The Sentinel: Taxes

It's no joke, high taxes is the number one concern for Illinois residents

Illinois residents have the highest combined state and local tax burden in the nation, accounting for nearly 17% of their paychecks, and the second-highest property taxes in the country, according to the financial website WalletHub.

by Judith Ruiz-Branch
Illinois News Connection

CHICAGO - High taxes and a weak economy are the top concerns of Illinois residents according to a new poll, with nearly half of those surveyed saying they would leave the state if given the opportunity.

The poll, conducted for the Illinois Policy Institute, showed more than half of those surveyed rank the state's high taxes as their number one concern, with the overall economy coming in second. Half of voters surveyed said they would move out of the state, regardless of whether they can afford it.

Dylan Sharkey, assistant editor for the Illinois Policy Institute, said the group started conducting surveys to shed light on tax issues.

"It's impossible for lawmakers to deny that these are the issues that people care about," Sharkey contended. "Because when you have a survey or a statewide poll, it's hard to deny those voices."

The bottom line should be that taxes should not be a first resort. The first resort should be to do more with money they already have.

Since 2020, it is estimated Illinois has lost close to 500,000 residents. Sharkey argued the poll helps to dispel the myth people are leaving the state due to the weather. He added states of similar size and climate, such as Ohio, Pennsylvania and Michigan, are also losing residents but at a much slower rate.

"This might seem obvious to some people, but of course, high taxes are number one," Sharkey emphasized. "Part of the reason we do this polling is because there are lawmakers and groups out there who look at our state and think, 'Well, we just need more money to fix the problem.' And the reality is, if you take more money from people, they're just going to find a new home."

Sharkey added he hopes the poll will serve as guidance for Illinois lawmakers as they consider new legislation which could add to the tax burden residents already carry.

"Even if lawmakers aren't in consensus over new taxes, their constituents are," Sharkey asserted. "The bottom line should be that taxes should not be a first resort. The first resort should be to do more with money they already have."

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Refunds to New Rides: 3 essential tips for buying a good used car this spring

Photo: Leon Seibert/Unsplash

Family Features - Tax refunds have started rolling in, which means many people are looking to use this influx of cash to make purchases they’ve been putting off. According to an Oxford Economics report, the amount of money received from income tax refunds this year could be among the highest in recent years, so many people may have more money in their pockets to spend this spring.

One purchase typically rises to the top this time of year: used vehicles. The Oxford report shows used vehicles are one of the most popular purchases for Americans during tax refund time as this coincides with higher resale values of used vehicles. When making this purchase, it’s important to consider several factors to make a smart financial decision.

Make Sure the Purchase Fits Within Your Budget

Data from Kelley Blue Book and Cox Automotive suggests average used car prices are around 50% less than new vehicle prices. Trusted used car companies and dealerships often feature a wide selection of inventory, including different makes and models, so customers can select a vehicle that excites them and fits within their budget.

“While there are several considerations to keep in mind when shopping for a vehicle, consumers should never exceed their budget,” said Laura D. Adams, personal finance expert, host of the “Money Girl” podcast and a paid Enterprise Car Sales spokesperson. “A vehicle that is near new is often an excellent sweet spot for consumers looking for quality without wanting to make the leap to purchase an expensive, new vehicle.”

Searching for a vehicle with a retailer you trust can help make it easy to stay within your budget. For example, with Enterprise Car Sales, the price listed is the price you’ll pay.

Keep the Monthly Payment Low

The more you can invest in the down payment on a vehicle, the lower your monthly cost will typically be and the less interest you will typically pay over the length of the loan. This can lead to lower, more manageable monthly payments.

“In setting a budget for a quality used vehicle, it’s important to consider the initial down payment, the monthly payments, and the interest,” Adams said. “When consumers can put a little more toward the initial down payment, while staying within budget, they often thank themselves later when they have lower monthly payments and less interest accrued.”

There are many online resources that can help consumers make this calculation. For example, an auto loan calculator can show you how a down payment can affect interest charges.

Purchase a Reliable Vehicle

No matter who you buy from, ensuring you are purchasing a high-quality, reliable vehicle is of the utmost importance. Do your research before signing on the dotted line and conduct a test drive if you can.

“When conducting your search, it’s important to put companies and dealerships you trust at the top of your list,” Adams said. “Maintenance costs can sometimes creep up down the road, so it’s important to make this significant purchase from a company or dealership you trust.”

