McHenry County Blog

When I posted the “David McSweeney will take away Social Security and Medicar”e post card from the Illinois Democratic Party on Dee Beaubien’s behalf, I didn’t know that two had hit the mailboxes last week.

I can’t be sure of the order, just that they both came the third week of October.

Including the two this week, I could a total of four negative Social Security mailings.

Here’s the other one. This makes four on the subject matter irrelevant to a state legislative race.

Talk about money to burn.

The back has a guy older than I with a cardboard sign saying, “Please Help.”

Maybe he’s asking people to help him move out of Illinois.

That, incidentally, was the conversation I had with a man after church today.

He had a book entitled something like “The 50 Best Small South Towns.”

He has found a couple of towns where four-bedroom homes run under $100,000.

And, where property taxes are $300-400 a year.

A second piece concerning Social Security and Medicare has been sent by the Illinois Democratic Party on behalf of Dee Beaubien (Ind.-Madigan).

Of course, state legislators have nothing whatsoever to do with either program, as Mike Madigan well knows.

But, one would imagine, his polling shows most seniors don’t know the difference between what Congressmen and state legislators do.

Here’s the address side:

Here’s the back:

The mailings from Mike Madigan’s Democratic Party of Illinois are getting stranger and stranger.

One promoted windmills that anyone with a brain knows that if proposed for her home town of Barrington Hills would cause her neighbors to go ballistic.

Today comes one promising that Dee Beaubien will protect seniors from cuts in Social Security and Medicare.

In sixteen years in the Illinois General Assembly I don’t remember one vote on either subject.

Why?

Congress controls both programs.

With Senator Dick Durbin on the airwaves saying that the U.S. House of Representatives failure to vote for a two-month extension of the Social Security tax cut, Congressman Peter Roskam is counterattacking:

Roskam: Fate of Tax Relief for 160 Million Americans is in the Senate’s Hands

WASHINGTON – Chief Deputy Majority Whip Peter Roskam (IL-06) issued the following statement today after the House voted to send the year-long payroll tax extension bill to Conference:

“The President has said it would be ‘inexcusable’ for Congress not to extend this tax holiday for an entire year.

“The good news is House Republicans agree.

“Families and small businesses need a full year of tax relief, not a 60 day band-aid that creates uncertainty.

“Even policy experts say a two-month extension is unworkable and ‘cannot be implemented properly.’

“The fate of a tax hike on 160 million Americans now rests in the hands of the Senate Democrats, and I urge them to return from vacation, appoint conferees, and ultimately work together to get a year-long agreement.”

With no other Republican candidate having raised his or her head in the newly-reconfigured 8th Congressional District now held by Joe Walsh, Crystal Laker Rich Evans has thrown his hat into the ring. What follows is his email.

NEW CANDIDATE IN NEWLY MAPPED 8TH DISTRICT AND PLAN for Social Security
Hi:
I am Rich Evans, father of large family, CPA and Risk Manager and candidate for Congress.

My goal is to win the GOP nomination in the primary and win the general election to represent the citizens of Illinois in the US House of Representatives, newly mapped Illinois 8th District.

As a resident of Villa Park for eight years, and having worked in that District for 15-20 years, I am ready to accept the challenges of voting in Congress and representing the citizens in Illinois, the 8th District.

As a CPA and a Risk Manager, I have the skill set to analyze proposed legislation and to stop reckless and wasteful spending. The math is not complicated.

Ending unwise spending and restraining the growth of the Federal government is essential.

I will run a frugal and energetic campaign and I look forward to a robust debate on the issues.

Also, I have a plan to take the pressure off Social Security disbursements during the period of many baby boomers retiring at the same time in the next few years.

This is based somewhat on a “means testing” and letting those retirees with solid pensions, voluntarily waive immediate receipt of their full social security benefits.

Someone who is retiring could elect to waive immediate receipt of their benefit. This citizen and wage earner would then receive a tax credit for three years. The amount of the credit would be calculated using discounted value of the benefits and other actuarial techniques.

The retiree would receive a tax credit for a discounted amount and a portion of their earned benefit not taken (not immediately taken or paid out).

Then, the amount not taken would be given (gifted or granted) to the grandchildren.

