially useful taxes -- like higher taxes on gasoline or parking -- but they are politically unlikely to go anywhere at the moment.

I promise I'll stop after this and go back to bitching about the Red Line ...

MK, MK, MK: (sigh) In Winnetka (if there even *are* Lottery machines in the stores up there), as at my little liquor store in Baltimore, people who aren't poor play the Lotto ONLY when the jackpot's high. They don't play the daily (3,4,5, scratch-off) games. Seriously, our line would be poor and pathetic -- full of miserable people who'd given up -- and then the jackpot on Lotto would go over $10 million and all the sudden it would be full of the folks who'd just bought a bottle of Pinot Noir or Corsendonk, snaking down the hall and around the corner ... full of really nice and polite people who didn't know the lingo ("Hi! I would like to purchase a Lotto ticket ... here's a dollar, and miy kid's birthday is ...").

Maybe we're talking about two diff things here MK. Casinos (outside of A.C.) are different. But to champion gambling as a wholesome activity and a problem solver ... I'm sorry, I disagree. Respectfully. Seriously, work a machine ... hell, work one in the Gold Coast -- or in Kenilworth if you can find one. My favorite liquor store in Andersonville (Clark/Foster, they rock) is partially my favorite b/c the owner once told me, "lottery? Hell no, I don't want to deal with those stupid assholes." My guess is that he also doesn't want to get robbed. Anyway, it's not a platitude -- work a lottery machine. 123 boxed for a dollar. 666? Sorry, sold out. Smile at and deal with the public when they ask you what your birthday is or scream when you confuse 325 for 352. Poor people live anywhere. The only thing remarkable about my experience is that I was in a NICE neighborhood. Jesus, East B'more, S or W Chicago, Anacostia ... who knows how much is wasted there. But yeah, sure, it's free money, a voluntary activity -- just don't say it's wholesome. It's not. It's sad. Again. work that machine -- think of it as a project. I swear, your view *will* be forever changed. The first, and saddest, thing you'll realize is that you'll begin to despise the gamblers and think they're idiots. You'll turn into the person you decried in your initial post, but you will not be elitist -- you'll be human, and someone who's seen what this shit does. It is absolutely fucking awful.

I don't think I would have ever had an opinion on gambling until I spent a year rubbing up against so many people who oh-so-willingly let it -- essentially, us and the low-roaders we elect -- bleed them dry.

Any tax that leads people with lower incomes to pay a higher percentage of their earnings than higher earners is regressive. So a flat income tax is neither progressive nor regressive, but because Illinois relies to an unusual degree on regressive taxes like the sales tax, overall the Illinois tax system is regressive.

I don't have any moral opposition to gambling, and I know that people of all incomes enjoy it. But it's just a matter of fact that relying on it for tax revenues is regressive in effect. Whether gambling should be legal is a different debate - I just don't think we should use it to raise revenue in order to keep taxes on rich people low.

"Huh? Raise taxes on driving, but only on rich, not on poor drivers?"

No, what I meant was that we should raise taxes on driving for everyone, but couple that with cuts to other regressive taxes like the sales tax and to simultaneously implement a progressive income tax, so that working class people wouldn't be hit so hard.

Rich folks have seen a huge increase in income over the last 30 years while everyone else's incomes have stagnated - yet the tax burden on the rich has been steadily reduced at the same time. We desperately need to increase state revenue to invest in infrastructure and job creation, but it should be done by making the tax system fairer rather than by making it even more regressive.

"State sponsored gambling is a way to make fast $$$ off stupid people. Compulsive gamblers account for 5% of all gamblers, but the dollars they shell out contribute 25% of gambling revenue."

