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PROGRESSIVE TAX PROPONENTS DISPLAY MAGICAL THINKING

Illinois Policy Institute/ Vincent Caruso

Advocates for a progressive income tax claim to offer relief for middle-class families. But that doesn’t jive with real proposals in Springfield or lawmakers’ spending habits.

It isn’t just the festive backdrop of leprechauns and four-leaf clovers that ushers Illinois into St. Patrick’s Day. The rhetoric of some politicians, too, has ventured into myth-making.

Proponents of amending the Illinois Constitution to turn the state’s flat income tax into a graduated, or “progressive,” income tax offer a colorful example. A progressive tax, the fable goes, would merely hike taxes on the rich while offering relief to distressed middle-class residents.

But this claim disintegrates upon inspection.

Take House Bill 3522, alternately titled the Fiscally Responsible Illinois Entering New Days and Leaving Yesterday, or FRIENDLY, Act. One of a few progressive tax proposals floating through the General Assembly, HB 3522 establishes four revised marginal income tax rates that amount to an income tax hike for Illinoisans earning as little as $17,300 per year.

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Here’s the reality: In order to generate the revenue gains progressive-tax advocates envision, they must raise taxes on a majority of Illinoisans – not just the wealthy. This has been demonstrated by another progressive income tax proposal. The plan put forth by Democratic gubernatorial candidate Bob Daiber indeed lowers income tax rates on earners in the middle- and lower-brackets. However, an Illinois Policy Institute analysis found that the plan would generate $5 billion less than does the current flat tax, inviting future tax hikes on ordinary Illinoisans.

Illinoisans cannot afford further tax hikes.

July 2017 saw the largest permanent income tax hike in state history. And 2011’s temporary income tax hike cost the state 9,300 jobs and nearly $56 billion in economic activity.

Rather than continually increasing taxes to chase annual budget deficits, Illinois needs to curb spending to responsible levels. Fortunately, state Sen. Tom Cullerton, D-Villa Park, and state Rep. Allen Skillicorn, R-East Dundee, have both filed constitutional amendments – SJRCA 21 and HJRCA 38 – that would tie growth in state spending to growth in the state’s economy.

Magic tricks and fairy tales have their place. But not in the General Assembly.

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