* In its anti-tax zeal, the Tribune seems to want the federal government to tax income and property twice…
Republicans in the U.S. Senate have proposed a tax overhaul that would eliminate the itemized deduction known as SALT, for state and local taxes. The House version, which could be voted on Thursday, keeps some of the deduction in place but caps it at $10,000. Durbin describes the SALT deduction as crucial relief for middle-class families in Illinois and other states with heavy tax burdens, such as New York. “We’ve seen increases in our state income tax. We face regular increases in property taxes. This is the one deduction that gives these families a little bit of help and the Republicans are eliminating it,” Durbin said this week on the Senate floor. […]
Now we’re at the root of the dispute over the SALT deduction: Illinois politicians wouldn’t need to fight so hard to retain it if property taxes — and a 32-percent rise in the personal income tax rate (to 4.95 percent) that took effect in July — weren’t so high in the first place. So let’s credit the GOP tax reform push for forcing this issue: Why are Illinois taxes so high? How about addressing that problem instead of reaching for the deduction Band-Aid? […]
But rather than burrow into the actual problems that lead to higher state and local taxes, critics of removing or modifying the SALT deduction blame congressional reformers whose lower deductions would allow marginal tax rates to drop. That would help all Americans. As is, residents of states with lower taxes have to subsidize the high taxes collected by Illinois, by New York, by California …
We get it. Nobody wants to pay more in taxes. Deductions seem to soften the blow, even if they drive marginal tax rates higher. But if we’re truth-telling, a deduction that serves as mere salve for a government’s tax-and-spend addiction isn’t sound public policy. It’s not a solution. It’s like sticking the pacifier in the baby’s mouth to keep it quiet a little longer. Eventually, the pacifier has to go.
Illinoisans send more tax money to DC than they get back (as a state, we consistently rank near the top of this list), but the Tribune would apparently like us to send even more.
- Anonymous - Thursday, Nov 16, 17 @ 9:32 am:
Starve the beast first, middle class tax relief when we can afford it.
- BucknIrish - Thursday, Nov 16, 17 @ 9:36 am:
How about we lower our tax rates to the levels of Alabama or Mississippi, we’ll see if the Trib is happy with the services those low tax states provide.
==As is, residents of states with lower taxes have to subsidize the high taxes collected by Illinois, by New York, by California …==
Like Rich said, we then subsidize them 10 times over.
- Pundent - Thursday, Nov 16, 17 @ 9:39 am:
=But if we’re truth-telling, a deduction that serves as mere salve for a government’s tax-and-spend addiction isn’t sound public policy.=
Let’s put this “addiction” into perspective. The vast majority of our taxes fund the military, social security, and medicare. If we’re truly going to starve the beast it begins and ends here. If the Tribune editorial board believes that funding these programs is “not a solution” then they should offer up there own.
- Moody’s Blues - Thursday, Nov 16, 17 @ 9:39 am:
What’s wrong with removing deductions so tax rates can fall?
- A guy - Thursday, Nov 16, 17 @ 9:41 am:
They didn’t do an exceptional job of making a case here. But, some of the provisions in the new tax reform package may look as if they’re punishing states that have imposed already punishing tax policies. Up to $10K in property tax will solve that problem for a huge majority of people, even in this property tax crazy state, providing that number goes up in relation to inflation over the out years.
There are 7 or 8 states, including ours, that have taxing policy depending on property taxes that will not enjoy what the other 40+ states do.
- Curl of the Burl - Thursday, Nov 16, 17 @ 9:42 am:
Durbin is now worried about people paying more in taxes? Um…okay…
We have used the standardized deductions for our entire marriage and assuming that the standardized doubling holds we would make out like bandits.
- Anonymous - Thursday, Nov 16, 17 @ 9:44 am:
This is what we’re nitpicking? There’s a massive difference between the state income tax hike or the soda tax and closing federal loopholes that mostly benefit the rich. Give me a break.
- Pundent - Thursday, Nov 16, 17 @ 9:51 am:
=What’s wrong with removing deductions so tax rates can fall?=
It depends on who they’re falling for. As more details continue to emerge the evidence points to removing the tax deductions for individual tax payers so rates can fall for corporations.
- Robert the 1st - Thursday, Nov 16, 17 @ 9:52 am:
Why should Dan Proft pay a smaller Federal percent than Rick Perry? We need to all pay our fair share.
