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Harmon: Graduated income tax vote next week

Friday, Apr 25, 2014

Posted by Barton Lorimor (@bartonlorimor)

* Tribune…

While prospects for achieving a three-fifths vote of senators in the Democratic-controlled chamber are considered good, getting the same super-majority in the Democratic-led House is believed questionable at best. Earlier this week, Democratic House Speaker Michael Madigan said the proposed constitutional amendment was “significantly short” of the 71 votes needed to put it on the Nov. 4 ballot.

The House sponsor of the plan, Rep. Christian Mitchell, D-Chicago, said he couldn’t say whether he had the required support needed for passage “at the moment.” Vote counts, he said, “are dynamic and ever changing.” Harmon, however, said he was “confident I have the votes in the Senate.”

In an effort to make the proposal more politically palatable, Harmon and Mitchell have proposed separate state legislation that would replace the state’s current 5 percent personal income tax rate, which is set to revert to 3.75 percent in January, with a three-bracket income tax. The first $12,500 in income would be taxed at 2.9 percent, income on top of that to $180,000 would be taxed at 4.9 percent, and all income above $180,000 would be taxed at 6.9 percent.

* Speaking of taxes, take a look at these opposing guest editorials concerning the motor fuel tax. The first is from Doug Whitley…

User fees are a fair and practical funding source for transportation infrastructure. It ensures that those who drive more — and therefore place more wear on our infrastructure — would pay more. Thanks to greater fuel efficiency and no motor fuel tax increases, today’s motorists contribute much less to support highway construction than in prior decades.

We cannot let our transportation networks deteriorate and become our next crushing problem like pensions and education. We need a better way forward that assures a reliable, predictable and stable funding stream to support our mobility and prosperity. We must accept the responsibility to be good stewards of our present and future transportation needs, and that time is now.

A counter from Bill Fleischli of the Illinois Petroleum Marketers Association…

Clearly, the state needs to maintain its infrastructure, but we need to get behind the wheel and stop this push for higher fuel taxes. Illinois Auditor General Bill Holland released a report in 2013 that found Illinois spent less than half of its dedicated road fund dollars directly on road construction costs in eight of the prior 10 fiscal years.

Taxpayers should be outraged. Gas station owners and convenience store retailers are opposed to any plan that would have Illinois drivers paying more to fill-up their gas tanks.

There have been no votes in the Illinois General Assembly on specific proposals to raise the motor fuel tax in 2014, but there is a concerning amount of conversation about the possibility.

That possibility has at least been raised over in the House where the Revenue & Finance and State Government Administration Committees have been working towards a package of tax code changes.

* And here is a budget and state government round-up. Notice the re-appearance of a few doom and gloom stories…

* Minimum wage workers, state lawmakers clash on fair pay, taxes: If the state were to adopt this structure lawmakers would set the new rates. That brings up concerns for opponents. “There’s no limit on that which means they can raise it to whatever level they want and it’s going to be middle class families that get hurt the most.” -says 35th District State Senator Dave Syverson.

* Illinois lawmakers suggest abandoning resort: In a hearing to discuss the Illinois Department of Natural Resources budget Thursday, state Rep. Kelly Burke, D-Evergreen Park, asked whether agency officials had considered giving up on the 25-year-old state-owned Eagle Creek Resort south of Findlay. “Why don’t we get rid of it?” Burke asked. Natural Resources Director Marc Miller did not dismiss the idea, telling a panel of lawmakers that the state faces challenges when it comes to making Eagle Creek financially viable. The 138-room lodge has been closed since 2009 because of an outbreak of mold. A Decatur company brought in to repair the damage in 2010 walked away from the job earlier this year because of a dispute with the agency.

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* I-Team: More school security concerns in Illinois than funding

* Cristal Thomas: Protecting Illinois’ pregnant workers shouldn’t be a heavy lift

- Posted by Barton Lorimor        

32 Comments
  1. - Late to the Party - Friday, Apr 25, 14 @ 7:48 am:

    Minimum wage workers need a raise because of the effects of inflation. State retirees, however, need to have their pension increase cut.


  2. - Late to the Party - Friday, Apr 25, 14 @ 7:52 am:

    Motor fuel taxes: Didn’t we recently raise license plate fees for everyone to pay for recharging stations for electric vehicles? Fully electric vehicles use no gasoline and pay no gas use tax; gasoline/electric hybrid vehicles use little gas and pay little gas use tax.


  3. - Grandson of Man - Friday, Apr 25, 14 @ 9:08 am:

    I was wondering if some deal could be made between Republicans and Democrats to get the term limits amendment and the progressive tax amendment on the November ballot. Perhaps this deal wouldn’t sit well with a lot of legislators who oppose either plan. Just a thought…


  4. - Walker - Friday, Apr 25, 14 @ 9:25 am:

    Not for anything, but if this proposal had real legs, Madigan or one of his experienced leaders would be carrying it in the House. We’ll see.


