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.
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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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