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In other revenue and spending developments…

Tuesday, May 20, 2014

* Tribune

Madigan filed legislation Monday that would keep the 2011 income tax hike in place and send homeowners a $500 property tax refund.

* More on the refund plan

Under the proposal, refunds could be issued for 2013 property taxes as soon as September. That’s just weeks before the November election, when Quinn and many other lawmakers face re-election.

The idea behind this isn’t difficult to discern. They want to send voters a check before the election.

* From a recent AP story

The temporary income tax hike Illinois lawmakers are considering extending is costing the typical taxpayer about $1,100 more this year, according to calculations by the Governor’s Office of Management and Budget.

he 67 percent increase on individuals approved in 2011 is producing about $6.6 billion in additional revenue for the state this year. Democrats promised when they raised the individual rate from 3 percent to 5 percent that it would roll back to 3.75 percent in January 2015. Now Gov. Pat Quinn and legislative Democrats want to make the 5 percent rate permanent.

The AP also calculated that rolling back the reduction on schedule to 3.75 percent would save the average taxpayer $688.

Instead, the state is planning to give every homeowner $500. And, by the way, those homeowners will very likely be liable for state and federal taxes on their election year bonus checks.

That’s kinda goofy, if you ask me.

How about rolling back the income tax hike by $700 million, which is the net new cost of this property tax “rebate” plan?

Sheesh.

- Posted by Rich Miller        


51 Comments
  1. - PMcP - Tuesday, May 20, 14 @ 9:35 am:

    No kidding. At least by doing that they can say they did cut taxes and the income tax hike is still ‘temporary.’ The entire thing seems poorly planned.

    The rebate check before the election makes me want to vote against anyone who supports that measure, it’s so sleazy.


  2. - wordslinger - Tuesday, May 20, 14 @ 9:39 am:

    –How about rolling back the income tax hike by $700 million, which is the net new cost of this property tax “rebate” plan?–

    Because you can’t send a check that way, lol.

    When Emanuel was chief of staff, he went apey about the federal payroll tax cut. He wanted to send everyone an annual check equal to the tax cut, but keep the rate the same.

    His argument was that there was no political benefit to a tax cut that was spread out in small portions over 26 or 24 pay periods. He wanted to do it like Bush did it and send a check.


  3. - Rod - Tuesday, May 20, 14 @ 9:47 am:

    Rich what are the numbers of the bills speaker Madigan filed. I got a message that one of these bills was HB 0395 amendment 1, actually not filed by the Speaker but by BF Currie. I am not clear what exactly that amendment is doing from looking at it, there are massive strike outs.


  4. - Cabildero - Tuesday, May 20, 14 @ 9:49 am:

    “How about rolling back the income tax hike by $700 million, which is the net new cost of this property tax “rebate” plan?”

    That makes way too much sense. And no check in the mail come October.


  5. - Jim'e' - Tuesday, May 20, 14 @ 9:49 am:

    who said government needed to be run by rocket scientists.


  6. - Downstate Illnois - Tuesday, May 20, 14 @ 9:51 am:

    I think this will backfire. The checks, the news stories, and the inevitable mailers that will follow will only remind voters of the broken promises and extra taxes Madigan and Quinn have levied on Illinois.


  7. - Arizona Bob - Tuesday, May 20, 14 @ 9:53 am:

    Apparently citizens of Illinois who are too poor to own a home are going to have their income taxes raised to subsidize homeowners.

    So much for Quinn, Madigan and the other Dems looking out for the “little guys”.

    Imagine what Quinn and Madigan, and the Illinois press, would be saying about this if the GOP proposed it!


  8. - Walker - Tuesday, May 20, 14 @ 9:53 am:

    How can the current tax rate extension “cost the typical taxpayer about $1,100 more” (Tribune), while reducing it as scheduled would “save the average taxpayer $688″ (AP)?

    Political arithmetic.

    The homeowner tax rebate idea is a red herring, and should disappear before it gets too embarrassing.


  9. - Cassandra - Tuesday, May 20, 14 @ 9:53 am:

    If voters are dumb enough to fall for it, they deserve to have their taxes raised–permanently.