Well, I'm not neccessarally against making "fast $$$ off stupid people". But by your own numbers, this is not what is happening. You mention that only 5% of all gamblers are complusive or problamatic gamblers. So that means that 95% of them are not. These 95% decide to go to a casino or buy a lottery ticket because they enjoy the experience of doing so. And they have a good time even when they don't win anything. I think the false perception that some people develop comes partly from the belief that the only reason people gamble is to win money. That is why you often see these people cite the long odds and all the statistics of the fact that people are far more likely to lose money than win anything. The people making these arguments seem to think that this means there is no logical reason for people to gamble. But the reality is people gamble for many reasons including the thrill, excitement, and anticipation that comes with it. Someone purchasing a $1 lottery ticket may get as much or more enjoyment out of scratching the thing off to see if they've won anything or waiting for the numbers to be picked as they would from eating a $1 candy bar. People often enjoy actually playing the games at a casino as much or more as they would enjoy watching a concert or a sports game. In fact, it is often more expensive to do the latter things. And playing casino games is more of an active activity, which many people think is better than passive activities. So whether people actually win anything does not have anything to do with whether they are stupid. I suppose someone could make a strong argument that something should be done about the 5% (if your numbers are correct) who are problematic gamblers. But the solution is not for the state to give up a strong revenue source and to deprive the other 95% of people from doing an activity they enjoy (of course, it wouldn't exactly do that since there would be illegal casinos that get formed).

"I don't have any moral opposition to gambling, and I know that people of all incomes enjoy it. But it's just a matter of fact that relying on it for tax revenues is regressive in effect. "

Whether or not that is true, the reality is that nobody is forced to pay anything. Both gambling from casino licenses and the lottery are essentually optional taxes. I think that optional taxes are the most ideal form of revenue generators as there could possibly be. Those who cannot afford it will generally not pay them(if you believe, like I do, that humans usually behave rationally). So I think we should, if anything, be investigating other possible optional taxes.

Again, MK, work a machine. Then get back to us.

"Those who cannot afford it will generally not pay them"

Sarcasm, right? Seriously, that's hilarious. Do you live in America, MK? Let's start up a state-sponsored crack operation too. That'd generate some easy pain-free revenue. It's all about choice and personal responsibility, right? Damn the consequences when we all pay to house people in subsidized housing or incarcerate them. It's easy money up front for politicians with a very narrow view toward the horizon. Goverment should be able to hawk whaterer low-road product it wants as long as we say people can make a conscious chioce not to buy it. Great.

Martha:

Something like that. I'm working on a very snarky, onion-like website dedicated to the CTA that promises to give Ron, Blago and Da Mayor a definite case of indigestion :)

I'm hoping to get lots of stories and pictures from the riders. The other Kevin has his crazy commuting tales, I'm going for "snarky commuting tales" :)

I'm going into this hoping to be put out of business just as soon as I get that clean, reliable, on time, safe ride like my chicago card promises. Somehow, I just think that I'm probably going to be doing it till I collect social security (which is at least a couple decades away for me). If nothing else, it will sure be good for a laugh and will provide an outlet for my disappointment with the way things are at the CTA.

I'm also hoping to get some other like-minded individuals to do help with some grass-roots "madvertising", something like the creative artists did with the emergency instructions, but not in a destructive way.

I'll have to say that Kevin and the Tattler has been a great inspiration for me and therefore should be blamed almost entirely for anything that transpires

Cheers :)

KevinB

"Seriously, that's hilarious. Do you live in America, MK? Let's start up a state-sponsored crack operation too."

The difference is that people are largely motivated to buy crack because of a physical addiction to the substance, resulting from previous use. Therefore, the decision to buy crack is generally not a rational or logical one. There is no physical addiction involved in gambling. The activity does not involve any chemical substance. So the people who gamble are, at least the overwhelming majority of time, making a rational decision to do something they enjoy. You may think it is an incorrect or stupid decision from your vantage point. But many times, it is impossible to judge someone's behavior unless you completely have their perspective. Yes, some people(only 5% of gamblers, according to you) do get addicted to gambling. But this is an addiction based on pleasure rather than physical dependancy. It is not remotely comparable to crack.