Some dealers also provide additional benefits to help protect a purchase. For example, all vehicles purchased through Enterprise Car Sales are “Enterprise Certified,” pass a rigorous inspection by ASE-certified technicians and come with a 12-month or 12,000-mile limited powertrain warranty (whichever occurs first), 12 months of roadside assistance and a 7-day or 1,000-mile (whichever occurs first) buyback policy.

With a little research and careful planning, you can find a reliable used vehicle that excites you. Visit enterprisecarsales.com for more information.

Commentary |
The path forward for real environmentalism

by Sam Holmes

Guest Commentator

As the country and world grapple with an ongoing pollution crisis and demands for cleaner energy, the discourse on combating the negative environmental consequences of human civilization almost universally revolves around renewable energy and “sustainable living.” Yet, there is one crucial tool that is almost universally overlooked in this conversation, and that is the use of nuclear energy.

Despite its clear potential andproven track record of powering the lives of millions around the world with minimal environmental damage, the use of nuclear energy remains an issue that is very divisive. It’s time for us to embrace nuclear power as a cornerstone of what real environmentalism looks like, a cornerstone that prioritizes both sustainability and human prosperity.

At its core, environmentalism is about preserving the planet for future generations, safeguarding ecosystems, and ensuring that the constant stream of human progress doesn't come at the detrimental cost of environmental destruction. Yet, the universal consensus on how we should do so seems to be entirely focused on wind, solar, bioenergy, and carbon capture. While some of those efforts can be useful in certain circumstances, they are not without severe limitations.

For example, solar and wind energy are intermittent, relying on favorable weather conditions. They require vast amounts of land to even produce the same energy output as traditional sources such as oil or natural gas. Whereas in contrast, nuclear energy offers a much more stable, reliable, and highly efficient source of energy. In fact, nuclear power plants are built to withstand severe natural disasters of all kinds. Wind and solar, on the other hand, are often damaged beyond repair by mild tropical storms or even the occasional hail event.

Nuclear materials are by far the most efficient source of energy on the planet. A single uranium fuel pellet, which is roughly the size of a fingertip, contains as much energy as 1,780 pounds of coal, according to the Nuclear Energy Institute.

This high density of energy means that nuclear plants require less resources compared to their “renewable” counterparts. In addition, nuclear power plants on average only take up a measly one third of an acre of land, while the average wind farm spans a grotesque 2-40 acres per megawatts produced. Given that a nuclear plant produces on average 1,000 megawatts, at minimum, any given wind farm would require 2,000 acres of land to compete with nuclear energy’s output, as according to the U.S Department Of Energy.

Despite these advantages, the use of nuclear energy remains mired in public skepticism, often due to safety concerns and historical accidents like Chernobyl and Fukushima. These events are undeniably tragic with lasting environmental damage, but the media and academia have disingenuously shaped public perception, making nuclear energy appear far worse than its actual track record. Nuclear energy remains among the safest forms of energy ever invented, especially when contrasted to fossil fuels, coal burning, and “renewable” energy sources. While nuclear accidents can have severe consequences, nuclear plants are among the safest and most secure facilities on the face of the planet as a result of past incidents.

As citizens who truly care about the world around us and its longevity, we must call upon our state and federal governments to directly incentivize nuclear technology through tax incentives, joint public-private projects, and academic or federal grants to ensure maximum fluidity.

In summary, the path forward for real environmentalism requires a pragmatic approach that embraces all available tools. While solar and wind energy can be useful in certain circumstances like powering a home or providing energy in remote locations, they cannot even come close to powering the American grid let alone the world for that matter. Which is why nuclear energy, with its reliability, efficiency, and minimal presence, must be recognized as a cornerstone of our future global effort to conserve our beautiful planet.

It’s time to move beyond fear and misconceptions and embrace nuclear energy as the most powerful ally in our admirable fight to safeguard our home for future generations.

About the author:
Sam Holmes is a freshman at the University of Illinois. When he is not studying, he is constantly stimulating his mind and body, whether that be from doing wordles daily or going to the gym and lifting weights. He believes mankind's greatest truth is in embracing our fragility, finding the strength to live authentically and ethically within the mystery of existence.

