ILLINOIS CELLPHONE TAXES ARE HIGHEST IN NATION, AVERAGE $374 A YEAR

Brad Weisenstein

Editor

/ BUDGET + TAX

NOVEMBER 18, 2019

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Illinois cellphone taxes are highest in nation, average $374 a year

Taxes alone hike the average Illinois cellphone bill by 31%.

It might be best they can’t hear you now, because you might be saying some unkind words.

Illinois in 2019 again topped the nation for how much residents are taxed on their cellphone service, according to a new survey by the Tax Foundation. The Illinois average was $374 a year for the typical family paying $100 a month for four cellphones. The national average was $260.

Thanks to competition and more users, average cellphone bills nationwide have dropped to about $38 per line from $50 per line in 2008. But taxes have offset those gains for consumers. The Tax Foundation found the average tax burden during that time jumped to nearly 22% nationally from about 15%.

In Illinois, that burden is now 31%, which comes from five different layers of taxes:

• 7% state telecom excise tax
• 6.5% simplified municipal tax (the Tax Foundation uses the average of a state’s capital city and largest city rather than gathering tax rates from every municipality. In the case of Illinois, Springfield’s rate of 6% and Chicago’s rate of 7% are used)
• 8.59% for combined state and local wireless 911 tax
• 0.05% fee for telecommunications for persons with disabilities
• 9.05% federal universal services fund surcharge

Illinois’ average cellphone tax increased by almost $44 over the prioir year, compared with a $31 increase nationally. Illinoisans also saw a $36 bump between 2017 and 2018. Illinois’ taxes were the nation’s highest this and last year, but ranked No. 4 in 2017.

And it’s worse if you live in Chicago.

“Excessive taxes and fees, especially the very high per-line charges like those imposed in Chicago and Baltimore, impose a disproportionate burden on low-income consumers. In Chicago, taxes on a family with four lines of taxable wireless service paying $100 per month are more than $500 per year – about 43% of the bill,” the Tax Foundation wrote.

The unfair burden on low-income and young people is aggravated because they are more reliant on cellphones. The Centers for Disease Control and Prevention reports 57% of all adults live in wireless-only households, but for those living in poverty the rate is 67% and for adults younger than 35 the rate is 76%.

During former Mayor Rahm Emanuel’s administration, Chicago twice drove up phone service taxes to deal with budget deficits driven by city worker pensions. In 2014 the city hiked its 911 tax on every phone line by $1.40 to $3.90 to increase contributions to the city’s laborers pension fund. In 2018 the city hiked the 911 fee by $1.10 to $5 per line.

Mayor Lori Lightfoot is facing an $838 million shortfall in the city’s $11.65 billion budget, again driven by public pension costs. She sought state lawmakers’ help but failed to gain it during the November veto session to increase a progressive “exit tax” for those selling real estate and to get a bigger cut of any Chicago casino taxes.

Lightfoot inherited four city pensions that are $29 billion in debt and only 25% funded. Chicago residents are responsible for eight local public pension systems that total $46 billion in pension debt, with payments expected to rise by $1 billion during the next four years.

Add to that the nation’s worst statewide pension debt – pegged at $137 billion by the state’s estimates, but at $241 billion by a less-generous analysis – and the reason Illinois ranks as the “least tax-friendly” state in the nation becomes clear.

Still, Gov. J.B. Pritzker is pushing a ballot initiative to drive Illinois taxes $3.4 billion higher to pay down pension debt. Voters on Nov. 3, 2020, will be asked to scrap the Illinois Constitution’s flat state income tax protection. The change would grant state lawmakers greater power to change tax rates by income brackets, which nearly half of voters polled recently saw as a “blank check” for politicians to spend more.

In the past 30 years only Connecticut chose to implement a progressive income tax, sold as a way to relieve the middle class’s tax burden and cut property taxes. It did the opposite: middle class income taxes increased 13%, property taxes increased 35%, it cost the state jobs, increased poverty and did nothing to fix the state’s finances.

Pritzker is using the same sales pitch to sell Illinois voters on his tax hike proposal.

Illinois already tops the nation for the money it spends on pensions and set a record last year of $10 billion, which is 25% of the state’s general revenue funds. That is expected to climb to $11 billion and 27% of the budget during the current budget year.

The real solution to pensions was never increasing taxes, whether on cellphones or on income, but rather to control future growth. That requires a constitutional amendment to protect already-earned pension benefits while allowing the state to bring the growth rate of future benefit accruals in line with inflation.

Above is from:  https://www.illinoispolicy.org/illinois-cellphone-taxes-are-highest-in-nation-average-374-a-year/

End of Asylum Immigration?

POLITICS

NOVEMBER 18, 2019 / 5:35 PM / UPDATED 3 HOURS AGO

U.S. to change migration rules in a bid to send asylum seekers elsewhere

Ted Hesson

3 MIN READ

WASHINGTON (Reuters) - The Trump administration is set to harden the rules this week on those allowed to seek asylum in the United States, as it attempts to stem a wave of migration on its southern border with Mexico.

In a fast-track regulation set to publish in the Federal Register on Tuesday, the administration has created a framework that will allow asylum seekers to be sent to other nations that have negotiated bilateral agreements to accept them.

Previously, officials in the administration of U.S. President Donald Trump have argued that migrants with a valid need for asylum should seek protection in the first ‘safe’ country where they have the chance to apply, since many migrants travel through multiple countries on their way to the U.S. border.

However, the new regulation states that asylum seekers may be sent to any other countries with which the United States has asylum agreements that permit such an action - even if they did not first transit through those nations.

