With an entire year until the 2018 election for Illinois governor, instituting a progressive tax is already emerging as a battleground topic in the race.
In one of his newest campaign ads, Democratic gubernatorial candidate J.B. Pritzker highlights the benefits of taxing people who make more at a higher rate than those who don’t.
“As governor, I’ll fight to pass a progressive income tax,” he says in the ad. “It will make the wealthy pay more, support priorities like education, and reduce the tax burden on middle-class families.”
Pritzker’s Democrat challengers also have spoken out in favor of a progressive tax, also known as a graduated income tax.
Gov. Bruce Rauner opposes a progressive tax, calling it the last straw for overtaxed Illinoisans.
“Many more will leave that have already been leaving,” he said at an appearance in 2016. “There’s been an argument that says, ‘Let’s get higher income people to pay and then middle income people might not have to pay more.’ That’s baloney.”
His Republican challenger, state Rep. Jeanne Ives, also opposes a progressive tax.
To change from a flat tax to a progressive one, voters first must vote to amend the state's constitution to allow it.
Battles over the progressive tax aren’t new. It was called a “Fair Tax” in 2014 when it failed.
House Speaker Michael Madigan tried, in vain, to place a surcharge on income over $1 million in the spring of 2016. Another Democrat leader filed a bill months later to institute a progressive tax that ultimately failed as well.
According to census data, the average pay of the 114,000 people leaving Illinois for other states in 2016 was nearly $80,000. The group of people leaving Illinois in droves include millionaires, who along with other higher-end earners would most be impacted by a progressive tax. According to research firm New World Wealth, about 3,000 Chicago millionaires left the state in 2015. Chicago was the only U.S. city to see such a large number of millionaires leave for other U.S. states.
A March WalletHub report on overall tax burden put Illinois as the costliest in the nation. It said the state’s residents pay more than $8,000 annually in state and local taxes.
Analysts with the nonpartisan Tax Foundation called Illinois' flat tax as "its saving grace" in terms of policies that attracted or repelled businesses.
In its annual "Tax Freedom Day" report, the foundation determines the day of the year when the residents of each state have worked enough to pay off their tax burden. Analyst Nicole Kaeding said that Illinois' Tax Freedom Day, which is already seven days behind the nation average, would fall even later if the state instituted a progressive income tax.