Lobbyists debate effects of graduated income tax plan on Illinois ballot

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Leaders from two statewide lobbying groups discussed Tuesday how the proposed constitutional amendment that would pave the way for a graduated income tax rate structure in Illinois could affect taxpayers.

Sean Denney, director of government relations at the Illinois Education Association, and Todd Maisch, CEO of the Illinois Chamber of Commerce, were the guest speakers at the online forum hosted by the GOA Regional Business Association and the Illinois Electronic Security Association, both based in Itasca.

Denney spoke in favor of the initiative, while Maisch opposes it.

The measure is on the Nov. 3 ballot and would strike language from the Illinois Constitution requiring a flat rate for the state’s income tax. Instead, legislators have already approved a graduated tax format that would apply increasing tax rates as income rises. Now, all income is taxed at a blanket 4.95% rate.

Gov. J.B. Pritzker made transitioning to a graduated income tax rate a key issue of his 2018 campaign platform. He claims the proposal will lower or hold steady the amount of income taxes owed by 97% of the state’s population while raising taxes for the state’s wealthiest residents. It is estimated to generate roughly $3.6 billion in additional income tax revenue a year.

Maisch argued that since the state already applies several tax credits and exemptions to lower-earning workers’ income that wealthier residents don’t receive, the tax rate is already graduated. He added that the state’s wealthiest 1% already pay roughly 25% of all the state’s income taxes.

Maisch claimed that without earmarking the additional revenue for specific state fiscal needs, voting in favor of the measure would open the door for potential misspending.

“This is nothing but a giant bag of cash left at the back door for the legislature to do whatever they want with,” he said. “You can have a graduated structure with a flat tax.”

But Denney argued that tying the revenue to a specific appropriation would hamstring legislators from using it to cover the greatest needs in the state, pointing to the state’s financial issues brought about by the COVID-19 pandemic. He added that a graduated income tax rate would help shift some of the burden the state’s regressive taxes and fees have on working-class families.

“When you look at the total sum of dollars and revenue that comes in from the state of Illinois, most of those dollars are coming from lower- and middle-class earners,” Denney said. “Just look at the list of millionaires and billionaires who are lining up with their checkbooks to oppose this. It’s pretty clear where their interests lie.”

If the measure passes, those whose individual or joint income exceeds $250,000 would have some of their income taxed at a rate higher than the current 4.95% flat income tax rate. Individuals who make more than $750,000, or couples filing jointly with incomes over $1 million a year, would pay a flat 7.99%.

A video of Tuesday’s discussion will be available soon on the GOA website, thegoa.com, officials said.

Feeds,News,Region: AH,City: Arlington Heights

via DailyHerald.com > Top News https://ift.tt/174gVno

October 21, 2020 at 05:55AM

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