Members of the House Progressive Caucus are opposing a bill that would repeal the state’s estate tax, saying it is just a “giveaway to the wealthy few.”
Senate Bill 689, sponsored by Senate President John Cullerton, D-Chicago, is one of three bills that would only go into effect with the approval of a graduated income tax. The other bills are the rates for the graduated income tax, and a bill that would freeze school property taxes in any year the state fully funds the school aid formula, and for categorical spending on things like transportation programs.
Currently, the estate tax is applied to any estate worth over $4 million. It raises about $305 million a year in revenue.
House Progressive Caucus members said in a statement that a “$300 million tax cut to the estates of the super-rich” goes in the opposite direction of what a graduated income tax would accomplish.
“I think we just wanted to send a loud and clear message that there is not enough support to pass this measure among House Democrats,” said Rep. Will Guzzardi, a Chicago Democrat and co-chair of the House Progressive Caucus. “(Repealing the estate tax) undermines the basic premise of the fair tax, which is that our tax system ought to ask the very wealthiest to pay a little extra in order to fund the basic services that the government provides.”
Cullerton spokesman John Patterson said in a statement that the repeal is an issue the Senate president has been looking into.
“The Senate was interested in providing some added balance to the fair tax package,” he said.
During Wednesday’s debate on the estate tax repeal bill on the Senate floor, Cullerton said the estate tax is a “major issue” for wealthy people, farmers and those who have a perception that they will pay an estate tax.
“I feel that it’s irresponsible to eliminate it now, but if this constitutional amendment and the tax rates we pass were to become law, it is something which would be responsible in light of the fact that we are asking wealthier folks to pay more in taxes,” Cullerton said.
The Senate passed the estate tax repeal bill with 33 yes votes and 24 no votes.
Cullerton said if the graduated income tax constitutional amendment is passed, along with its accompanying rates, that will bring in over $3 billion to make up for the loss of estate tax revenue.
However, Guzzardi said this is not necessarily the case.
“The graduated income tax would raise tax rates on the very wealthy, and those are probably the same people who are transferring vast estates from one generation to another, but the ability to transfer massive wealth from generation to generation tax-free — it doesn’t seem like anything that the government has any business guaranteeing,” he said. “The estate tax is something that is very important. It’s an important feature of our tax policy, of making sure we fund government … equitably, and asking those who can afford to pay to pay their fair share. I don’t see any reason for us to consider repealing it.”
If enacted, Senate Bill 689 would go into effect on July 1, 2021.
Contact Cassie Buchman: firstname.lastname@example.org, twitter.com/cjbuchman.
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May 3, 2019 at 09:05PM