Two candidates in Illinois are currently being chided by the media regarding their inability to pay taxes, and yet the conversation seems to be missing the point. State Sen. Bill Brady, Republican candidate for governor and millionaire businessman, was found not to have paid taxes in the last two years, using the tax code to avoid his monetary responsibilities legally. Using the same tax laws, Treasurer Alexi Giannoulias, Democratic candidate for U.S. Senate, was able to waive every penny of his tax liability.
Up to this point, the conversation has revolved around the idea that Gov. Pat Quinn (Brady's Democratic opponent) and Rep. Mark Kirk (Giannoulias' Republican opponent) have hit their tax-dodging opponents hard in ads and press conferences, despite the fact that while they attack their opponents, they are also attacking their partisan-colleagues. This has stumped the commentary pages of several writers, including Capitol Fax blogger Rich Miller, who only brushed over the true point of this issue in the weekend edition of the Sun Times.
"Brady's businesses had tanked with the economy, and he used various tax laws, including President Obama's stimulus program, to get a complete refund of his state and federal income taxes one year and of his federal taxes the next. Those refunds included all taxes withheld from Brady's legislative paycheck"
Note the part about the "stimulus program." I remember the battle on capitol hill when newly-inaugurated President Obama was pushing for spending programs to reignite a stalling economy.
While Republicans were vague on their solutions to the Bush recession, they were clear about one thing. Rather than spend, we need to cut taxes. Rather than block the bill, they would alter it. So Democrats compromised and put billions of dollars in tax cuts into the recovery act -- billions which are included in the price tag now berated in GOP campaign speech.
When the Republicans did offer an alternative recovery bill, its cost was only slightly cheaper than the Democrats' bill but its foundation was $430 billion in tax cuts, almost $180 billion more in tax cuts than the Democrats' bill that passed. According to CNN, that was even less than Republican leadership wanted, saying "Senate Minority Leader Mitch McConnell and other Republicans appear to want to limit the stimulus to tax cuts and addressing the housing crisis."
Tax cuts, according to supply-side Republicans, are good for the economy because they create jobs. After all, if we cut taxes for wealthy businessmen (i.e. Brady and Giannoulias) then those wealthy businessmen can create jobs. So why aren't we asking them how many jobs they've created or saved with the money from their tax-cut?
Giannoulias, as his opponent claims, is worth $7 million. His family's bank was tanking, and so he was able to avoid his taxes, yet the bank is still going out of business. So did his ability to avoid his taxes save any jobs? According to NBC Chicago, Brady was earning $500,000-a-year for several years prior to the economic downfall. In 2008 and 2009, however, he was down to $116,679 and $119,900 respectively, in annual earnings. NBC says over the recorded period of time, Brady laid off a good portion of his construction employees and more than half of the workforce in his realty business. So how many jobs did Brady create while avoiding his obligations to Uncle Sam's coffers?
This is the question that no one is asking. Why do wealthy businessmen like Brady and Giannoulias get to avoid taxes at the expense of those who can least afford to pay them? After all, Brady's real estate business most likely benefited from government spending when the same recovery act that slashed his taxes offered huge tax credits to new home buyers. And his construction company is very likely to have picked up a few contracts from schools, post offices, or other public buildings. And Giannoulias has admitted himself that his bank received aid from the FDIC.
So why don't these wealthy businessmen have to pay for their services received? Families struggling to pay bills have to make their payments to the government, and its only because they can't claim to create jobs. But apparently, neither can wealthy businessmen.
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