Vote no on proposed Illinois graduated tax amendment
One of the most difficult things government leaders can do is to win back the public’s trust. In Illinois, trust of government was lost decades ago. Since the 1970s, four governors have gone to prison for crimes occurring during or after their governorships. Promises that state lottery profits would support our schools went unfulfilled. The state now has billions of dollars’ worth of unfunded pension obligations. And thousands of residents have moved out of the state to escape growing property tax bills.
What’s to trust?
On Nov. 3, voters are being asked to “trust me” again by the state to approve a constitutional amendment that would allow for adopting a graduated tax, where income is taxed at rates that rise by income level.
The constitutional amendment request comes from Gov. JB Pritzker, a billionaire who won his first ever election two years ago campaigning in support of the graduated tax plan. The Democratic-controlled state Legislature approved the measure to seek the constitutional amendment. Pritzker made a $50-million donation to the Vote Yes for Fairness campaign to remove a requirement for a flat tax on income.
This is how the graduated tax rate would work:
The first $10,000 in income would be taxed at 4.75%. The next $90,000 would be taxed at 4.90%; and the next $150,000 would be taxed at 4.95% (the current tax rate).
Income over $250,000 would be taxed at 7.75%; then the tax rate would be 7.85% for income over $350,000 for single filers and $500,000 for couples.
Single filers would see a 7.99% tax rate for income over $750,000, or over $1 million for married couples. They would pay that rate on all of their income.
Illinois does not tax retirement benefits, and the proposed amendment would not change that.
Supporters say the amendment is an equitable way to shift the tax burden and generate more revenue for the state struggling to pay its bills. They also say it would reduce or maintain income taxes for 97% of Illinois residents. Meanwhile, income taxes on the richest 3% would raise an additional $3.6 billion annually.
Opponents claim the amendment would make it easier for the Legislature to raise taxes and lawmakers would have less accountability to citizens. They also say the rich will leave the state to escape higher taxes.
Even without the amendment, the Legislature has the power to change income tax rates. For example, in 2010, it increased the state’s tax rate to 5% from 2011 through 2014; then it was reduced to 3.75% from 2015 to June 30, 2017; then it was increased to the current 4.95% level.
Which brings us back to trust.
As opponents say, the proposed amendment does not prevent the Legislature from raising income tax rates, and, in fact, makes it easier for them to do just that. Read this from the first argument against the proposed amendment from the Illinois Secretary of State Office’s pamphlet “Explanation of Proposed Amendment” recently sent to your home:
“The Amendment gives the Legislature power to increase taxes on any group of taxpayers with no limits and no accountability and without any requirement to use the additional revenue to fund essential needs such as healthcare, education or public safety.”
Pritzker should be commended for seeking ambitious opportunities to get Illinois out of its economic mess, but as proposed, this is not the answer. Springfield lawmakers have not proven themselves trustworthy to be given such power over income tax rates without a check from citizens other than the ballot box months or years too late.
September 29, 2020
By Shaw Media Editorial Board