  10. - Demoralized - Tuesday, May 20, 14 @ 9:55 am:

    ==How can the current tax rate extension “cost the typical taxpayer about $1,100 more” (Tribune)==

    It won’t cost anybody any more. They are already paying it.


  11. - mp - Tuesday, May 20, 14 @ 10:03 am:

    Giving the income tax refunds because of “the unfair property tax system” really annoys me because I rent. So I have to pay the additional income tax because there is some problem with property taxes, and even though I am paying for this problem I get no benefit from the solution proposed.


  12. - Rod - Tuesday, May 20, 14 @ 10:03 am:

    I was finally able to figure out the rate issue. It is bill HB 0395 amendment 1, they just strike out the sunset dates. So the idea of passing another time limited bill was dropped apparently and the leadership is going for a permanent increase that Quinn wants.

    So given the vote counts discussed for the permanent increase I have to wonder if they were much better for a temporary increase?


  13. - W.S. Walcott - Tuesday, May 20, 14 @ 10:18 am:

    I don’t think a rebate to homeowners ONLY, and and a tax “cut” to ALL taxpayers is the same thing. I could be wrong.


  14. - facts are stubborn things - Tuesday, May 20, 14 @ 10:24 am:

    Every thing MJM does is to protect the majority. How do we do something and get 60 votes so that all members can claim what they need from the vote.


  15. - Stones - Tuesday, May 20, 14 @ 10:25 am:

    What Wordslinger said.


  16. - From the 'Dale to HP - Tuesday, May 20, 14 @ 10:26 am:

    But it’s sort of misleading to think that the state has $700m laying around as it is; education once again won’t come all that close to being fully funded. Which will result in higher property taxes for a lot of people…


  17. - Jack - Tuesday, May 20, 14 @ 10:26 am:

    One home, but two incomes, so the math doesn’t really work.


  18. - Person 8 - Tuesday, May 20, 14 @ 10:27 am:

    ===How about rolling back the income tax hike by $700 million, which is the net new cost of this property tax “rebate” plan?===

    Math could be off, but that would make the new tax rate around 4.9%.
    $500 sounds much sexier than .1%


  19. - Rich Miller - Tuesday, May 20, 14 @ 10:32 am:

    ===Math could be off, but that would make the new tax rate around 4.9%.===

    I think it’s more like 4.75.


  20. - Raymond - Tuesday, May 20, 14 @ 10:33 am:

    === And, by the way, those homeowners will very likely be liable for state and federal taxes on their election year bonus checks. ===

    Excellent point. But as to the state taxes, couldn’t the GA provide by law that the $500 check is not subject to state income tax?


  21. - Wensicia - Tuesday, May 20, 14 @ 10:34 am:

    How about investing $700 million directly to the schools?


  22. - Precinct Captain - Tuesday, May 20, 14 @ 10:39 am:

    ==who said government needed to be run by rocket scientists.==

    Rocket scientists must not understand psychology.

    ==Apparently citizens of Illinois who are too poor to own a home are going to have their income taxes raised to subsidize homeowners.==

    Just like they’ve been doing for years at the state and federal level.


  23. - Rod - Tuesday, May 20, 14 @ 10:40 am:

    From the discussion so far the $500 property tax payment to all Illinois property tax payers is just a flat rebate taking into no consideration what each individual property tax payer is paying.

    So someone with a home where they are paying $2,500 a year gets a $500 rebate or a 20% break. But someone who pays $12,000 a year gets only a 4.17% break. Moreover, by handing out these $500 checks to Chicago home owners, Mayor Emanuel can effectively jack up the property tax rates to pay off the pension obligations and say well you still come out ahead because of the rebate.

    If Quinn wants to protect suburban Democrats, the $500 rebate deal doesn’t work. It works really only for low home value property tax payers.


  24. - Chris - Tuesday, May 20, 14 @ 10:40 am:

    “Math could be off, but that would make the new tax rate around 4.9%”

    Pretty sure your math is off: $700 million is 1/50th (ie 0.1%/5.0%) of $35 Billion–if the state brought in $35 Billion in *individual* income tax, there’d be no budget problem.

    $700m is almost 0.25% (rounds better to 0.2, but whatever).


