Bob Daiber, a Democratic candidate for governor, paid $5,437 in state income tax in Tax Year 2016 (filed in 2017), he revealed today (Thursday) as he released his Illinois tax returns for tax years 2012 through 2016.
For 2016, Daiber and his wife Karen declared $158,113 in income on their joint return. They received a tax credit of $166 for paying $3,328 in property tax on their home in Marine, Ill. The result was an income tax obligation of $5,437 for the couple.
“This is a true Illinois 1040 tax return, just like ordinary working families throughout the state file,” Bob Daiber said. “It’s not muddied up with trusts or holding company dividends.”
Other candidates for the Democratic nomination for governor filed more complicated returns. In the case of J.B. Pritzker, $13.2 million of his income came from trusts. Pritzker also paid no state income tax in 2014. State Sen. Daniel Biss (D-Evanston) has released returns showing that in two of the last five years, he did not owe any federal income tax.
Furthermore, the income totals show that while Daiber makes a comfortable living as the regional superintendent of schools in Madison County, he is not as wealthy as his competitors in the race for governor. Pritzker declared a total of $15 million in taxable income, while Christopher Kennedy declared $1.2 million, and Gov. Bruce Rauner declared $91 million in state taxable income.
Daiber is also calling for a progressive state income tax, meaning the tax rate would be higher at higher income levels.
Illinois has the fifth-most regressive state and local tax structure in the nation, according to the Institute on Taxation and Economic Policy (https://itep.org/whopays/#). In Illinois, the poorest 20 percent pay 13.2 percent of their income in state and local taxes. The middle 60 percent pay 10.9 percent of their income in state and local taxes. The wealthiest 1 percent pay 4.6 of their income in state and local taxes. Illinois does not, in effect, have a flat tax. When you include sales tax, motor fuel taxes, taxes on tobacco and alcohol along with property tax and local taxes, such as the late and not lamented Cook County soda tax, we have a system that heavily taxes the poor, while leaving the wealthy relatively unscathed.
“There’s an old saying: You can’t get blood from a turnip, but that’s what we’re trying to do in Illinois,” Daiber said. “Every time we turn around, the state and local governments are scheming to nick low- and moderate-income residents for another few dollars, while the millions that our investment bankers and private equity managers are piling up are out of reach. For those who say a flat tax is the only fair tax, I say we have to make our state income tax much more progressive in order to reach flat tax status, let alone progressive tax status.”
Daiber proposes the following income tax structure:
* Income from $2,500 to $24,999 – 1 percent
* Income from $25,000 to $44,999 – 2.25 percent
* Income from $45,000 to $149,999 – 3.75 percent
* Income from $150,000 to $999,999 – 4.95 percent
* Income over $1 million – 6 percent
Unfortunately, Article 9 Section 3 of the Illinois Constitution of 1970 requires that when income tax is imposed, it must be at a non-graduated rate. There is no cute way around this; a progressive income tax will require an amendment to the Constitution. An amendment requires a three-fifths vote in both the House and Senate, and then a successful referendum, approved by either three-fifths of the people voting on the question, or a majority of the people voting in the election.
“The process for amending the Constitution is simple, but not easy,” Daiber said. “But that’s what it’s going to take. We’ll never get out of first gear as a state if we don’t do it. I plan to fight for it.”
I’m not sure if those rates would bring in more money or not. But, hey, at least he’s saying what he wants the rates to be. Nobody else has done that yet.
- Kay-Ro - Thursday, Jan 4, 18 @ 9:43 am:
How do you put a family making $150k in the same bracket as a family making a dollar short of a million?
It’s a moronic plan if you ask me.
- Ron - Thursday, Jan 4, 18 @ 9:48 am:
How would the proposed rates affect tax revenue?
