J.B. Pritzker | Forbes
EDWARDSVILLE – Democratic gubernatorial candidate J.B. Pritzker is pushing a progressive tax increase plan for wealthier wage earners in the state and as Republicans line up against it, observers predicted the billionaire businessman’s attempt will be a tough sell.
“It’s hard to get Americans to vote for this kind of thing,” Christopher Z. Mooney, professor of state politics in the Political Science Dept. at the University of Illinois told the Record. “They think when I make a million I don’t want more taxes. We’re entrepreneurial.”
Currently Illinois has as flat income tax rate of 4.95 percent for individuals and 7 percent for corporations.
Under Pritzker’s plan, a temporary raise in the state's flat income tax rate on wealthier wage earners would begin by using exemptions for lower income earners, creating credits and deductions. That is the first part of the plan.
Stage two would be converting to a permanent graduated individual income tax rate and that would require an amendment to the Illinois State Constitution, not an easy accomplishment observers agree, and one that would take at least two years to achieve by the year 2020.
“The Illinois Constitution does not allow for a different (higher for wealthier) tax rate like the feds do,” Mooney said. “It’s a straight-up rate. They would have to change the constitution and that’s a pain in the neck. Those who are opposed to higher levels of income tax can argue it’s a tax increase. Though it’s a difficult process it’s not out of the realm of possibility.
It would take strong leadership and a good campaign,” he added.
Mooney indicated that giving lower income wage earners exemptions to pay less in taxes than they do now could be a stand-alone part of the plan.
“You can either change the constitution or change exemptions,” he said. “You could do either one as a permanent change.”
Repeated requests for comment from Pritzker went unreturned. However the candidate told the Chicago Tribune on April 3 his plan would benefit public grade and high schools, which he indicated receive a low share of individual taxes from state residents. According to the report, approximately 70 percent of school funding comes from property taxes.
Pritzker said his plan would not only expand education but also give a tax break to lower income workers and lower the state’s burden on property tax payers.
According to the Tribune report, though, Pritzker declined to offer specifics. Each percentage point raised in state individual and corporate income tax could generate approximately $3.7 billion in revenue, about the same amount state officials pledged to provide local schools over the next 10 years.
Republicans have lined up against the proposal accusing Pritzker of being vague and dodging the answer on how high he would raise taxes. Illinois Governor Bruce Rauner called the progressive tax a “calculated killer.”
“It's taking away jobs and opportunities for middle class families,” he told the Record in a statement. “Emptying the pockets of hard-working Illinoisans isn’t the way to solve our problems. The only real solution is to pass a balanced budget and reforms that build our economy, grow jobs and create opportunity for all the people of Illinois.”
The tax plan received a setback on April 13 when House Republicans garnered enough votes to defeat a proposed ballot initiative to change the Illinois Constitution - three votes short of the needed 71. Senate Republicans are also backing a resolution opposing a constitutional change for a progressive income tax.
House member Charles E. Meier said he had been against such a proposal for six years and so did not bother to sign a recent list of Republican names in opposition.
“It wasn’t necessary to sign that list I was already against it (tax hike),” he told the Record. “The purpose of the list is letting it be known we oppose the idea. There are no reforms here, it will raise taxes. It will raise taxes for a family with a $36,000 income, and I don’t consider that a wealthy family.”
Meier described the proposal as a “tax across-the-board” that would result in a rate hike for 82 percent of the population.
“They said it would only raise taxes for the rich, but we’re saying it’s just a money grab,” he added.