- SSL - Thursday, Nov 16, 17 @ 9:53 am:
This appears to be a typical example of partisan politics by Mr. Durbin. He was one of the proponents of raising the gasoline tax as soon as prices dropped. That is certainly something that would impact the middle class isn’t it.
As for the capping of the state and local taxes, this is long overdue. States like California, New York and good old Illinois made the rest of the nation pay more to fund the government as they increased state income taxes and property taxes. Why should other states pay a higher individual tax rate simply because these three states want to provide these great services to their residents. And by great services, I mean overly generous public pensions, because that’s what we ended up with in Illinois.
- andjusticeforall - Thursday, Nov 16, 17 @ 9:55 am:
So let’s credit the GOP tax reform push for forcing this issue: Why are Illinois taxes so high? How about addressing that problem instead of reaching for the deduction Band-Aid?. Typical of the Trib, they pose a great question, and offer no solution. Our taxes are so high because we carry far more debt, both statewide and locally, than any other state. As we cannot release ourselves of that obligation, we must pay the debt back. The only way you can pay the debt back is to raise the money necessary to make the payments. Property taxes are so high simply because there isn’t enough room left in the state budget for the state to properly fund education. Do they want to lower property taxes? Well then they should sign on to a progressive income tax, so that Illinois can afford to both properly pay its debts AND fund education.
- Lt Guv - Thursday, Nov 16, 17 @ 10:04 am:
I despise tronc.
- Honeybadger - Thursday, Nov 16, 17 @ 10:05 am:
So says the media conglomerate that raided and destroyed employee pensions. So says the media conglomerate that filed bankruptcy. Thanks Tribune, you are only worth is on the bottom of a birdcage.
- Lt Guv - Thursday, Nov 16, 17 @ 10:06 am:
Bottom line is that I’m one of those who will pay more - I don’t have kids. Hate this garbage.
- Lucky Pierre - Thursday, Nov 16, 17 @ 10:08 am:
Why is it that Illinois gets so little money back from Washington?
We rank 47th
What happened to the days of Rostenkowski and Mayor Daley the 1st when Illinois was swimming in Federal money?
We have had a Speaker of the House, President and #2 in the Senate and it still didn’t help very much..
Sadly but with resisting Trump in just about every single press release by Democrats this will probably not improve.
Perhaps Senator Durbin and the rest of our delegation from both parties could do more to bring home the bacon instead of whining about Trump.
https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/
- Robert the 1st - Thursday, Nov 16, 17 @ 10:09 am:
The federal government helps more poor people than IL does. You guys love the idea of raising taxes when the money is supposed to go to your early retirement. Not so much otherwise.
- wordslinger - Thursday, Nov 16, 17 @ 10:19 am:
I thought it was common knowledge that Illinoisans already pay way more in federal taxes than they receive back in federall government services, payroll and redistributionist policies.
Apparently, that long-running and indisputable fact has yet to penetrate the smoke from burning hair and general confusion in the trönclodytes rented ivory tower.
I can’t post links with this gadget, but a couple of minutes on the google could provide the truth that would set them free from their sad ignorance.
Illinois is consistently among the least dependent on federal dollars, bottom ten. Our go-getter neighbors in Indiana, Kentucky and Missouri are chronically among the biggest slurpers at the federales trough. They’re takers.
We’re makers, but the deep thinkers in troncslyvania want the federales to take more.
How do you like that, property tax payers?
- Anonymous - Thursday, Nov 16, 17 @ 10:25 am:
LP, feel free to provide Illinois’ ranking back in the good ol’ days of Rosty and Daley. In fact, the validity of your point is dependent upon you demonstrating that there was a vast difference between then and now.
- Rich Miller - Thursday, Nov 16, 17 @ 10:28 am:
===What happened to the days of Rostenkowski and Mayor Daley the 1st when Illinois was swimming in Federal money?===
Huh? We had basically the same ranking under Rusty. He did get us that used helicopter right before he lost, though.
- 47th Ward - Thursday, Nov 16, 17 @ 10:29 am:
There is a lot of stupid on the blog today on this topic. I think whatever it was that infected the Tribune editorial page must be spreading.
- Scott Cross for President - Thursday, Nov 16, 17 @ 10:43 am:
I miss the budget earmark.