  25. - A'mous - Tuesday, May 20, 14 @ 10:40 am:

    This seems as fool proof as the roll out of New Coke


  26. - Wumpus - Tuesday, May 20, 14 @ 10:43 am:

    Genius! Give them a check (refund), then tax that booch! Of course, the tax would be after elections.


  27. - DuPage - Tuesday, May 20, 14 @ 10:43 am:

    Quick question. Presently, if a retired person does not pay state income tax but does pay property tax, they do not get anything. Is this new $500 check sent to every homeowner or just ones that pay state income tax?


  28. - Chicago Cynic - Tuesday, May 20, 14 @ 10:44 am:

    Word, you’re right that Emanuel wanted to do it that way and that is how Bush did it. It’s the right way to do it for maximum political benefit but the absolutely wrong way to do it for maximum economic benefit which is what Obama chose.

    This is an abomination. Rich used to call Star Bonds the “Worst. Bill. Ever.” but we have a new champion. This idea and this legislation is truly the dumbest, most craven bill ever. Just awful public policy that the Gov and Madigan should be ashamed of even offering.


  29. - Jack Handy - Tuesday, May 20, 14 @ 10:54 am:

    ==How about rolling back the income tax hike by $700 million, which is the net new cost of this property tax “rebate” plan?==

    Because which is easier: stop the rebate or raise the income tax?


  30. - Tommydanger - Tuesday, May 20, 14 @ 10:59 am:

    If they have $500 for each property tax owner lying around, then use it to pay down the backlog of bills. If they think my property taxes are too high and therefore I need a refund, then reform the manner in which schools are funded and meet your constitutional obligations of 51%. If you want to bribe me to vote for you, I settle for a beer and a shot of common sense.


  31. - Formerly Known As... - Tuesday, May 20, 14 @ 11:01 am:

    == How about rolling back the income tax hike by $700 million, which is the net new cost of this property tax “rebate” plan? ==

    Rich Miller has now officially replaced Mike Madigan in my personal esteem as the voice of sanity in Springfield.

    Seriously.


  32. - Tasty Grouper - Tuesday, May 20, 14 @ 11:03 am:

    DuPage - Great question!! Logistically it would way, way, way easier to issue only to persons paying state income tax. The logistics of getting a check to every homeowner that doesn’t pay income tax (i.e. retirees) would be an absolute nightmare. What a stupid, stupid plan.


  33. - VanillaMan - Tuesday, May 20, 14 @ 11:03 am:

    Madigan is proposing that I get back some of my own money.

    Wow.

    I’m like so not impressed.

    Now how about just not taking so much of my money instead.


  34. - Wensicia - Tuesday, May 20, 14 @ 11:07 am:

    Quinn will do his best Joe Garagiola impersonation if this passes.

    “Own a Home, Get a Check!”

    Next up, Rauner accuses Pat Quinn of trying to buy the election.


  35. - OVERSIGHT - Tuesday, May 20, 14 @ 11:37 am:

    Maybe the once, native to Illinois Prairie Chicken, has this state figured out. It’s not a good place to live. Period


  36. - steve schnorf - Tuesday, May 20, 14 @ 11:38 am:

    I think we learn a lot by the end of the week, take the weekend off, and come back with 5 days to do the heavy lifting.


  37. - Demoralized - Tuesday, May 20, 14 @ 11:40 am:

    ==It’s not a good place to live. Period==

    I would like to know where these oh so miserable places some of you live are. I have never heard so much anti-Illinois crap like this in my life. If you are really that miserable then leave. Life is too short.


  38. - OVERSIGHT - Tuesday, May 20, 14 @ 11:45 am:

    “….So someone with a home where they are paying $2,500 a year gets a $500 rebate or a 20% break. But someone who pays $12,000 a year gets only a 4.17% break….”

    Wait a minute, that is SO not in line with the Democratic “Share the Wealth” concept!


  39. - OVERSIGHT - Tuesday, May 20, 14 @ 11:51 am:

    @ Demoralized…

    Gallup Poll Results:

    Illinois has the unfortunate distinction of being the state with the highest percentage of residents who say it is the worst possible place to live. One in four Illinois residents (25%) say the state is the worst place to live, followed by 17% each in Rhode Island and Connecticut.