  5. - Jimbo - Friday, Apr 25, 14 @ 9:45 am:

    Late, it is different when it is someone else’s money lol. Everyone else should (rightfully) pay their workers enough to account for inflation. The state though… Do as they say, not as they do.


  6. - A guy... - Friday, Apr 25, 14 @ 10:14 am:

    The Illinois Senate maintains its status as the most tax friendly chamber in the country. Amazing.


  7. - Robert the Bruce - Friday, Apr 25, 14 @ 10:25 am:

    Which House democrats are against a progressive income tax?


  8. - forwhatitsworth - Friday, Apr 25, 14 @ 10:30 am:

    I wonder why “Late” feels that state retirees should not be able to keep up with inflation? I’m a retired teacher. Is diminishing my pension benefit my punishment for dedicating my life to the service and education of others?


  9. - Anonymous - Friday, Apr 25, 14 @ 10:35 am:

    ref. motor fuel taxes. The Motor Fuel Tax Fund is like the state pension fund. It gets raided to pay other bills. Then the cry that we need increases because there is not enough money in the funds to fund them. State funds, unless designated by law on what the money within the funds can be used for, are just slush funds.


  10. - dave - Friday, Apr 25, 14 @ 10:36 am:

    **I was wondering if some deal could be made between Republicans and Democrats to get the term limits amendment and the progressive tax amendment on the November ballot.**

    It is impossible for the GOP leadership term limit amendment to get on the ballot. It can’t meet the constitutional requirement for being read into the record 3 times in each chamber.


  11. - Darienite - Friday, Apr 25, 14 @ 10:46 am:

    FYI, the local agency portion of the MFT funds can be used to buy salt, aggregate, HMA material, signs, traffic signal and lighting maintenance and energy (i.e., electric) costs. Assuming IDOT and Counties follow suit, is this what the Auditor General has a problem with?


  12. - Geronimo - Friday, Apr 25, 14 @ 10:47 am:

    All this raiding of funds……….either we are woefully undertaxing for all we like to spend on, or money is disappearing to secret places. Which?


  13. - Langhorne - Friday, Apr 25, 14 @ 10:55 am:

    why would senators go out on a limb and vote for the progressive tax plan, at least until madigan says he is close?


  14. - dave - Friday, Apr 25, 14 @ 10:58 am:

    **why would senators go out on a limb and vote for the progressive tax plan, at least until madigan says he is close?**

    Because the progressive tax plan is a much better alternative than the extension of the 5%, and would mean that 94% of the state would pay less than the 5%.

    Its widely supported in districts across the state, and is a very good political vote.


  15. - Keyser Soze - Friday, Apr 25, 14 @ 11:09 am:

    Haven’t seen a poll; how does the public feel about a graduated income tax?


  16. - Tom Joad - Friday, Apr 25, 14 @ 11:13 am:

    I agree with Bill Fleischli. We should start shifting non-road building expenditures off of the gas tax. We should start with this upcoming new budget.


  17. - independent - Friday, Apr 25, 14 @ 11:15 am:

    The graduated tax makes sense, I hope it passes.


  18. - tberry - Friday, Apr 25, 14 @ 11:30 am:

    The mayor of Chicago wants to raise property taxes. The President of Cook County won’t rule out a raise in county property taxes–this means she’s for it. The Governor wants to make a temporary tax hike permanent. And now they are considering a “progressive” income tax that would have the effect of making a temporary income tax hike permanent.

    Enough of the tax and spend! Are they all trying to run the middle class out of the city/county/state?


  19. - A guy... - Friday, Apr 25, 14 @ 12:03 pm:

    Welcome to the “Raise our taxes, it really is a popular position” focus group. Leave your perspective in the lobby and pull up a bean bag chair. Yikes.


  20. - Formerly Known As... - Friday, Apr 25, 14 @ 12:03 pm:

    == Graduated income tax vote next week ==

    == income tax Increase vote next week ==

    Fixed that for you, Senator Harmon.


  21. - mcb - Friday, Apr 25, 14 @ 12:26 pm:

    -dave-
    94% of the population would pay 0.1 percentage points less than the 5%. So in other words, 94% of the population would pay almost exactly the same as they would under an extension. That’s obviously so much better.

    No one supports this measure because of what it means to 94% of the population. It’s what it means to the other 6%. Let’s take more of their money to keep growing government as wastefully and inefficiently as we can, especially if we can funnel it into NRI type programs and patronage hiring so we can keep one side of the aisle in power longer. Great idea! More of the same!


