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* From Chris Kennedy’s appearance on Rick Pearson’s WGN Radio show yesterday…
When we look at revenue options, let’s look at the tax cheats that are operating in Illinois. Let’s look at the people who say they live in another state and continue to have their jobs here and take income in Illnois and don’t pay income tax here.
The state of New York, the state of California started taxing those people. I talked to the fellow who helps collects those taxes in New York just last week and he said it’s billions of dollars in tax revenue that they get in New York from people who visit there and work, take meetings and work. And we should tax those people here.
If you look at Kennedy’s infrastructure plan, he says Illinois should pass a “Florida Tax to tax people who live out of state but earn income in Illinois.”
* Greg Hinz explains…
According to Taxpayers’ Federation of Illinois President Carol Portman, the current tax code is pretty good at collecting money from professional athletes when they play in town—that provision sometimes is called the “Michael Jordan” clause, after the former Bulls star—but largely lets visiting accountants, lawyers, consultants and others off the hook unless they exclusively work here or their business is based here.
“States like New York are more aggressive and tax nonresidents spending just a few workdays there,” Portman says.
In fact, some businesspeople abuse the loophole, intentionally maintaining their official residence in a low-tax state while working here most of the time, says the sponsor of the Senate bill, Chicago Democrat Kwame Raoul. Still, “This is a complicated subject. We have to do it the right way,” he says.
The Civic Federation’s Laurence Msall agrees with Portman that Illinois should consider following the lead of New York, which “taxes you on your first day of working there.” Potentially, the state could net tens of millions of dollars a year in revenue by fully collecting such a tax, he adds.
But both Msall and Portman say there would have to be either reciprocity with other states—we’ll exempt your road warriors if you exempt ours—or a provision creating an Illinois tax credit for taxes paid to other states. That would cut down on the income.
Thoughts?
…Adding… Rep. La Shawn Ford (D-Chicago) introduced a bill on this topic last May…
Amends the Illinois Income Tax Act. Provides that compensation paid to individuals whose service is performed both within and without this State, but is not otherwise treated as paid in this State under the Act, is paid in this State to the extent that compensation is paid for services performed within this State.
posted by Rich Miller
Monday, Mar 12, 18 @ 12:30 pm
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Didn’t Senator Oberweis get caught up in something similar to this?
Comment by Dome Gnome Monday, Mar 12, 18 @ 12:40 pm
Rep. Manley beat them to it - HB 5517. Florida, on the other hand, does not have an individual income tax, so I don’t know where Kennedy is getting his “Florida tax” idea.
Comment by Whatever Monday, Mar 12, 18 @ 12:41 pm
Aside from complicating taxes for any individual who travels (especially those who do not travel regularly), I wonder if Illinois would really end up as a net gain. Do we import more legal work than we export, for example?
Comment by anon Monday, Mar 12, 18 @ 12:43 pm
Ask JB about it as he and his family found an even better way to avoid paying taxes on their money. Just keep finding more ways for people to want to leave Illinois.
Comment by Stand Tall Monday, Mar 12, 18 @ 12:54 pm
Finally, a “someone else” we can all agree on.
Comment by City Zen Monday, Mar 12, 18 @ 12:58 pm
Gravely voice: “Chris Kennedy is so desperate to raise taxes that now he wants to go after you even if you move out of state. Chris Kennedy - just another big tax Democrat.”
Comment by Anon0091 Monday, Mar 12, 18 @ 1:09 pm
==Florida, on the other hand, does not have an individual income tax, so I don’t know where Kennedy is getting his “Florida tax” idea.==
It’s called a “Florida tax” for that reason. People claim to live in Florida to avoid state income taxes, when they earn their income in other states.
Comment by Anon324 Monday, Mar 12, 18 @ 1:11 pm
–Potentially, the state could net tens of millions of dollars a year in revenue by fully collecting such a tax, he adds.==
Fine. As long as everyone understands the difference between “millions” and “billions.”
I’m talking about those who think Rauner is a “fiscal conservative” for turning off lights in the mansion while he was running up $12 billion in unpaid bills.
Comment by wordslinger Monday, Mar 12, 18 @ 1:26 pm
I agree. That would make more people want to come to this state. As long as he doesn’t tax us illinoisans
Comment by Anonymous Monday, Mar 12, 18 @ 1:47 pm
worth a look. also, JB lies when he says that social security would be taxed. Not possible. not legal.