Many Illinois residents stand to lose Medicaid coverage under Trump administration cuts

If the federal match rate drops, Illinois would have two options: come up with more than $40 billion to cover expansion costs or drop it altogether.

prescription drugs

Photo: Freestocks.org/StockSnap

by Judith Ruiz-Branch
Illinois News Connection

CHICAGO - As Congress continues to threaten deep cuts to the Medicaid program, a new KFF report shows how some of the proposed changes could end coverage for an estimated 20 million people nationwide, more than 800,000 in Illinois. One idea targets the Medicaid expansion federal match rate. The federal government currently pays 90% of the costs for people covered under what's known as the Medicaid expansion, that extended coverage to nearly all low-income adults.

Liz Williams, senior policy analyst with KFF, explained that if the federal match rate drops, Illinois would have two options: come up with more than $40 billion to cover expansion costs or drop it altogether.

"Illinois has a law where the state is required to automatically end expansion coverage if the match rate drops, so in those trigger law states, there's 12 of them, enrollees are at greater risk of losing coverage," she explained.

Nearly 30% of Medicaid enrollees in Illinois have health-care coverage because of the Medicaid expansion and would be at risk of losing it should these changes go through.

The Medicaid expansion under the Affordable Care Act was enacted to reduce the number of uninsured people nationwide. It provided states with an increased federal match rate to help pay for their health-care costs. Williams added that if states can't afford to pick up the added costs from decreased federal support, the number of uninsured people will dramatically increase, and any gains in financial security and health outcomes associated with the expansion would be reversed.

"Medicaid is jointly funded by states and the federal government, so any restrictions in federal Medicaid spending really leaves states with tough choices about how to offset reductions," she continued.

She said states have a few options, including increasing state tax revenues, decreasing spending on non-Medicaid services such as education, or decreasing coverage for other groups. Governor J.B. Pritzker has already proposed eliminating Medicaid coverage for non-citizen adults aged 42 to 65 as a way to make up for the state's $1.7 billion-budget gap.

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Farm households will see more tax liability when Trump tax cuts expire

Photo: Steven Weeks/Unsplash

by Sky Chadde
Investigate Midwest

One of President Donald Trump’s first-term achievements was a major tax cut, which he signed into law in 2017. The Tax Cuts and Jobs Act largely benefited the wealthiest families in the U.S.

But farm households also saw their tax rates decrease.

That means many farms will see their tax liability increase when the tax cuts expire at the end of the year, according to U.S. Department of Agriculture research.

Currently, farm households have an average credit of about $3,800. Unless Congress acts, it could be about $1,300.

Congress could extend the tax cuts through legislation, and Trump has said he wants more changes to the tax code.

If the tax cuts do expire, which is scheduled for midnight on Dec. 31, 2025, farm households of varying sizes would be affected in different ways.

Child tax credit

For instance, fewer farm households would receive the Child Tax Credit. The 2017 law temporarily increased this credit and raised the income threshold for eligibility. Under the current law, about 36% of all farm households are eligible for the tax credit. When the law sunsets, about 27% of farm households will be, according to USDA research.

The tax credit amount will also decrease. Currently, farm households have an average credit of about $3,800. Unless Congress acts, it could be about $1,300.

Qualified business income deduction

Another 2017 tax cut that farmers were eligible for was the qualified business income deduction.

It is for businesses that are not organized as C-corporations, which allows owners and shareholders to separate their tax liability from that of the corporation (such as publicly traded corporations). The new deduction was intended to “provide parity with C-corporations” for farms and other businesses, according to the USDA.

Almost half of farm households receive the deduction. If the deduction is eliminated, the farms’ average tax bill would increase by 9%, or about $2,500.

Estate tax

Another part of the tax cut that could sunset is the provision related to the estate tax, which applies to the transfer of property after a relative dies. The tax only affects the wealthiest families in the U.S. and has become a persistent target of Republicans, who have labeled it the “death tax.”

Though implemented in 1916, the estate tax has “never directly affected a large percentage of farmers,” USDA researchers wrote.

USDA researchers estimate that, currently, just 0.3% of all farm households would be eligible to pay the estate tax. If this part of the 2017 tax cut expires, though, 1% of all farm households would be eligible.

This mostly affects the largest U.S. farms, which generate more than $1 million in annual gross income.

This article first appeared on Investigate Midwest and is republished here under a Creative Commons license.