In other words, using generation skipping—(a standard estate planning tool) the wage earner and retiree would give the remaining calculated balance to their grandchild (or someone in the skipped generation designated by Social Security number).

Thus, patriotic and fortunate retirees who have earned and secured a private pension would give up an immediate Social Security benefit. The demands on the SS system would be smoothed out– benefits earned would be given to the skipped or third generation, so designated by specific SS number, when the designee becomes of age, i.e., 18 years old and ready for higher education or trade school.

Thus the immediate pressure on the Social Security system due to the large number of baby boomer retirees in the next 10 -15 years is reduced.

The wage earners who have earned and secured a private pension benefit, voluntarily waive immediate receipt of their social security benefit, and these fortunate and prudent tax payers are given a tax credit for three years.

The remaining balance of the benefit is “gifted” to a duly designated individual (by social security number) in the “skipped” generation— essentially the grandchildren.

Many retirees would voluntarily give earned income to their grandchildren.

This program I have described would take the pressure off the ‘bubble” of baby boomer retirees, reward those fortunate and prudent workers who are receiving an earned private pension and allow an amount to be “gifted” or granted to the grandchildren.

Like those patriotic citizen that bought the War Bonds, those solid citizens and taxpayers who would elect to sign up for this program would be doing something to save the system, would be compensated by a tax credit on their 1040 return for three years, and would still have the good will of giving a gift to the grandchildren ( or some significant other specific designee by SS # ) in the skipped generation.

Respectfully submitted by:

Rich Evans CPA
Candidate for US Congress, Illinois 8th District
815-347-6377

That’s the headline of a rant by Joe Rothstein, Editor of something called EINNEWS.com.

He uses high-profile Congressman Joe Walsh’s small victory margin in low-turnout elections to make the point that if people don’t like what D.C. politicians are saying, they should blame those who didn’t vote.

“One of the most vocal tea party-centric freshmen is Joe Walsh, who represents the eighth district of Illinois,” Rothstein writes.

“Walsh has been in the news lately for calling President Obama a liar when he says the government won’t be able to pay its bills after August 3 without a debt ceiling increase. In that, Walsh is speaking for most House GOP freshmen who are also debt-ceiling deniers.”

“Debt-ceiling denier.”

Pretty easy to figure out that Rothstein is on the side of the Big Spenders.

He argues when Walsh or pretty much any Washington politician argues he is “‘doing what the majority of those he represents’ wants him to do,” it is a pretty thin mandate, given the low turnout of voters.

Fair point, I guess.

But winners get to set political agendas.

And Walsh won.

That he is not being your timid first-term back bencher may be irritating the hell out of the Beltway crowd.

That doesn’t bother me.

There is a gentleman named Mike Laird who often comments on teacher pension issues. He got me thinking about compensation.

His basic argument is that when the majority of teachers in Illinois pay nothing or under 2% of the 9.4% required contribution to the Teachers Retirement System, that should just be considered a different form of compensation.

Last night it came to me how different it is.

My wife is in Social Security. She had to pay 6.2% until this year, when Congressional Republicans and Democrats cut that to 4.2%. Of course, with the state income tax having been increased by two percentage points, the same amount disappears to a government black hole.

My wife has something called a pension, but it is not a defined benefit plan. Her employer just puts some small percentage of her salary in a very low-paying interest bearing account.

She did, however, have a 401(k) plan in which the employer provided a match to some single digit percentage of her salary. All of that will get taxed when withdrawn by the Federal government, although, if current law continues, it will not be subject to Illinois income tax.  It was not taxed on the way in.

When her employer offered the opportunity for her to contribute to a Roth IRA-type of retirement plan, instead of a 401(k), I convinced her to switch.

For the Roth she has to pay Federal and state taxes on the way into the account.

The reward is that she won’t have to pay Federal taxes on the way out.  And, of course, the state won’t levy an income tax either.

 

Teachers do not pay into or get Social Security for their school jobs.

9.4% of their salaries go to the Teachers Retirement System.

For the minority who pay all that 9.4% themselves, the money going in is taxable.

For the majority of teachers who pay nothing themselves or very little toward that 9.4%, both the Federal and state income taxes are avoided on the way in.