  40. - A guy... - Tuesday, May 20, 14 @ 12:13 pm:

    Oy. Given his private sector vocation, it looks to me like MJM lobbied himself on this legislation.


  41. - Formerly Known As... - Tuesday, May 20, 14 @ 12:14 pm:

    == If you are really that miserable then leave. ==

    People are. More than nearly any other state. Our population growth rate and out-migration stats are frustrating.

    We also lost more people than we gained last year from every single one of our bordering states. Kentucky and others are wonderful states, but it was stunning to learn Illinois was a net loser to all of those states.


  42. - Dan from Springfield - Tuesday, May 20, 14 @ 12:15 pm:

    If they do the $500 rebate could you refuse it so you won’t get taxed on it by the state and feds? After they finish their lie and not roll back the income tax hike that would be a break even for the tax payer the way thing are right now.


  43. - Formerly Known As... - Tuesday, May 20, 14 @ 12:36 pm:

    Then we can pass a retroactive “special tax” of $500 on everyone who receives a check, and get that money back into state coffers. /s


  44. - Demoralized - Tuesday, May 20, 14 @ 1:28 pm:

    @FKA:

    They should leave if they are miserable. I don’t find Illinois to be such a bad place to leave. But then again I don’t whine 24 hours a day, 7 days a week about it like some of you do. If that were my life I would seriously consider leaving to relieve myself of the stress.


  45. - Demoralized - Tuesday, May 20, 14 @ 1:29 pm:

    That should be “bad place to LIVE.” Oy.


  46. - ND/LUC alum - Tuesday, May 20, 14 @ 2:19 pm:

    The property tax rebate guarantees $500 back to every homeowner, at a cost of 700 million.

    If you were to lower the rate by a percentage that would cost you $700 million, it would be reduced to roughly 4.5 percent, giving someone like Bruce Rauner roughly $200 K back, while someone earning $50 k/ annually would get $250 back.

    The rebate gives every homeowner $500, minus federal taxes.

    The reason the rebate makes sense is that it gives back more to the average taxpayer, and less back to the higher earners who don’t need it.

    It’s convoluted but it makes more sense than lowering the rate.

    And 93 percent of homeowners win. 7 percent lose.


  47. - Rich Miller - Tuesday, May 20, 14 @ 2:22 pm:

    ===at a cost of 700 million.===

    That’s just the net new cost. The total cost is well over a billion.


  48. - Formerly Known As... - Tuesday, May 20, 14 @ 2:23 pm:

    == I don’t find Illinois to be such a bad place to leave. ==

    Nor do I. Quite frankly, that is why I remain here and still take great pride in living here.

    Recognizing the bad as well as the good does not mean one hates the state. It simply means one understands that we are underperforming because of those great advantages we already have, and that one is willing to work on those challenges to help keep our state great.

    When your child has a broken arm, you do not focus attention on how tall and strong she is. You focus attention on the broken arm.

    And you still love her just as much as you did before she fell off the swing set.


  49. - wordslinger - Tuesday, May 20, 14 @ 2:49 pm:

    –When your child has a broken arm, you do not focus attention on how tall and strong she is. You focus attention on the broken arm.–

    LOL, okay, is that’s what’s been going on? Let’s go with that analogy.

    You also don’t run her down to the neighbors and tell her she’s not as good as the envious and jealous little girls next door, especially when she’s clearly more talented and accomplished than them, in every way.

    Not this daddio, anyway. Not in my house.

    I can get on my kids when I think they’re off track. Somebody else does, and they’re picking their chiclets off the sidewalk.


  50. - Formerly Known As... - Tuesday, May 20, 14 @ 4:50 pm:

    Word - looks like my reply is in currently moderation.

    Your extension of the analogy is completely consistent with my initial take on it.


  51. - Formerly Known As... - Tuesday, May 20, 14 @ 4:52 pm:

    Here’s a shorter version:

    Focusing strictly on the positives and ignoring the problems is just as useless as focusing on the problems and ignoring the positives.

    Both scenarios would make for one terrible daddio.


Sorry, comments for this post are now closed.


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