* Greg Hinz writes about yesterday’s widely expected failure of a constitutional amendment for a graduated income tax…
Mr. Harmon’s problem wasn’t with his proposal. It was with the timing of his proposal, which comes at the very same time that lawmakers are preparing to vote on making permanent the “temporary” Illinois income tax.
Instead of being revenue-neutral overall, Mr. Harmon’s proposal and companion bill would have set rates at a level designed to pull in as much money overall as the pending permanent income tax hike. Thus, only individual income below $12,000 a year would be subject to a 2.9 percent rate. Anything above that would be hit with 4.9 percent or 6.9 percent, this at a time when rates are set to revert to 3.75 percent on Jan. 1 unless the Legislature extends the “temporary” hike.
Bottom line: While Mr. Harmon was trying to sell what advocates dubbed a “fair tax,” his plan was easily dubbed a “tax increase.”
If the senator really wants to pass a graduated income tax, my suggestion is to let lawmakers do what they’re going to do this year — and that’s probably to make the current 5 percent individual tax rate permanent. Then next year, he can come back with a proposal that’s truly revenue neutral and only shifts the burden around from the bottom toward the top.
* The Question: If you could give any unsolicited advice to proponents and opponents of a graduated tax for Illinois, what would it be?