>>>>
Not anywhere near the ghetto. Nice neighborhood.
...
Our lottery customers were mostly poor.
...
Our booze customers ran the gamut but I'd say they were predom the Belgian beer set.
...
The owner ... did it ... because he wanted to "put his kids through college."
...
For most liquor and convenience stores, Lottery is a loss leader -- you have it there because Joe Blow will also buy some chips and a sixer of Corona b/c he's already there.
<<<<

I'm confused. If the lottery was a loss-leader, how did it "put his kids through college"?

You're telling us that the neighborhood was nowhere near poor people, but yet you also tell us that the lottery only attracted poor people.

And you said the lottery cost the owner more than he made from it directly (that's what a loss leader is), but it brings in people who'll buy chips and cheap bear and wine. But that's not the kind of liquor store you're describing.

Things just aren't adding up here.

Are you saying that the owner of this store carried a loss leader that brought in customers who didn't live in the neighborhood, and were too poor to buy the kind of wines and imported beers the store in this upscale neighborhood specialized in?

If this was the kind of upscale neighborhood you want us to believe it is, then why would poor people travel to this store to buy their tickets? Did they not have stores in their own neighborhoods? And why, if it was a loss leader, would the owner want to attract these people to his store?

What I think the reality was is that these were people who were well-off, and could afford to live in the neighborhood, but just a bit excentric. And when you weren't watching, they were buying the nice wines and imported beers the store specialized in.

And the lottery wasn't the loss leader you thought it was. After all, it was putting the owner's kids through college.

But whatever your perspective was, the bottom line is poor people don't travel to upscale neighborhoods to buy lottery tickets. And you need to be less judgemental about people based on their appearance. Every retailer has stories about how some of their poorest looking customers are actually quite loaded, and have enriched the till at one time or another, despite the prejudises of some part-time employee who couldn't see past the dirty, non-designer clothes.

But that said, the lottery probably is more of a regressive tax than most. Not because of the demographics of those who play it. People of all classes play it. But a $1 ticket is a larger percentage of a poor person's paycheck than of a well-off person's income.

To clarify a little more, gambling is not a personality trait that has any correlation to income or social status. Certain types of gambling may be more or less popular in given social circles, but the desire to gamble is not restricted to poor people.

However, a tax on gambling, like any sales tax, is going to be regressive because poor people spend more of their income than rich people do.

It's not the number of dollars that various income levels contribute to the total tax collected that makes a tax progressive or regressive, but rather how deeply that tax cuts into one's income.

Poor people (have to) spend more of their income, thus a tax on their spending, be it sales tax on their clothes, or the state lottery's cut of the Pick 4 ticket they buy, those dollars, few as they may be, represent a larger portion of their income than someone making big-bucks.

Although the upper-middle class today may spend more and save less of their income than fourty years ago, people living from paycheck to paycheck pay a larger percentage of their income in the form of sales tax. That's what makes a tax regressive.

But can we make our tax system less regressive and more progressive? I don't think so. Why? Because today, more than ever, political campaigns need levels of financial support that can only come from the targets of a progressive tax system. Someone needs to come up with a way that fixes that inequity without violating the 1st Ammendment before we can fix our tax system... but that's a Catch-22, too, because anyone who can figure that one out won't get the financial backing to make a difference, either!

So... Do we take what we can get? Or do we wait for the revolution?

I think we can -- and need to -- put our social concious on hold, and take another regressive tax for the time being, while working overall for changes in the future, even if it could be futile.

I suppose people will also be okay with opening some state-sponsored brothels and perhaps some state-sponsored death-matches (you know, where two people can fight each other to the death to win a prize while people watch).

Don't worry, nobody will be forced to participate, so any harms that result from either activity will be the result of PERSONAL CHOICE of the participants. As we all know, that absolves society at large of any moral responsibility for the resulting harms.

This would be easy money. I can't figure out why the legislature hasn't implemented these ideas by now. People are going to have sex and are going to have fights -- why shouldn't the state at least collect some revenue in the process?

The brothels are a good idea.

