Is moving back the federal and state tax-filing deadlines of real benefit?
Politicians are famous for mixing apples and oranges when they confront challenging issues, so why should it be any different in the case of the coronavirus pandemic?
That appears to be why federal officials — along with officials in some states — have embraced the idea of moving the income-tax filing deadline from April 15 to July 15.
U.S. Treasury Secretary Steven Mnuchin announced last week the new deadline for filing federal income taxes, attributing the change in date to the confusion or stress caused by the coronavirus.
That prompted a call from powerful voices urging Gov. J.B. Pritzker to do the same thing here, a request that Pritzker has found to be underwhelming.
There’s one big reason to embrace the delay. Far too many people are taking a hit to their income as a consequence of the economic freeze caused by the shutdown of business here in Illinois and elsewhere.
That includes employers and employees alike. Everyone’s situation is different, but a decline in income not only makes it hard to pay the bills but also equally hard to pay whatever taxes are owed for the 2019 tax year.
Of course, it’s a different story for those expecting refunds from the federal and state governments. They have a real incentive to get their tax returns in so the federal and state tax authorities can get the refunds back out.
Ability to pay is a potentially big issue. But aside from that, it’s difficult to see what the coronavirus has to do with the April 15 tax deadline day.
People should have their records collected. Further, with most people on lockdown, they have the time to complete whatever tax work remains to be done. In fact, millions of people have already filed their returns.
That’s why moving the filing deadline to July 15 doesn’t elicit much excitement. If it helps some people, fine. But it’s not a big deal by any stretch. Unless, of course, you’re the revenue-hungry governor of Illinois.
Pritzker said over the weekend that he’s “working hard” to figure out how to move the deadline. But he exaggerates, because it’s not that hard to do. What he’s really concerned about is the financial fallout of moving the deadline back.
Many people wait until the last minute to file because they owe money to either the feds, the state or both.
Pritzker desperately wants the money that people owe to fund state government, and that makes perfect sense.
Illinois is effectively bankrupt, its government held together by chewing gum and baling wire. Any interruption in cash flow — like a three-month delay on an important cash infusion — could be both devastating and terribly revealing about the financially decrepit state of our state.
As governor, Pritzker has demonstrated time and again that he wants to raise the taxes people pay to fund his programs. At the same time, he’s heaped scorn on those financial analysts who have warned that Illinois is a financial basket case.
That’s why embracing the double-whammy of delaying needed income while increasing the stress on an already-overstressed state government understandably has zero appeal to the governor.
His potential problem is that it might be so appealing to the public that Pritzker will feel compelled to do what he obviously has no interest in doing.