Snowstorms and Income Taxes
As my cigar dwindles down to a stub I read about a soldier who rises to lead a nation, only to find that the nation is too large, too unmanageable. He breaks the nation into smaller states and splits power with an old friend but the nation is still too unmanageable. The book I'm reading is about Diocletian and Imperial Rome however I'm facing a similar problem following last week's meetings: information overload. My first response is usually sitting and thinking about it until it makes sense, but sometimes that is just an excuse to not actually write anything about it. So here is a story from last week I found compelling.
The big news in Illinois in January, besides the snowstorm, is the huge hike in the income tax rate. Governor Quinn and the General Assembly rallied in the 13th legislative hour to craft a huge tax increase for residents and corporations.
Are you aware of how Realtors stood up for homeowners in the waning hours of session?
I was talking to Greg St. Aubin last week about his efforts to make sure homeowners weren't trampled under some of the more obscure elements of the income tax bill. St. Aubin is the chief lobbyist for the Illinois Association of REALTORS (IAR), jocund yet unassuming, he told of a "property tax relief" provision in the original bill which was anything but homeowner friendly. Currently Illinois tax law provides for homeowners a 5% tax credit for property taxes paid.
St. Aubin said, "We couldn't believe what we were seeing in this bill. So we took the proposed tax rate and ran an analysis of what this would mean to average homeowners."
"Wow, you did this in a couple of hours?" I asked
"Yup, we are one of only a couple of groups who can perform an analysis like this in just a few hours. By Tuesday morning we were back in the Capitol letting the State Reps know what we found out."
"and that is?"
St. Aubin then laid out that under the proposal, what had been an automatic tax credit would now be essentially an application for the credit that Illinois Revenue would process and, if the state had met its spending caps, would issue equal sized checks to those who applied for rebates by April 15. Have you ever heard of such a byzantine and convoluted proposal?
However there is another problem that St. Aubin and Realtors reminded the legislators about: under the proposal two homeowners of identical homes but in different towns could pay very different taxes but get the same rebate amount. Some might say that is progressive, Realtors suggest that those paying a higher property tax should see a reasonably higher tax credit. So, let's recap, currently you can claim 5% credit right on your Illinois Income tax form. Proposed system: apply for a flat rate rebate to be issued in summer if the General Assembly tightens its belt and meets defined spending caps.
Realtors, through our state association, made sure this message was delivered to every state senator and state representative: vote no on this homeowner unfriendly tax provision. In those dwindling hours when legislature was madly attempting to pass an income tax hike, Realtors stood firmly with homeowners and tried to at least get one change to help homeowners keep their property tax rebate. Very few trade organizations can claim to have such a direct influence to assist homeowners.
Realtors, through IAR's efforts, were able to preserve some equity for homeowners. Realtors have been able to do this because of our history of providing rock solid research and analysis to elected officials. Realtors pride themselves on providing the best market data, the most thoughtful analysis, and the most thorough research to legislators, homeowners, and municipal governments of Illinois.