Chicago Tribune: Good tax reform would help all Americans

This op-ed was published on December 1, 2017. A link to the op-ed can be found here.

By Reps. Mike Quigley, Bill Foster, and Brad Schneider

While we agree that it is past time to reform our overly complex tax system, the current Republican proposals in the U.S. House and Senate fail to simplify the tax code or provide relief for hardworking families who need it most.

The Republican proposals would have noticeable adverse effects on Illinois families in particular.

The state and local tax (SALT) deduction allows filers to deduct the taxes they pay in their communities and to the state from their federal taxes. For states such as Illinois with high local taxes, this deduction is an important source of relief for taxpayers. Based on the most recent data from the Internal Revenue Service, nearly 2 million households in Illinois claim this deduction, representing 31 percent of all filers with an average deduction of $12,524 per household.

This is not a tax break for the ultra-wealthy — nearly 85 percent of those claiming the SALT deduction are middle income. These are the families we should be aiming to help with tax reform, yet the bill that passed in the House on Nov. 16 would cap the deduction at only $10,000 for property taxes, while the Senate version would eliminate it completely.

Leaders in the Republican Party have inaccurately labeled this deduction as an unfair loophole. Speaker of the House Paul Ryan called the SALT deduction an undue subsidy for "big government states." But if congressional Republicans want to debate who wins and who loses in our current tax code, we need to start with a larger conversation about which states benefit from our current federal tax allocation. Generally, taxpayers in states with larger populations, including Illinois, New York and California, contribute far more to the federal budget than those states receive in return. The SALT deduction is an important source of relief for families who do not receive a fair return on investment from their federal tax dollars.

In Illinois, the "payer state" problem results in a loss of $40 billion each year. The problem dates back to the 1930s, as senators in Southern states advocated for spending reform that would push more federal dollars into their states. As a result, smaller population states receive more in federal spending than they pay in federal taxes, aggravating underinvestment in education and transportation, which play a vital role in strengthening communities and growing local economies in small and large states alike.

While the payer-state problem is a larger issue that will require Congress to fix funding for these unfair budget formulas, taxpayers in Illinois deserve a tax plan that is equitable and supports our state's investment in programs Illinoisans rely on to support their families and achieve the American Dream.

During the recent state budget crisis in Springfield, we heard stories from across Illinois about students who were unable to pay tuition when they did not receive MAP grants, seniors who did not receive their pensions and veterans who struggled to find health care. The roads and highways that millions of us use every day to get to work are in desperate need of repair. And now, the Republican tax plan would force millions of taxpayers to pay more in federal taxes that will undoubtedly leave the state, never to return.

Comprehensive tax reform would reflect a government that represents the true interests of all hardworking Americans through investments in infrastructure, education and scientific research. Republicans must stop their attacks on blue states, scrap their unsalvageable tax bills, and work with Democrats on legislation that actually simplifies the tax code, provides relief for hardworking families, and makes sure everyone pays their fair share.

Bill Foster represents the 11th Congressional District of Illinois, Mike Quigley represents the 5th Congressional District, and Brad Schneider represents the 10th Congressional District.