Breen says tax-relief package will bring $1 billion back into Illinois
Rep. Peter Breen (R-Lombard) has put together a tax relief package of three bills that he said will give Illinoisans immediate respite.
“Everyone has been talking about growing Illinois, and the way to do that is to bring more investment and money back in,” Breen said at an impromptu press conference Tuesday with Rep. Keith Wheeler (R-Oswego) to introduce the legislation.
Breen said the the first bill, which was presented to him by several tax law professors, is one that has been repeatedly held up in the tax courts and is used across the country. By authorizing tax credits to individuals who donate to public school foundations, the first bill in the three part package could help bring a minimum of $1 billion back into the state and offset the $10,000 cap on state and local tax deductions now required in the newly imposed federal government's Tax Cuts and Jobs Act of 2017.
“The primary bill is one that expands our Invest in Kids tax credit,” Breen said, noting the particular credit model is the alternate plan of government setting up foundations within themselves that often succumb to Internal Revenue Service scrutiny.
“We think we have built a better mouse trap here,” Breen said. “If you use a better tax credit model, it looks like that is going to be the best way for Illinoisans to obtain relief for their excess state and local income taxes above $10,000.”
The second bill in the package expands the 529 college savings program called Bright Start and will allow for more conformity in the federal plan for the use of those funds in K-12 education and disabled services.
“It’s a much better and simpler policy that changes our Illinois plan to allow for parents to have maximum flexibility,” Breen said.
The third bill, according to the Breen, is all about small business.
“The third bill will change how our unemployment insurance applies to those solo businesses,” Breen said. “Right now, even though you are an employee of a small business, you can’t very well fire yourself. You have to pay into the unemployment insurance system and be covered by that when you have no way to reap the benefits of that coverage.”
He said that until a solo business actually has more than one employee, the commerce can be exempt from unemployment insurance. Breen said his three-package proposal was not welcomed at first by more conservative think-tank representatives “because it strikes the idea against the fact that we need to be lowering our tax burden at least on the face.”
The bottom line, Breen said, is the legislators are trying to bring $1 billion back into Illinois.
“We estimate the amount of credits needed is somewhere in the $6 billion to $8 billion range, and if you multiply that by the tax rate of 22 percent in the new brackets in just that amount, you are talking about one-third of a billion dollars back in the pockets of Illinois and out of the hands of federal bureaucrats,” Breen said.
Breen said the package a self-defense measure that simply must be taken, because on the House floor Democrats will not face the reality that taxes are driving people out of the state.
“In my district people are fleeing like crazy,” Breen said of the staggering out-migration. “We need to have an honest conversation about this and we have very few honest conversations in Springfield.”