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Commentary |
Trump wants to cut taxes for the rich, states can choose differently

by Eli Taylor Goss & Treasure Mackey

OtherWords

As President Trump takes office, one of his first agenda items is to slash taxes on corporations and the rich. The results will be more inequality and less revenue for the programs Americans rely on.

The good news? States can make their own tax codes more equitable. And everyday people can help.

With the help of public opinion, strategic communications, and messaging research firms, we spent over a decade talking to people in Washington to better understand their deeply held beliefs about taxes.

In our state, Washington, people voted overwhelmingly this past November to protect our state capital gains tax on the ultra-wealthy. This was a hard-fought victory by a movement of people who believe we need a better tax code.

Let’s back up.

Despite our “blue state” status, Washington’s tax code has long been one of the most inequitable in the country because it over-relies on regressive measures like sales taxes and property taxes. That forces low- and middle-income earners to pay the biggest portion of their income in taxes to fund the programs and services we all rely on.

In 2010, an initiative to enact a tax on high earners in our state failed miserably. Although many people — including lawmakers — proclaimed the death of progressive taxes in Washington, advocates came together with a long-term goal of building public support for progressive revenue.

Our organizations were two of many that did this work. From interfaith organizations to affordable housing advocates to union leaders, we created coalitions to hold lawmakers accountable to build an equitable tax system.

In addition to organizing and legislative strategies, our coalitions prioritized shifting the public narrative.

We learned that most Washingtonians felt the impacts of our upside-down tax code but didn’t realize just how much it favored the rich. And in focus groups and community meetings, we heard people vocally support taxes when they understood the services they provide.

Our state capital gains tax is an excise tax on the sale of high-end stocks and bonds. Many extremely wealthy people are able to hoard wealth from selling these stocks.

In media interviews, legislative testimonies, community events, and town halls, we showed how creating a budget that funds our communities requires the wealthy to pay what they owe. We tied taxes to critical programs and services like child care, education, parks, and safety net programs.

We also highlighted how our tax code — which was designed to favor white, land-owning men over everyone else — is harmful to communities of color and low-income people.

Buoyed by grassroots organizing and legislative efforts, national momentum for taxing the rich, and some wealthy spokespeople who said “we want to pay this,” our coalitions helped our legislature pass a capital gains tax in 2021. We also helped pass a Working Families Tax Credit that year, a cash boost for people with low incomes. Together, these policies started to holistically fix our tax code.

Our state capital gains tax is an excise tax on the sale of high-end stocks and bonds. Many extremely wealthy people are able to hoard wealth from selling these stocks.

In its first two years, our modest capital gains tax on the richest 0.2 percent of Washingtonians brought in $1.3 billion to increase access to affordable child care and support school construction projects. But as soon as it passed, a handful of uber-wealthy individuals filed a lawsuit to repeal the tax.

Ultimately, the state Supreme Court upheld it. The last test was on the ballot in November. We soundly defeated Initiative 2109, a last-ditch effort to repeal the tax. Over 64 percent of voters — including majorities in right-leaning counties — supported keeping the capital gains tax in place to fund schools and child care.

Our win — which many thought impossible a decade ago — was a bright spot nationally this fall. We still have a long way to go towards a just tax code, but it’s possible to flip the script and build public support for progressive revenue. Wherever you live, we hope your community is the next to make that happen.

Eli Taylor Goss is the executive director of the Washington State Budget and Policy Center, a research and policy organization that works to advance economic justice. Treasure Mackey is the executive director of Invest in Washington Now, an organization working to remake our tax code so it works for everyone. This op-ed was distributed by OtherWords.org.

Small business employ 44% of workers in Illinois, two laws set to expire will hurt if not renewed

by Terri Dee
Illinois News Connection

A large tax hike could appear soon, that would affect Illinois' small businesses still rebounding from the pandemic. One group hopes Congress will act before two bills expire, and the tax increase takes effect.

A small business advocacy group, The National Federation of Independent Businesses (NFIB) says one of them - the 20% Small Business Deduction Act - was created to align small business tax rates with those of larger corporate competitors.

The group's Vice President for Federal Government Relations Jeff Brabant said...