Teacher pensions are subject to Federal taxes when withdrawn, but, as with all other retirement income, not subject to the Illinois state income tax.

So, is it fair for teachers not to have pay taxes on money that pays for their pension contribution?

That’s what the comment section is for.

Unless you have participated in the 401(k)-like deferred compensation program run by the Department of Central Management Services, you won’t have seen the following:

Let’s see.

Social Security tax down by two percentage points for a year.

Illinois income tax rate up by two percentage points for longer.

But the Bureau of Benefits at the Illinois Department of Central Management Services, which I used to manage, thinks that means more money in the pockets of those investing in its program.

Not for those not in the Social Security system.

And, not for those in the Social Security system.

Even assuming that the Baltimore administrator (T. Rowe Price) of the 457 Deferred Comp program used language written for another client, wouldn’t you think someone in Illinois would have caught and edited out the nonsense?

Crystal Lake State Rep. Mike Tryon sent this email blast to his list. Its topic is the state income tax, which increases family tax burdens by two-thirds, that Governor Pat Quinn just signed.

Friends,

By now I’m sure that you have heard that just hours before lame duck legislators left office in Springfield, Democrat lawmakers pushed through a historic income tax hike on Illinois working families and small businesses. House and Senate Republicans were unanimous in their opposition to the bill.

Locally, the passage of Senate Bill 2505 means that the average McHenry County household will see their income taxes raise by $1,600 annually.

I opposed this 66% income tax increase because families and businesses simply cannot pay more in taxes to bankroll years of irresponsible and unaccountable state spending.

Just weeks ago, President Obama agreed with Republicans that it is important to allow families to keep more of their money to spend as they see fit.

But here in Illinois, the controlling party disagrees.

They just canceled out the federal tax cut for families here.

The income tax increase passed the House by a vote of 60-57 and the Senate by a vote of 30-29.

The tax hike raises the personal income tax rate from 3% to 5% for a period of four years, at which time the rate would drop to 4%.

In my opinion, this so-called temporary tax increase is anything but temporary.

Illinoisans know from experience that temporary tax hikes turn into permanent ones here in Illinois.

The bill also calls for an increase in the corporate income tax rate from 7.3% to 9.5% (includes the 2.5% personal property replacement tax that all businesses pay).

The increase will significantly handicap efforts to create new jobs and spur the economy.

Illinois already ranks near the bottom in job creation and competitiveness and this tax hike just cemented Illinois’ reputation as an undesirable place to do business.

This vote could be a fatal blow to our state’s struggling economy.

Its no wonder the Governor of Indiana is salivating over this deal.

The solution to Illinois’ financial crisis must begin with significant budget cuts.

Those who voted in favor of the tax increase are touting the law’s “spending caps.” The fact remains, however, that these “caps” still allow for spending to increase each year.

Illinois families have adjusted their budgets and are getting by on less and they expect their government to do the same.

Before we ask taxpayers for more money we need to start by putting state government on a diet.

Making cuts to state government is never easy, but it must be large part of the equation.

We need a comprehensive approach that cuts spending, pays down debt, and begins to get a handle on Illinois’ biggest obligation, its five pension systems.”

As always, do not hesitate to call or email me if you have additional questions. I can be reached at (815) 459-6453 or via e-mail at mike@miketryon.com.

Best Regards,

Michael W. Tryon, State Representative, District 64

It’s not because the Democrats want to make up for the ineptitude of their last eight years in Springfield.

You might think it is because the Democrats are going to lose some votes in Springfield when the new Illinois General Assembly is sworn in on Wednesday.

But I don’t think that’s the real reason either.

Action in Washington has given Illinois Democrats a window of opportunity that is obviously too good to pass up.

Remember what happened in the tax deal that DC Republicans cut with President Barack Obama?

For the next year, the Social Security withholding tax will be cut 2 percentage points.

Notice all the emphasis on the description of the income tax hike as “two percent.”

That’s bad seventh grade math (an increase of 2.25 percentage points over three percentage points is a 75% hike), but two percentage points is exactly the amount of the Feds decrease.

So, two and a quarter percentage points up will be offset by the two percentage point cut in Social Security taxes…

For the next year.

When the increase is felt in one’s pay checks, it will be blamed on those nasty Republicans in Congress.