Candidates called it “pork.”
Legislators knew it was a tool to get things done.
- Just Observing - Thursday, Nov 16, 17 @ 11:00 am:
=== States like California, New York and good old Illinois made the rest of the nation pay more to fund the government as they increased state income taxes and property taxes. ===
So, inversely, if states are able to keep SALT taxes down because, in part, they are heavy beneficiaries of federal funding subsidized by states like Illinois that are on the bottom of federal funding, you’d be a proponent of ending that shell game too?
- A guy - Thursday, Nov 16, 17 @ 11:02 am:
If the Department of Defense, or Energy don’t have outposts in your state, multiple ones in fact, you’re on the giving end, not the receiving end of federal shekels.
- Barrington - Thursday, Nov 16, 17 @ 11:04 am:
So tronc is supporting that Illinois citizens pay more federal taxes? I thought tronc had an anti-tax view. I’m confused.
- City Zen - Thursday, Nov 16, 17 @ 11:13 am:
All this talk of “makers” and “takers” at the federal level, but what about within the state. My suburb sends way more money to Springfield than comes back in services. My high property taxes are even higher because the state barely contributes anything to my school districts in order to provide more support to other school districts.
My “maker” suburb is the Illinois in Illinois. The other towns are “takers” and no different than Alabama. Same concept without the faux outrage.
- Scamp640 - Thursday, Nov 16, 17 @ 11:26 am:
@ SSL. By what standard do you say public pensions are overly generous? I also don’t think you have any clue about why the pension problem exists. It is not because of overly generous pensions. It is because the state did not pay into the pensions in the way it should have. Stop criticizing public employees, most of whom work hard, do a great job, and deserve a pension when they retire.
- wordslinger - Thursday, Nov 16, 17 @ 11:29 am:
CZ, your outrage at subsidizing Downstate does not appear to be faux. Quite the opposite, from your history of posts.
Guy, it’s way more than defense and energy. Dependent states pay far lower percentages on shared formula-driven policies like Medicaid, for example, and the federales pick up the rest.
Less wealthy, less populated states enjoy wildly disprortionate representation in the Senate, and they are experts there at skewing federal formula to their advantage. Always have been.
- Undiscovered country - Thursday, Nov 16, 17 @ 11:30 am:
Can Tronc justify the loss of SALT for individuals but not for businesses?
- cdog - Thursday, Nov 16, 17 @ 11:31 am:
I think the taxing mentality is wearing thin, here in Illinois. Glad to see it.
- City Zen - Thursday, Nov 16, 17 @ 11:45 am:
-Word - Merely applying the logic here to within our state borders for the folks concerned we subsidize other states “10 times over”. If folks are so upset at this inequity, it should be applied at all levels of government.
- Thoughts Matter - Thursday, Nov 16, 17 @ 11:53 am:
I don’t believe the tax changes as proposed are a good thing for anyone but the wealthy. I also think some of the current deductions, such as the medical expenses, should remain. However, SALT taxes have to do with state expenses. High amount or not, we shouldn’t reduce federal taxes (needed to run the country), just because it costs more to live in one state than another. We should reduce federal expenses in their own right.
Question- how are we ever going to simplify the tax code if we cant eliminate any deductions, exemptions, or credits?
- Anonymous - Thursday, Nov 16, 17 @ 11:55 am:
- If folks are so upset at this inequity, it should be applied at all levels of government. -
I’m not upset that my tax dollars go to assist net receivers of tax dollars, in the US or in Illinois. I’m upset by the net receivers that believe it flows the opposite direction.
- Sue - Thursday, Nov 16, 17 @ 11:56 am:
The Feds tax Social Security twice since the income tax doesn’t allow for a deduction on what the Feds take out for SS. The reality is that any decision on deductions is going to hurt some. Nd benefit others who may end up better with the increase in the standard deduction. In doing tax reform not everyone can benefit assuming you don’t want to bankrupt the country. Overall, the Country needs to overhaul the Code to reflect a global economy absent that companies will continue to leave for more favorable tax treatment.
- Lucky Pierre - Thursday, Nov 16, 17 @ 11:56 am:
How can anyone actually argue the fact that a 3% annual compounded COLA along with a few pensions in the 500k range are not too generous?
