Governor Rauner warned against this possibility when he vetoed the tax hike in July of 2017 stating that the tax increase “does not balance the budget. It does not make nearly sufficient spending reductions, does not pay down our debt.” He went on to say that “Even with a permanent income tax increase… the budget is more than $1 billion out of balance,” which is a claim that was reviewed by Politifact and rated “Mostly True.”
In response, has the Springfield machine worked to reduce spending and provide relief to Illinois tax payers that pay the highest total tax burden in the country? Unfortunately, no.
Gubernatorial candidate, J.B. Pritzker, suggests Illinois should raise income taxes again but hasn’t offered a specific rate proposal. He argues that Illinois should scrap it’s constitutionally protected flat tax in favor of a progressive income tax. Many in the Illinois General Assembly agree, I’ll point to “The Illinois Comeback Agenda” from last year.
This package of proposals includes a progressive income tax to “tax billionaires at a higher rate than janitors.” That’s a great tagline, but dig a little and it’s clear this proposal is more pandering than policy.
One of the chief architects, Rep. Guzzardi, claims that the proposal is targeted on the top 6% of earners. But when you run the numbers, that top 6% is really only approximately 275,000 households. If you take the total state debt for unfunded pension liabilities and unfunded healthcare liabilities the total bill is approximately $180 billion. That’s approximately $653,000 per household!
And don’t forget that many of these top earners are s-corps paying taxes on a one time windfall. Maybe it’s a developer that stays lean for years until finally closing a deal of the decade or an individual that sells a family business they worked to build with little to no salary for years.
Would you stay in Illinois if you were handed a $653,000 tax bill? Many have already chosen with their feet reducing Illinois from the fifth largest state in the Union to the sixth.
Thankfully, the story is not all doom and gloom. The Illinois House and the Illinois Senate both have bills that oppose a progressive income tax and ask for spending reforms that allow us to grow. In the Illinios House, there are 50 co-sponsors for HR975 which was introduced by House Minority Leader Jim Durkin and opposes a progressive income tax. That number of co-sponsors is enough to block the supermajority that is required for a constitutional amendment and includes local Representatives Mark Batinick, Mike Fortner, Jeanne Ives, David Olsen, and Grant Wehrli.
Not to be outdone, SR1590 in the Illinois Senate has 21 co-sponsors and also opposes a progressive income tax. Local Senators Michael Connelly, John Curran, Chris Nybo, and Jim Oberweis are among the co-sponsors.
Don’t see your state legislator among the sponsors? We encourage you to reach out and ask them to protect Illinois tax payers from another tax increase. You can look up your representation on our website here. Enter the address for your business or your home and we’ll help get you connected.