Comment by Amalia Monday, Mar 12, 18 @ 1:51 pm
People of Illinois. He doesn’t want to tax yum be happy for such a proposal
Comment by Hank Monday, Mar 12, 18 @ 2:01 pm
I mean you
Comment by Hank Monday, Mar 12, 18 @ 2:02 pm
Dear Chris,
I am not totally sold on the idea that making a persuasive case, for residents of other states who work here, to pay taxes here, starts with calling them “tax cheats”, especially when it appears it is the state who is letting it go.
Love,
Latte
Comment by Touré's Latte Monday, Mar 12, 18 @ 2:04 pm
Yeah, Kennedy is on point, not. Everyone pays the same percentage of income all other things being equal. And when he says “their fair share” just what does that mean? Illinois isn’t in trouble because it has a flat rate tax. It’s in trouble because of decades of mismanagement that has driven more business away than it has attracted. Problem is that Rauner has added to the problem. No win scenario.
Comment by NeverPoliticallyCorrect Monday, Mar 12, 18 @ 2:11 pm
Amalia Where do you get that you can’t tax SS. The feds tax most (85%?) of mine
Comment by very old soil Monday, Mar 12, 18 @ 2:22 pm
I csn see where this is going…try to tax Illi ois pensioners living out of state.
Comment by wondering Monday, Mar 12, 18 @ 2:22 pm
I can see where this is going…try to tax Illi ois pensioners living out of state.
Comment by wondering Monday, Mar 12, 18 @ 2:24 pm
==I can see where this is going…try to tax Illinois pensioners living out of state.==
Illegal. The Pension Source Tax Act of 1996 stipulates that no State may impose an income tax on any retirement income of an individual who is not a resident or domiciliary of such State.
Comment by City Zen Monday, Mar 12, 18 @ 2:26 pm
If you spend any time is the so called snow bird states- folks from NY NJ CT OH MA all will tell you their states put them thru the ringer to assure they are not evading their State tax obligation - Illinois not at all. Don’t know how much revenue is out there to collect but the Illinois Dept of Revenue is really lax policing their dual state residents
Comment by Sue Monday, Mar 12, 18 @ 2:28 pm
Can we at least tax traditional IRA contributions the same way we tax Roth? We seem to overlook that Roth contributions are included in your federal AGI and therefore taxed at the state level.
So, we already tax retirement contributions, just not retirement income. It seems only fair for traditional contributions to be taxable too. So, if we will not tax it at the time of withdrawal as income, why not at the time of contribution?
Comment by thechampaignlife Monday, Mar 12, 18 @ 2:29 pm
Typical Kennedy to pull a major proposal outta his caboose eight days before the primary, largely unvetted.
Comment by Arthur Andersen Monday, Mar 12, 18 @ 2:48 pm
Following this same logic, if you are on a “business trip” and you pass through an Illinois airport (Midway or O’hare) you are technically here for 1 day. Then would you have to file and Illinois tax return for 1/365 of the year?
Audit the Medicaid rolls. Much easier. Much more effective!
Comment by BIG R. Ph. Monday, Mar 12, 18 @ 3:23 pm
Been going after the out of state taxpayers with Illinois businesses need better laws. Lots of loop holes. But rest assured the tax auditors are looking under every rock to collect taxes due.
Comment by Hhooh Monday, Mar 12, 18 @ 4:06 pm
===If you spend any time is the so called snow bird states- folks from NY NJ CT OH MA all will tell you their states put them thru the ringer to assure they are not evading their State tax obligation - Illinois not at all. Don’t know how much revenue is out there to collect but the Illinois Dept of Revenue is really lax policing their dual state residents===
Illinois tax statutes make it easy for Illinois residents to establish a domicile in another state. The Department of Revenue can’t change the tax statutes. If you think its a problem now, imagine what would happen if Illinois changes its constitution and adopts a progressive income tax.
Comment by Anonymous Monday, Mar 12, 18 @ 5:01 pm
Great we chase the rich out of the state and keep chasing them.
Comment by 44th Monday, Mar 12, 18 @ 5:12 pm
I find it unbelievable that any of my fellow Illinoisians would do anything as low as avoiding taxes. Must be all Republicans. Progressives wouldn’t do such an immorral thing. Paying ones fair share is a civic duty. A priveledge.
Comment by blue dog dem Monday, Mar 12, 18 @ 5:40 pm