  22. - dave - Friday, Apr 25, 14 @ 1:05 pm:

    **94% of the population would pay 0.1 percentage points less than the 5%.**

    Wrong… you should learn about marginal tax rates.

    For example, a person making $90k would actually be paying a rate of 4.5%.


  23. - Anon. - Friday, Apr 25, 14 @ 1:09 pm:

    ==I wonder why “Late” feels that state retirees should not be able to keep up with inflation?==

    Ummm . . . because if he came right out and said it’s wrong to take away the inflation adjustments, it wouldn’t be snark?


  24. - Formerly Known As... - Friday, Apr 25, 14 @ 2:27 pm:

    I just looked at the Harmon plan details. How is no one mentioning the impact this would have on take-home pay of the working poor? This is nuts.

    The Harmon plan calls for rates of

    $0 - $12,500 = 2.9%; $12,500 - $180,000 = 4.9%; $180,000 and above = 6.9%

    By law, tax rates are supposed to be 3.75% for all beginning on January 1, 2015.

    A person making minimum wage in Illinois makes $17,160 annually. This would raise taxes on those making minimum wage from 3.75% to 4.9%.

    That is not the right thing to do for those working low income jobs. Not good at all.


  25. - Formerly Known As... - Friday, Apr 25, 14 @ 2:29 pm:

    At least the Jakobsson plan, which had its own glaring flaws, dropped the rate to 3% for those making less than $18,000.


  26. - Formerly Known As... - Friday, Apr 25, 14 @ 2:41 pm:

    Upon further review, Harmon’s plan relies on marginal rates rather than flat rates per bracket as was my initial understanding.

    That is better than current law but worse than Jakobsson’s plan. Someone making $17,160 in Illinois would pay taxes of $590.84 under Harmon’s plan, $514.80 under Jakobsson’s plan, and $643.50 under current law.


  27. - mcb - Friday, Apr 25, 14 @ 3:03 pm:

    -dave-
    Either way, much higher than current law, which would drop the 90k earner to 3.75%. This idea is a tax hike. It would raise the rates for most tax payers in January. This is a choice between two different tax hikes. And I would reiterate the second part of my earlier post.
    “No one supports this measure because of what it means to 94% of the population. It’s what it means to the other 6%. Let’s take more of their money to keep growing government as wastefully and inefficiently as we can, especially if we can funnel it into NRI type programs and patronage hiring so we can keep one side of the aisle in power longer. Great idea! More of the same!”


  28. - Formerly Known As... - Friday, Apr 25, 14 @ 3:08 pm:

    After running the marginal rates in comparison to current law taking effect on January 1 2015:

    The Harmon plan would raise taxes on anyone making $21,740 or more.

    That’s not good.


  29. - Formerpol - Friday, Apr 25, 14 @ 3:24 pm:

    I’m absolutely fed up with the Democrats’ always raising or trying to raise our taxes and fees! And I’m not alone. They don’t know how to spend our money wisely now - it’s all about new spending and new programs. For the first time in my life, I’m considering voting straight GOP this year to shake things up. Agencies and programs which depend on state funding will all have to take cuts. It’s the only way to save the state and stop all the smart, successful people who are leaving the state in droves!


  30. - Norseman - Friday, Apr 25, 14 @ 3:40 pm:

    Following up on Langhorne’s train of thought, why would Cullerton allow his members to go out on a limb and vote for the progressive tax plan, at least until madigan says he is close?


  31. - Jeff Trigg - Friday, Apr 25, 14 @ 3:57 pm:

    People making less than $12,500 (or $18.000) have enough problems without the state taking ANY percentage of their income. I never understood why Democrats are willing to tax the income of poor people, state or federal. Its counterproductive. And I know, but EITC is nothing more than a gimmick to plug up hole or two and doesn’t help everyone.


  32. - Just The Way It Is One - Friday, Apr 25, 14 @ 4:21 pm:

    Woo hoo–let the votes be cast on this one–even though Mike Madigan said there wouldn’t be enough to get the 3/5th “Supermajority” to get it on the Ballot for the People. At least we’ll see where the Legislators stand on it, and momentum may be gained toward passage of the Harmon-Mitchell Bill–so that rather than making it Constitutional, at least some substantive progress on a fairer, graduated, Income tax can be achieved–although they may want to UP that highest bracket amount a bit, say to at least $200,000 Annual Income (e.g. if a married couple filing jointly), ‘cuz, then, it really is hard to deny that you’re not really rakin’ it in, and can easily afford to ante up a few bucks more for the People out of your big Pot…!


Sorry, comments for this post are now closed.


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