- Ron - Thursday, Jan 4, 18 @ 9:51 am:
How about this:
* Income from $2,500 to $44,999 – 2%
* Income from $45,000 to $99,999 – 4%
* Income from $100,000 to $249,999 – 5%
* Income from $250,000+ – 6%
- Pundent - Thursday, Jan 4, 18 @ 9:52 am:
To Daiber’s credit at least he’s advancing the issue. Kennedy seems more intent on talking about property tax appeal attorneys and Pritzker has been largely silent as well. I may not agree with the structure and there’s more work to be done to show how revenue is affected but it’s a conversation that needs to happen.
- City Zen - Thursday, Jan 4, 18 @ 9:52 am:
==How do you put a family making $150k in the same bracket as a family making a dollar short of a million?==
New York puts a family making $215k in the same bracket as a family making a dollar short of a $1.07 million
- Kay-Ro - Thursday, Jan 4, 18 @ 10:03 am:
City Zen- Check your source again.
NY puts a family (married filing jointly) making btw $161k -$323k in a lower bracket. Your numbers are for an individual. I never said NY’s system makes sense either.
- City Zen - Thursday, Jan 4, 18 @ 10:04 am:
After plugging in the numbers, the break even in which people would start paying more taxes than today under Daiber’s plan is $1.25M. That’s pretty high. This might be revenue neutral, albeit more fair, depending on who defines fair.
If you upped the $150-999K bracket to 6%, the break even would be $420,000. Palatable for most, but would probably still upset the progressive crowd.
- City Zen - Thursday, Jan 4, 18 @ 10:09 am:
Kay-Ro - Apologies, you are correct. But you bring up an excellent point about different brackets for single vs married. Most states with graduated tax rates make a distinction between the two. I’m not aware if any progressive tax plan proposed for Illinois has done likewise.
- blankster - Thursday, Jan 4, 18 @ 10:17 am:
This will also open the door to taxing retirement income as my state rep told me several months ago and she seemed OK with that.
- Demoralized - Thursday, Jan 4, 18 @ 10:25 am:
==This will also open the door to taxing retirement income ==
This goofy topic really needs to go away. It isn’t happening. And it won’t happen.
- ISP RETIRED - Thursday, Jan 4, 18 @ 10:30 am:
I am retired and I have no problem with taxing retirement income at some level. Exempt first 50,000. Then 50,000 to 100,000 tax at 2% ,then anything over 100,000 tax at 3%.So as an example if you made $150,000 you would pay $2,500 in tax.
- Sue - Thursday, Jan 4, 18 @ 10:33 am:
You folks are not math majors. To compensate for rate reductions for lower to middle income wage earners1 the top rates will need to be more like 8 plus. Just look at CT, NY and other Blue states with progressive rate structures. There are more wages earned by People at 80 to 150 then at the higher wage numbers. Without an Illinois spreadsheet throwing up numbers is specious
- Demoralized - Thursday, Jan 4, 18 @ 10:40 am:
==ther Blue states with progressive rate structures.==
Yeah, all those blue states - like Wisconsin, Oklahoma, Kansas, Kentucky . . . shall I go on?
Are you even capable of making a comment that doesn’t drip with partisanship?
- Sue - Thursday, Jan 4, 18 @ 10:44 am:
Demoralized - you miss the point but you usually do. You cannot lower rates for 90 percent of Illinois wage earners and then set a top progressive rate of 6 percent The State needs more(lots more) revenue not less
- Demoralized - Thursday, Jan 4, 18 @ 10:46 am:
==You cannot lower rates for 90 percent of Illinois wage earners==
Call the Governor. That’s good advice. He wants to cut it for 100%.
- City Zen - Thursday, Jan 4, 18 @ 10:54 am:
==This goofy topic really needs to go away. It isn’t happening. And it won’t happen.==
This goofy topic will go away the same day all goofy references to Minnesota go away.