- ZC - Thursday, Nov 16, 17 @ 12:01 pm:
CityZen I can’t say for sure without knowing more but I’ll take a guess that your posh suburb mightily hiked all its public school officials’ paychecks at the end of their tenure , and then happily passed all the spiked pension payments , for the next couple of decades, to taxpayers in IL everywhere.
No one’s immune and we’re all in this together. The bigger issue is why do the DC Repubs think they need to hike taxes on big states to cut them for wealthy heirs and heiresses.
- Texas Red - Thursday, Nov 16, 17 @ 12:13 pm:
” we’re all in this together”
That is until you get so frustrated that you move to another sate. Illinois’ financial debacle and the onerous bill due to fix it does not follow one like a bankruptcy.
- City Zen - Thursday, Nov 16, 17 @ 12:20 pm:
ZC - It’s Posh Heights. But if you’re talking pension spikes, I 100% concur that did happen. And we forced all those other towns to pony up for those spikes. And my town also has higher teacher salaries to begin with, which also pushes more of the pension costs to other towns. Are you advocating for one salary schedule across the state based on statewide average salary? That would resolve this problem. I don’t think the teacher unions would be onboard.
I agree that we’re all in this together. I’m not sure calling out the Alabamas of the country as “takers” accomplishes that.
- Steve - Thursday, Nov 16, 17 @ 12:39 pm:
There’s a logic to the Tribune mindset: getting rid of deductions makes it way more difficult for Illinois to move towards a progressive income tax. Some wealthy Illinois Democrats may get to feel less “committed” to Mike Madigan and gang.
- kibbit - Thursday, Nov 16, 17 @ 1:14 pm:
someone could explain to the Chicago Tribune editorial board that a big part of the reason that people pay more in overall taxes in Illinois, New York, and California is because we have higher incomes.
The median family income in Illinois is $60K. In Alabama, it is $44K.
- Just Observing - Thursday, Nov 16, 17 @ 1:27 pm:
=== I’m not sure calling out the Alabamas of the country as “takers” accomplishes that. ===
People are bringing it up to provide some balance to the argument that Illinois (NJ, CA, etc.) are taker states due to the SALT deduction.
- Honeybear - Thursday, Nov 16, 17 @ 1:36 pm:
You’re right LP, they are outrageous. I have more right than most to feel rage. It is partly because of these Judges and University Hospital Dr. outrageous pensions that people like you propose cutting my poverty line tier II pension after 22 years of faithful service to the state of Illinois. Yes, that’s right. I will work 22 years in order to retire to a pension that today would be just above the poverty line. I’m sure by the time I get there it will be well below the poverty line.
But by all means let’s let the outrage of a small percentage of overcompensated Judges and Doctors outweigh the literal survival of the majority of state employees just like me.
And management wonders why everyone is leaving and no one is applying.
Counselor, our office isn’t making appointments for next week
And it’s not because of Thanksgiving or caseworkers being off for the week. It’s because we literally don’t have the people to do it. We have lost so so many.
I warned you all about collapse
Well…..its here
But just understand the consequences of your harassment of state workers.
The plan of privatizing and replacing public employees
Was based on an assumption that
Workers could be found to replace at lower cost
How’s that been workin out for you?
We
- Da Big Bad Wolf - Thursday, Nov 16, 17 @ 1:42 pm:
== Doing tax reform not everyone can benefit assuming you don’t want to bankrupt the country==
Oh I’m assuming they want to bankrupt the country alright. This tax “reform” will add 1.5 trillion to the national debt.
- Robert the 1st - Thursday, Nov 16, 17 @ 1:43 pm:
=the reason that people pay more in overall taxes in Illinois, New York, and California is because we have higher incomes.=
That’s not really how percentages work…
- Da Big Bad Wolf - Thursday, Nov 16, 17 @ 2:10 pm:
This tax bill and a hurricane wiping out Chicago and Tronc can finally be happy.
- Steve - Thursday, Nov 16, 17 @ 2:32 pm:
Senator Dick Durbin: a man who demands that Kennilworth homeowners get the right to write off 100% of their $32,000 real estate taxes!
- DuPage - Thursday, Nov 16, 17 @ 3:33 pm:
@- Lucky Pierre - Thursday, Nov 16, 17 @ 11:56 am:
===How can anyone actually argue the fact that a 3% annual compounded COLA along with a few pensions in the 500k range are not too generous?===
Most of the 500k pensions are from the top specialist medical doctors at the U of I hospitals. They pay into the retirement system at 8% of their salary, which adds up to many millions of dollars over their careers.
