If you’re an ordinary Illinoisan, you may be tempted to support Gov. Pritzker’s plan to change Illinois’ flat tax structure to a progressive one. He’s promised to lower your taxes if you’ll support the switch.
You should reject his offer. Simply put, the governor’s “Fair Tax” rates aren’t credible. Most Illinoisans might think they’ll get a good deal – he’s promised a tax cut for 97 percent of the state’s residents – but in reality, they’re setting themselves up to take a hit.
Here’s why changing Illinois’ flat income tax to a progressive tax is a bad idea:
Amendment now, rates later
If and when Illinoisans finally vote on a constitutional amendment to change the tax structure, they won’t actually be voting on the “Fair Tax” rates Pritzker has promoted. Instead, they’ll only be voting to allow for a progressive tax structure. The actual tax rates will only be determined by politicians after the constitution is changed. Illinoisans will entrust politicians with what amounts to a blank check by authorizing a progressive structure with no numbers attached. They don’t deserve that trust.
Taxing only the rich won’t work
Pritzker says the wealthy will pay more while the rest of Illinois gets a tax cut under the progressive tax. But there’s little incentive for Illinois’ wealthiest residents to get stuck with a 60 percent increase in their income tax rates. There are fewer than 20,000 Illinoisans who make $1 million or more in net income a year, but they provide more than 15 percent of the state’s revenues. Only a few have to leave to throw a wrench into Pritzker’s plans.
Pritzker’s “Fair Tax” isn’t a real plan
The governor’s “Fair Tax” rates he’s promoting simply aren’t real. They’d raise just $3.4 billion in new revenue, only a fraction of the $10.7 billion to $18 billion in new, additional spending Pritzker has promised. The only way he can really keep his spending promises is to hike taxes on the middle class.
Many progressive tax states hit the middle class harder than Illinois
Pritzker calls progressive taxes more fair for the middle class, but fifteen progressive tax states hit middle-class, single filers with incomes of $75,000-plus harder than Illinois’ current flat tax does: Arkansas, Connecticut, Delaware, Georgia, Hawaii, Idaho, Minnesota, Montana, Nebraska, New York, Oregon, South Carolina, Virginia, West Virginia and Wisconsin.
The governor will eventually need more money to fulfill his spending promises. And like so many other progressive income tax states have done, he’ll likely end up hiking taxes on the middle class to get it.
Just say no
Illinoisans are already burdened with the nation’s highest property taxes and one of the highest overall state-local tax burdens. Illinois is losing people faster than almost every other state. Enacting a progressive tax will only hollow Illinois out further.
If Pritzker really wanted to turn Illinois around, he’d keep Illinois’ flat tax structure in place and focus on growing Illinois’ tax base, not its tax rates.