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LAWMAKERS
CRACK OPEN PANDORA’S BOX WITH GRADUATED INCOME TAX AMENDMENT
Illinois Policy Institute/
Austin Berg
Ultimately, the state’s spending and debt
habits mean Pritzker’s plan will be a bridge to higher taxes for the
middle class. Pritzker and state lawmakers should instead pursue
sensible spending reforms that don’t require declaring open season on
Illinois taxpayers.
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 The cornerstone of J.B. Pritzker’s political career has
arrived. A graduated income tax is moving.
Pritzker heralded new language for a constitutional amendment April 10. Barring
any unlikely changes, this will be what the governor rides until the end of May.
It adds 26 words to the Illinois Constitution and eliminates 43.
Those few words mean a lot. Together, they would be the biggest change to
Illinois taxation since the state adopted an income tax in 1969. And their
inartful phrasing means Illinoisans have good reason to be frightened.
Those concerned about Pritzker’s progressive tax have been stating a simple
message for months: It is a bridge to higher taxes on the middle class.
Pritzker’s new wording – two elements in particular – only confirms that fear.
One applies to individuals. The other to businesses.
First, the individuals. The Illinois Constitution currently bars the state from
imposing more than one type of tax on income. But Pritzker’s amendment scraps
that language, allowing Illinoisans to be taxed more than once on the same
dollar earned. If Pritzker’s amendment becomes part of the
Illinois Constitution, the state could adopt an extra income tax
surcharge dedicated entirely to pensions, for example. A quarter of
the state budget is currently consumed by pension costs, and a 2018
report published by the Federal Reserve Bank of Chicago suggested a
1 percent statewide property tax to pay for soaring pension
liabilities. Pritzker pitched new pension obligation bonds to
investors earlier this year.
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Specifically, Pritzker’s amendment deletes these lines from the
Illinois Constitution: “A tax on or measured by income shall be at a
non-graduated rate. At any one time there may be no more than one
such tax imposed by the State for State purposes on individuals and
one such tax so imposed on corporations.”
Pritzker’s amendment eliminates that language and adds this: “The
General Assembly shall provide by law for the rate or rates of any
tax on or measured by income imposed by the state.”
Todd Maisch, president and CEO of the Illinois Chamber of Commerce,
raised concerns about this language in committee testimony. “If
somebody decides there’s a need for another income tax increase, I
think it’s going to look a lot like a ‘special assessment for public
safety.’ It’s going to be a ‘special tax dedicated to education.’
It’s going to go under that guise,” Maisch said.
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