(The Center Square) – With less than four weeks until the election, those for and against the progressive tax amendment continue to present their case.
The amendment would scrap the state’s flat-rate income tax for a new structure allowing lawmakers to tax different levels of income at fluctuating tax rates. Gov. J.B. Pritzker said a progressive rate that taxes the wealthy more is a necessary step toward putting Illinois on firm financial footing. Whether voters agree could have profound implications for the state, which continues to have the worst credit rating of any in the U.S.
Illinois has had a flat rate, which is currently 4.95% for individuals, since the income tax was instituted in 1969. The Illinois Constitution mandates that any income tax be imposed at a single rate for all individual taxpayers, regardless of their income level. Illinois is one of eight states that has a flat rate tax.
Recently there has been a lot of talk about taxing retirement income. Kurt Thurmaier, chair of Northern Illinois University’s Department of Public Administration, says a misleading claim is that passing the amendment would allow retirement income to be taxed.
But Thurmaier said even without the amendment, lawmakers could tax retirement income with a majority vote. Critics say that’s a tougher sell though, because it would have to be a flat rate affecting all retirement income levels.
Pritzker says the tax would generate over $3 billion in new annual revenue, but Todd Maisch, president of the Illinois Chamber of Commerce, disagrees.
“You are not going to get $3.6 billion because an awful lot of folks are going to pick up and leave and take their money and their tax with them, leaving everyone else picking up the tab of the big spenders,” Maisch said.
Pritzker has given over $50 million to the group “Vote Yes for Fairness.” The opposition’s main funding source is Kenneth Griffin, who has donated over $45 million to the “Coalition to Stop the Proposed Tax Hike Amendment.”
Mark Grant, the Illinois state director of the National Federation of Independent Business, said it is going to take more than money to fool Illinoisans.
“[Pritzker] can throw as much money at this thing that he wants to,” Grant said. “If it’s a really bad idea, people aren’t going to buy it.”
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October 9, 2020 at 10:13AM