- Lucky Pierre - Thursday, Nov 16, 17 @ 3:42 pm:
Sorry Honeybear, I have never, ever advocated for cutting Tier 2, quite the contrary.
Your beef is not with me but with the inflexibility of your own union that will not sacrifice one inch of the overgenerous COLA for Tier 1 for the good of the Tier II people who are being terribly mistreated.
I can’t even see how Tier II will survive given the grim statistics you cite. A class action lawsuit should be filed and you should demand the Speaker and Senate President and the rest of the Democrats advocate on your behalf instead of blindly following them.
- LeadingInDecatur - Thursday, Nov 16, 17 @ 4:26 pm:
@LP and…that is the real reason TIER II was created… not to save money so much as to drive a wedge and lower ALL pensions.
“I see what you did there”–Karma
- City Zen - Thursday, Nov 16, 17 @ 4:41 pm:
@DuPage - Those large doctor pensions are even more expensive because they earn well over the social security limit. To support the pension of a doctor earning $400,000, the state’s ARC would probably be $36,000 (9%). To match that pension contribution if that doctor were instead on social security and a 401k, the state’s retirement contribution would be the equivalent of a SS max plus a 24% matching contribution to their 401k.
I wonder, if given the option, that doctor would take a match 3 times their own contribution into a private account they could walk away with at any time.
- Lucky Pierre - Thursday, Nov 16, 17 @ 4:46 pm:
Sorry but that is not the case. No union leader can survive by yielding one inch in concessions for current members including themselves.
Tier II was about pushing the obligation to the next generation, who don’t have a voice or a vote. CPS just did the same thing with the pension pickup being reduced for new hires.
That scenario is rampant in our Federal and State government and is a terrible legacy for this generation.
- City Zen - Thursday, Nov 16, 17 @ 5:16 pm:
==CPS just did the same thing with the pension pickup being reduced for new hires.==
New hires get a 7% raise instead. Rahm didn’t end the pick-up, he simply re-branded it.
- Anonymous - Thursday, Nov 16, 17 @ 5:41 pm:
I’ll take the new $24,000 standard deduction over my itemized $16,000 (mostly real estate taxes, state income tax , mortgage interest, and charitable contribution) deduction from last year’s return any day. Check your tax returns from last year. You may be better off with the new plan like me.
- Andy S. - Thursday, Nov 16, 17 @ 7:26 pm:
Anonymous, do you realize that the personal exemption is being combined into the standard deduction under both the house and senate plans? If you took $16,000 in itemized deductions and $8,300 in personal exemptions for you and your spouse, the total reduction of your AGI to calculate your taxable income will be roughly the same as under current law. Your total tax paid may or may not be less, depending on the new tax rates and the income ranges to which they will apply.
- Anonymous - Thursday, Nov 16, 17 @ 8:42 pm:
Andy S, No I did not realize that the personal exemption was being eleminated in the new plan and now I know after reading more details tonight. Guess this makes the changes almost a wash for me minus the changes to the tax rates. Thanks for the pointer, I’ll need to pass this along to others that I’ve discussed the now plan with.
- wordslinger - Thursday, Nov 16, 17 @ 11:45 pm:
Anon 8:42, if you can’t spot the chump the first time the deal goes round, you’re it.
The google is your friend, and the arithmetic ain’t hard. The House tax bill ain’t drain the swamp populism It’s a deficit-buster so guys like Griff can cover another marriage party at Versailles or $300M deKooning painting on the savings.
Not conservative or middle class friendly, if that’s what you’re looking for.
- the Cardinal - Friday, Nov 17, 17 @ 4:39 am:
How about the Feds cut 10% across a bunch of agencies first?…pick some of the bloated ones like DOE or EPA ….they implement regulations for the sake of regulations that we must need because the regulations say we need them. The Agency on Redundancy can over see the cuts. Oh and actually produce a web site so people can plug in thier current income vs tax situation and see how it impacts their personal bottom line.
- Demoralized - Friday, Nov 17, 17 @ 8:15 am:
I for the life of me don’t understand why my comments occassionally get held when there is absolutely nothing in them to justify it. It’s annoying.