The regulation is the latest action by Trump to restrict asylum access in the United States. Trump has made immigration - and curbing the number of mostly Central American migrants arriving at the border - a major theme in his reelection campaign.

The United States already maintains a bilateral asylum deal with Canada. Guatemala, El Salvador and Honduras have also signed such deals in recent months, but the pacts have not been finalized.

The regulation released on Monday will amend U.S. guidelines to permit similar deals with other nations.

Other Trump measures have sought to restrict asylum eligibility or force migrants to wait in Mexico pending the resolution of their claims, but not force asylum seekers to pursue their claims in another country.

Migrants who may be sent to a third country under the new regulation will have an opportunity to prove that they’re “more likely than not” to be persecuted or tortured in that country, but advocates argue that will be a high hurdle.

Aaron Reichlin-Melnick, policy counsel at the pro-migrant American Immigration Council, said the regulation could reshape the U.S. asylum system.

“If this rule fully goes into effect, virtually no one who arrived at the southern border would ever be allowed to ask for asylum in the United States,” he said.

A Department of Homeland Security spokeswoman said on Saturday that implementation of the asylum agreement with Guatemala would occur soon, but did not provide a specific timeline. The department did not respond to requests for comment on Monday.

Reporting by Ted Hesson, additional reporting by Sofia Menchu in Guatemala City, Editing by Rosalba O'Brien

Above is from:  https://www.reuters.com/article/us-usa-immigration-border-asylum/u-s-to-change-migration-rules-in-a-bid-to-send-asylum-seekers-elsewhere-idUSKBN1XS2NT

Half trillion dollars if IRS increases auditors?

This former top Obama official says one silver bullet would raise $500 billion in personal-income tax

Published: Nov 18, 2019 3:37 p.m. ET

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‘Today, the IRS has fewer auditors than it had at any point since World War II’

By

ANDREWKESHNER

REPORTER

Former Treasury Secretary Lawrence Summers recommends more investment in the IRS.

It wouldn’t take much to rake in a lot of tax money, according to research published Monday by former Treasury Secretary Lawrence Summers, a high-profile economist who served in two Democratic presidential administrations.

The federal government could have $535 billion more in its coffers in the coming decade if the Internal Revenue Serviceaudited returns as often as it did back in 2011 — when audit rates were higher than they are now — and focused those audits on millionaires and billionaires, Summers said.

Under-reporting is more than five times as high for individuals who earn $10 million or more annual than it is for those who make under $200,000 a year.

High-net-worth returns may take more time to review, but they are well worth the time investment, according to the research. “Under-reporting is more than five times as high for individuals who earn $10 million or more annual than it is for those who make under $200,000 a year,” Summers wrote.

Under-reporting is when taxpayers intentionally report less income than they actually have. It’s one of the problems that leads to uncollected taxes, which is projected to cost the government about $630 billion in 2020, according to research by Summers.

In 2011, the IRS peaked with an audit rate of 1.1% for all individual returns and has since fallen to 0.5% in 2018, according to Summers, the onetime Treasury Department secretary in the Clinton administration and director of the White House National Economic Council in the Obama administration.

Returning to 2011 audit rates would mean approximately 131,000 more audits on individual tax returns, said Summers, now a professor at Harvard University, where he was once president.

Summers wrote the study with University of Pennsylvania law professor Natasha Sarin.

Others argue IRS audit policies need a hard look because they already disproportionately go after low-income taxpayers.

The IRS referred a request for comment to the Treasury Department, which did not immediately respond to a request for comment.

At a time when Democratic presidential candidates like Sen. Elizabeth Warren and Sen. Bernie Sanders are calling for new taxes on the super-rich, the paper focuses on the money that the government leaves on the table right now.

All together, the feds could take in over $1.1 trillion in tax revenue using the paper’s proposals, which include more audits on the highest end of the income ladder and other measures.

There’s a difference though between ideas on papers and politics in action — especially on Capitol Hill. After all, President Donald Trump’s impeachment inquiry is roiling an already-divided Congress. Meanwhile, a 2017 tax code overhaul passed without a single Democratic vote.

But Summers told MarketWatch his call for more audits and other reforms could be achieved.

“It’s the easiest lift to raise a trillion dollars there is, because all it requires is a change in budget score-keeping rules, which are made by political leaders,” he said. On both sides of the aisle, “almost everyone’s vision for America requires new tax revenue, whether it’s to finance tax cuts or public investments or deficits reductions.”

As for the possibility of more taxes on the wealthy, Summers said, “This may not be where the tax discussion should end, but it’s where it should begin.”

The IRS will collect an estimated $630 billion less than is due in 2020. Between 2020 and 2029, it will collect $7.5 trillion less than it’s owed, the study estimated.

The IRS will collect an estimated $630 billion less than is due in 2020. Between 2020 and 2029, it will collect $7.5 trillion less than it’s owed, the study estimated.

The paper also scrutinized the consequences of a shrinking IRS staff. The organization had 73,519 full-time equivalent positions in 2018, down 15.5% from 2013, statistics show.

“Today, the IRS has fewer auditors than it had at any point since World War II,” the researchers wrote.

More audits for the wealthy are the biggest way to address tax underpayments going forward, Summers and Sarin said. Combined with audits for filers like businesses and estates at 2011 rates, enhanced enforcements could yield $715 billion between 2020 and 2029, according to their paper.

The IRS could claw another $450 billion in that time by increasing its investment in computer analysis of tax returns and increasing certain reporting requirements, they said.

Above is from:  https://www.marketwatch.com/story/this-former-top-obama-official-says-one-silver-bullet-would-raise-500-billion-in-personal-income-tax-2019-11-18?siteid=yhoof2&yptr=yahoo