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 Gov. J.B. Pritzker has hinged many of his promises on his hope
the state will adopt a graduated, or “progressive,” income tax hike. But tax
relief for 97 percent of Illinoisans is no longer a guaranteed part of that
package, according to a new ad.
A TV ad titled “Hole” was released March 21 by Think Big Illinois, a nonprofit
advocacy group that lists Pritzker among its donors. It walks back the claim
that Pritzker’s tax plan would deliver an income tax cut for 97 percent of
Illinoisans, which was a major selling point when Pritzker’s administration
launched its “fair tax” campaign March 7.
Instead, the latest ad shows the governor promising taxpayers “will not see an
income tax increase” – as opposed to seeing a tax cut. Given the miniscule tax
breaks promised in his plan, dumping the tax break claim should come as no
surprise.
Take the typical married-couple family in Illinois with two children. That
family makes $94,675 a year, according to the most recent data from the U.S.
Census Bureau, and gets a deduction for paying the statewide median property tax
bill of $4,692 per year. Pritzker’s plan promises $131 in tax relief for this
family, or $5.03 on a paycheck every other week. And “relief” is relative: That
same family just had its state income tax hiked about $1,000 in 2017.
Not seeing a tax increase is different than receiving a tax cut. And while the
governor’s office has so far failed to make public the full details supporting
the plan – despite multiple Freedom of Information Act requests from the
Illinois Policy Institute – what scarce information is available suggests
ordinary taxpayers would not be protected from tax hikes under that system.
That’s because not only does Pritzker’s plan fall short of its revenue estimate,
but it also falls far short of the funds needed to account for Pritzker’s
proposed additional spending. To pay for the governor’s spending promises,
typical Illinois families would have to endure a $3,500 tax hike.
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“Workers deserve an income tax cut and a property
tax break,” the governor said during his Feb. 20 budget address. If
recent history is any indication, Pritzker’s progressive tax
proposal would achieve neither. In Connecticut – the only state in
30 years to switch from a flat to progressive income tax – middle
class income taxes have risen by 13 percent, while property taxes
have spiked by over 35 percent, measured as a share of income.
While Connecticut’s economy has floundered since adopting a
progressive system in 1996, states such as Kentucky and North
Carolina have scrapped their progressive taxes. Kentucky just did it
last year to become more competitive and North Carolina’s economy
improved after they made the move. The Tax Foundation recommended
Wisconsin do the same to become more competitive.
Pritzker’s tax plan would make Illinois’ unfriendly business climate
even more hostile. Small businesses create the vast majority of new
jobs in Illinois. Pritzker’s progressive tax plan would pummel a
significant chunk of that community. The state’s business climate
would plummet to 48th in the nation if it adopted Pritzker’s
graduated income tax, according to the nonpartisan Tax Foundation.
Pritzker’s goals are honorable: His desire to deliver tax relief to
the middle class, pass a balanced budget and restore the state
economy signals an understanding of the symptoms of decades of
fiscal mismanagement.
But the progressive tax is the wrong answer, and an answer that the
experts and evidence say will make Illinois’ problems worse.
Only through commonsense – and bipartisan – measures such as pension
reform, school district efficiency and a spending cap can Pritzker
arrive at a better plan. Fortunately, that plan already exists.
It’s up to the governor to summon the political courage to pursue
it.
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