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 Illinois Gov. J.B. Pritzker just contributed $51.5 million to a
committee working to convince voters Nov. 3 to back a progressive income tax
structure in Illinois, which could result in tax hikes of up to 47% on 100,000
small businesses.
The tax change also opens the door to taxing retirees.
Pritzker almost single-handedly has been funding the Vote Yes for Fairness
committee being run by his former deputy campaign manager. Besides the $51.5
million donated June 26, he gave $5 million in December.
One other individual donated $250, according to the Chicago Tribune.
A progressive tax was one of Pritzker’s signature campaign promises, but despite
his Robin Hood rhetoric about taxing the rich, the tax can significantly hurt
lower-income workers.
 Pritzker promises tax relief, yet his tax rates would save $6 for someone
already paying $1,800 in state and local taxes on a salary of $12,400. That $6
saving was more than outstripped by Pritzker in 2019 when he signed the $100 gas
tax hike and $50 vehicle sticker hike, which fell disproportionately on the
poor.
Progressive taxes also would impact Illinois’ most fertile source of jobs, with
tax hikes of up to 47% on more than 100,000 small businesses. The tax would make
it harder to recover from COVID-19 and make it harder to return to work for 1.38
million Illinoisans idled by the pandemic.
“I believe that if they impose the progressive tax you will see even more people
leave the state,” said Michael Patricoski, a dentist from Palos Heights. “You
could never run a business as the state runs using our money. They think it is
an unending wallet upon which they can draw money from. You cannot continue to
outspend your revenue.”
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Compared to large corporations, small businesses
may see their taxes increased five times higher.
Corporations are facing a 10% tax increase from
9.5% to 10.49%, but small businesses will see their tax rates jump
from 6.45% to 9.49%. Illinois would then have the third-highest tax
rate on businesses in the country.
Research shows more than half of all U.S. small businesses might
have to close their doors from ongoing COVID-19 restrictions. As
many as 21,700 restaurants could be gone in Illinois, but the
impacts are across business sectors.
“If it continues the way it is right now, I can’t see myself
surviving the next three months,” said Corrine Campbell, the owner
of a small boutique in Springfield.
In addition to raising taxes on job creators, the progressive income
tax is shaping up to be a way for state lawmakers to institute a
retirement tax: Every state with a progressive income tax also taxes
retirement income. Even state Treasurer Michael Frerichs said
approving a progressive income tax is the first step toward taxing
retirement income.
The economic hardships created by Pritzker’s COVID-19 mandates would
be amplified by imposing a tax that would draw $3.7 billion out of
the state economy during a recession, a move economists roundly
reject as a bad idea. Yet when pressed at an April news conference
about reconsidering the progressive income tax amendment to reassure
business owners, Pritzker said Illinois “needs it now more than
ever.”
What Illinois needs now more than ever are not Pritzker’s tax
reforms, but rather spending reforms.
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