"It's difficult for small businesses to be able to compete with a lot of their larger competitors, and increasing prices isn't always a great option for them," said Brabant. "If you're an employee and you go to a small employer who may not have the money to be able to offer great benefits, versus a large employer who can offer those benefits, it's always going to put the smaller employer at a little bit of a disadvantage."

If Congress decides not to renew the 20% Small Business Deduction Act, Brabant predicted that 90% of America's businesses would face additional barriers to growth and hiring more workers.

According to the U.S. Small Business Administration's 2023 Profile report, Illinois has slightly more than 2 million small business employees - which account for 44% of the state's employees.

The other law up for review by the House is the Main Street Tax Certainty Act, which permits small businesses to deduct up to 20% of their qualified business income and make it a permanent deduction.

Brabant noted that the NFIB strongly supports both measures, which expire on December 31, 2025 - and have bipartisan support.

As the country waits to see the presidential election results, he said he believes the plight of small businesses should be the "number one issue" on Congress's mind.

"It shouldn't be a Republican or Democratic issue," said Brabant. "This should be 'small businesses are the foundation of the economy,' and I don't think anyone wants to see Main Street businesses have a tax hike."

Brabant said the organization is glad both presidential candidates have talked about small businesses, because these discussions don't always occur.

He said NFIB's focus is to educate and increase Congress' awareness, and he said he hopes they will act sooner rather than later.

Keywords: Illinois small business tax increase, 20% Small Business Deduction Act, Main Street Tax Certainty Act, Small business tax reform 2025, Impact of tax hike on small businesses

Commentary |

Our tax code reward corporate price gouging. Next year, we can change that.

by Rakeen Mabud
OtherWords.org

Rakeen Mabud

Next year, we’ll have to make one of the most important decisions about the future of our economy. Will we hand more power and wealth to big corporations and the rich — or invest in a healthy and resilient economy that works for all of us?

In 2017, Republican lawmakers passed tax loopholes and cuts that primarily benefited the wealthy and big corporations. President Trump signed these giveaways into law, spiking inequality and setting off a wave of corporate profiteering.

Next year, parts of that law will begin to expire, which gives us the opportunity to make changes.

For decades, both parties have created an economy where big corporations and the wealthy aren’t pitching in like the rest of us. We’ve been sold a bill of goods known as “trickle down” economics. Trickle down goes like this: Feed the rich the best cut of meat and maybe we’ll get a bit of gristle that falls on the floor — and we’ll thank them for it.

The rich and most profitable corporations aren’t just contributing less and less to our collective coffers. They’re using their power to enrich themselves further while more of us struggle. Senator Elizabeth Warren recently described this as a “doom loop” for our tax code: the wealthy and corporations get richer from tax giveaways and then use their wealth and power to boost their profits — and then lobby for more tax cuts.

For example, the 2017 Trump tax cuts dropped the top corporate tax rate to 21 percent from 35 percent (compared to 40 percent in 1987). Supporters argued this would lead to better wages and supercharge economic growth. Instead, economic growth continued at about the same pace as before the tax breaks. And while 90 percent of workers did not see a raise, billionaire wealth has doubled.

In the same period in which corporations have enjoyed lower taxes, they’ve also raked in record profits. As my colleagues at Groundwork Collaborative have highlighted, lowering corporate tax rates actually incentivized corporate profiteering in the wake of the pandemic, as companies that overcharged us got to keep more of their winnings.

Trickle down theory says these windfall profits and lower taxes should encourage companies to invest more in workers and innovation. But in an economy run by big corporations with enormous market share, that money ends up being funneled to shareholders instead of increasing worker wages, investing in new or more productive technologies, or holding critical inventories in case of a crisis.

If we want corporations to invest more in wages and productive investments, we should raise their taxes, since wages and research are mostly tax deductible.

In other words, corporate profiteering is not a foregone conclusion. Raising corporate taxes has the potential to boost investment, productivity, and economic growth — and get Americans some of their money back.

The Biden administration has taken critical steps to push back against failed trickle down economics and corporate profiteering. It capped the price of essential drugs like insulin, empowered regulators to go after corporations abusing their market power, and made historic investments in a green future. But more can be done by raising taxes on the largest, most profitable corporations.

Fundamentally, the coming tax debate is about who holds the reins in shaping our economy: megacorporations and their wealthy shareholders, or the everyday people who keep the economy humming. Next year is an opportunity for Congress to stand firm against the rich and powerful and build the economy that we want to see.