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Despite that momentum, major doubts remain about whether such a provision would be upheld by the IRS. Specifically, some financial experts say, establishing a system in which Illinois taxpayers would donate to a charity supporting local public schools and, in exchange, get a credit on state income taxes that would be fully deductible on their federal returns is a little too cute to make it past the tax agency.
But now, a Chicago tax law expert who has researched the issue says he's concluded conventional wisdom is wrong, and the proposed workaround "might just work."
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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