Are You an Active Citizen?Submitted by DeFilippis Financial Group® on July 20th, 2016
I personally take my responsibility as a citizen seriously. It is my opinion that I have no right to complain if I am unwilling to do anything to help rectify the situation. Consequently, I frequently attend local government meetings to monitor their activities and make my voice heard. I also write letters and emails to my elected representatives and write letters to the editor. I utilize my knowledge in the tax and financial services fields and always cite facts, not opinion. If you have never attended a local government meeting, written to your elected officials or sent a letter to the editor, I encourage you to give it a try. In addition to being able to make your concerns known, you’ll feel better afterwards. Here is a letter I recently sent to the entire 177 member (yes, your eyes aren’t deceiving you, the number is 177) Illinois General Assembly:
An Open Letter to the Illinois General Assembly,
It is widely recognized that the State of Illinois is in dire financial shape. Recently, many proposals have surfaced with proposed solutions to Illinois’ financial problems. Some of the proposals include tax increases. Tax increases will not solve the problem. Tax increases will exacerbate the problem. Let me explain why.
I am an enrolled agent (tax expert) and financial advisor with an office in Wheaton, IL. Much of my job is spent counseling clients with regard to their retirement plans and goals. Over the last two years, more than half of the clients with whom I have met to discuss retirement plans have indicated they will be moving out of Illinois due to the high tax environment in our state. Keep in mind this is despite the fact that Illinois currently does not tax retirement income (pensions, IRAs, etc.) They are moving to states like Tennessee, Florida and Texas. It is my opinion, based on my experience with my clients, that raising taxes will result in an even larger exodus than I am currently encountering.
In my business I prepare tax returns for people all over the country. I get to see first-hand what they pay in state income tax and property taxes. It is my observation that Illinois’ property taxes are among the highest in the country and, compared to many states, significantly higher. This is validated in the Tax Foundation’s findings that Illinois has the fifth highest overall tax burden and the second-highest property taxes for owner-occupied housing in the entire country. For example, recently one of my clients informed me he is moving to Tennessee. He said that he can buy a similar house for $200,000 less, reduce his property taxes by 75%, and pay no state income tax. It is hard to argue with those numbers. As more and more baby boomers retire, this example will be multiplied many times over unless you, the politicians in Springfield, stop playing games and start working towards real solutions for solving our state’s financial problems. Tax reduction, especially property tax reduction, should be a major part of those solutions.
Anyone who thinks tax increases are the answer should consider this: if the current environment continues to inspire Illinois residents to flee the state at an ever increasing rate, you could tax the remaining state population at 100% and still not solve the problem. Clearly Illinois must put in place tax reforms that will lower the tax burden on its residents. You, our elected officials in Springfield, should be pulling out all the stops to enact policies that attract people and businesses to Illinois, not encourage them to leave. You should be providing incentives to come here, not disincentives to stay. Even people happy to pay their fair share don’t like seeing their fair share squandered. Throwing more money at systems that don’t produce what they promise only makes residents more cynical. Everyone likes to receive good value for the money they spend – including their taxes. Clearly Illinois residents are not receiving good value right now – it’s not even close. Our state is at a critical juncture. It is my hope you, our elected officials, will see the light and make tax reduction, specifically property tax reduction, the centerpiece of your plans to right our fiscal house.