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Lt. Gov. Sheila Simon introduces transparency initiative for income taxes 


Daily Illini (Champaign-Urbana)
April 24, 2013
By Brittany Gibson

Lt. Gov. Sheila Simon introduced a transparency initiative on April 14 with the goal of allowing citizens to view exactly where their income tax money goes in the form of a tax receipt.

Simon is working with the Illinois Department of Revenue and the Governor’s Office of Management and Budget to design this tax receipt and make sure it’s available annually, beginning at the start of the next tax filing system in January 2014.

“The Lt. Governor has been a longtime advocate for increasing openness and transparency in government,” said Annie Thompson, Simon’s spokeswoman. “This is really to help inform people about government and give them a clearer picture of government spending.”

According to her press release, Simon wants taxpayers who file their taxes online to receive an itemized receipt that illustrates where their money goes and how it fits into the state’s multi-billion dollar budget.

“When you pay your credit card bill or when you buy groceries, you get a receipt that shows you exactly where your money went,” Thompson said. “This really seemed like a common sense thing that government could do to give taxpayers a better idea of where their money is going.”

Brian Gaines, associate professor in political science, said this idea of transparency is already present for property tax but not for income tax. He said property tax bills, sent to tax payers, have about 15 lines of different “taxing authorities,” each with a different percentage rate. This allows the consumer to view where property taxes are being used, such as what proportion goes to libraries, what proportion goes to park districts and what proportion goes to schools.

Urbana Mayor Laurel Prussing explained Urbana’s current transparency in regards to property taxes.

“Our (property) tax bills already show where the money goes by broad categories,” she said. “It’s completely public knowledge what our budgets are.”

While property taxes have always maintained a high level of transparency, Gaines said income taxes lack the same clarity because the budget they feed into is much more complicated.

“A government budget is such a complicated entity that it is extremely hard to say for any given taxpayer who has seen a fixed amount in taxes where exactly the money goes,” Gaines said. “As long as we’re spending more than we’re taking in ... then there’s a lot of discretion in describing exactly where the money goes.”

The Institute of Government and Public Affairs at the University began a project in 2008 called “The Fiscal Futures Project,” which examines this exact issue. This project, funded by a grant from the John D. and Catherine T. MacArthur Foundation, is dedicated to informing policy makers and the public about state budget transparency and long-term budget concerns.

In her press release, Simon also presented a sample tax receipt for a tax payer that pays $1,000 in income taxes to the state. The receipt listed “health and social services” and “elementary and secondary education” as the top two areas where income tax money is spent. These two areas made up nearly 66 percent of the tax payer’s entire income tax budget.

However, in spite of the sample that was released, Gaines said he still doubts the accuracy of the tax receipt.

“There isn’t a noncontroversial sample receipt that doesn’t have some kind of decisions along the way about how to describe where the money goes,” he said. “In general, transparency is a good thing, (but) the state budget is too hard to understand for most people. It’s hard to say there’s something wrong with a government initiative to try to make it clear ... but I guess I think the idea is too simple.”

Prussing said she supports transparency in tax receipts and in the government in general.

“I can say that if you can find a government that’s more open and transparent than Urbana, I would like to know about it,” she said. “I don’t know of any government that does a better job of keeping things open ... Anything you want to know is public. That’s state law.”