I'm not so sure about the death matches. After all, the "thou shalt not kill" business is in just about every moral code, and has been incorporated into many constitutions. You know... "Life, Liberty, etc.."

On the other hand, "thou shalt not pay for sexual relations" isn't so plainly said in any moral code, and is not in any constitution that I know of. Generally it's just a statuatory thing, so we're talking about an entirely different level of morality when we're talking about paying for sex, or making murder for sport legal.

I have no problem with the idea that if you can afford to buy a Chevy Behemoth that gets 9 miles to the gallon and makes it more likely your own street is going to need repaving sooner because your car alone weighs a half a ton, you should be able to afford a city sticker that is twice as much as someone who is putting their sticker on a Prius. Same thing with your license plates, parking in city lots, etc.

Jeeze -- Leave it to Libertarian types to hijack every thread. To get back to the alleged capital proposal, I thought the gas tax is based on gallons, not dollars, so the state won't get any more bucks from $5 gas than it did from $1 gas. In fact it will get less as people buy less. Right?

So where are these "excess tax revenues from soaring gasoline prices" supposed to be materializing from?

There are a lot of various taxes rolled into that final price posted at the pump. Some are based on volume. Some are based on price. Revenue based on price are up quite a bit, while taxes based on volume are down slightly. Because the mix of taxes varries from local jurisdiction to local jurisdiction, it's hard to offer actual numbers without a lot of research, but overall, all taxes combined, the bottom line is almost certainly up.

Incidentally, with most sales of consumer goods, taxes paid by the seller are rolled into the price, but taxes paid by the buyer are broken out. (Sales tax.) Gas (along with vending machine sales) are one of the few times you'll see taxes paid by the buyer rolled into the price. (BTW, that wasn't always the case.)

"Jeeze -- Leave it to Libertarian types to hijack every thread. To get back to the alleged capital proposal"

First of all, I think you are misunderstanding what a libertarian viewpoint is. My opinion and Rusty's (who I'm pretty sure is not a libertarian) about this issue is not on that part of the ideological spectrum. A strict libertarian view of the gambling issue would be to advocate for the government to get out of the lottery business and to no longer require the regulation of casinos. People who have this view would want private companies to be allowed to establish lottery games or casinos without needing approval from the government. I would be against that largely because it would give up the lucrative state revenues that come from casino licenses and the lottery. Also, a strong argument could be made that it is a good idea for the quality of life to have casinos all over the place. So my viewpoint is not libertarian. And I believe it also is the viewpoint that the majority of people have, so your efforts to act as if it is somehow extreme by labelling people who advocate for it as "libertarian types" is futile.

I'm also a bit confused as to why you consider us discussing this as "hijacking the thread" and imply that it is off-topic. The subject of the thread is the efforts under way to get capital funding. Gambling is currently the major funding mechanism being discussed. So the people on this thread arguing the possible benefits or negative effects of gambling are very much on-topic.

Oops. I Meant to say that a strong argument could be made that it is not a good idea for the quality of life to have casinos all over the place.

Bob S,
You'll have to do that googling for me, because you really have yet to convince anyone that a flat income tax is regressive.

And a sales tax is only regressive if the marginal propensity to save decreases as income increases....which it might after a certain point, but surely doesn't through most of the lower and middle income ranges. Or put in a less-jargony way, someone who makes more than a poor person will also spend more than a poor person, and thus pay more sales tax. This is the justification for why sales tax is lower on "essential" items like groveries, which will further make up a higher percentage of a lower-income person's spending....further complicating the picture of what they actual spend as a percentage of total taxes.

And this isn't even getting into the negative-tax subsidies that many poor folk receive in the form of EITC, food stamps, housing vouchers, etc.

And gambling....well, that's totally free will if someone wants to gamble their money on the lottery, slots, tables, etc. As long as they are notified explicitly that X% of gambling winnings are used for gov't revenue, what's wrong with that?

So again, how is the tax structure "regressive"?