- Shemp - Thursday, Jan 4, 18 @ 11:03 am:
The last Constitutional convention vote in 2008 went down 2-1. Are labor unions from police to firefighter to SEIU to AFL-CIO, who were staunchly opposed in 2008 because their pensions could be at risk and right to work issues may come up, going to turn 180 and come out in support? If not, this thing has no legs anyway, right? More hot air all around.
- Demoralized - Thursday, Jan 4, 18 @ 11:07 am:
City:
You’re the one constantly reminding us all who taxes retirement income. Who cares who taxes it? We don’t and we won’t. It’s a waste of time to discuss it.
- A Young Person - Thursday, Jan 4, 18 @ 11:09 am:
My guess is that this would result in a significant decrease in revenue. You’re only taxing dollars over $1 million higher than now, and cutting $1,500 from the first $45k that everyone makes.
- Ron - Thursday, Jan 4, 18 @ 11:09 am:
Illinois needs to change its Constitution immediately. It is literally one of the most unfair documents in the US.
- rivvedup - Thursday, Jan 4, 18 @ 11:11 am:
We’ve managed to amend the IL Constitution with weak recall and spending restriction on road tax funds provisions, so why is it impossible to fix Illinois broken income tax system again?? It isn’t. Whether Daiber’s current math works is another story.
- RNUG - Thursday, Jan 4, 18 @ 11:18 am:
== The last Constitutional convention vote in 2008 went down 2-1. ==
False logic.
You can amend any individual clause in the Illinois State Constitution without having a Constitutional Convention. All you have to do is pass the change (progressive income tax, for example) through the House and Senate, and present it to the voters.
And the Governor isn’t even part of the process . .
- City Zen - Thursday, Jan 4, 18 @ 11:28 am:
==Yeah, all those blue states - like Wisconsin, Oklahoma, Kansas, Kentucky . . . shall I go on?==
18 states with a progressive income tax have top brackets at $60,000 or less. Kentucky is $75,000. Wisconsin is actually an outlier if you’re using political leanings as a barometer. Arizona and Ohio have lower effective tax rates than Illinois even though they have progressive rates. Progressive doesn’t always mean higher.
Sue has a point though. My data is a couple of years old, but it says while only 12% of the tax returns are filed by those earning $100,000 to $1M, they account for 40% of the revenue. I don’t think Daiber’s rates would generate enough revenue without impacting those assuming most of the tax burden.
- Shemp - Thursday, Jan 4, 18 @ 11:35 am:
Thank you for the correction RNUG
- Not a Billionaire - Thursday, Jan 4, 18 @ 12:12 pm:
First glance is revenue neutral because a quarter of all income is from over 250k top 1 percent is 20 so the small increase above a million makes up for the other cuts.I think the govs role is political he can give cover and help it pass.
- Not a Billionaire - Thursday, Jan 4, 18 @ 12:16 pm:
I would keep the rates going up behind a million to be just under New York and California.I would also make sure all our lower rates remain lower than Wisconsin and Iowa
- Kyle Hillman - Thursday, Jan 4, 18 @ 12:38 pm:
How does this produce the revenue we need? It is basically a millionaires tax that doesn’t tax them enough coupled with a tax cut.
This is the kind of tax rate plan you get when someone is running for Governor.
- Anon2 - Thursday, Jan 4, 18 @ 12:54 pm:
I don’t see how this could result in anything but a massive revenue reduction. Assuming these rates are marginal rates, everyone making up to $999k gets some form of tax cut because their top marginal rate would be the current rate and their first $150k of income would be taxed at lower rates. There are not nearly enough incomes over $999k for a 1.05% surtax on that income to make up for the cuts. I agree that it’s nice to see an actual proposal, however.
- SSL - Thursday, Jan 4, 18 @ 1:01 pm:
Illinois barely functions from a governmental perspective, so it is difficult to believe they could come together to implement a progressive tax. And while they need to tax retirement income, that scares them silly, so they won’t do that either. But look at the bright side. As the worst fiscally performing state in the union, Illinois can’t go any lower. Things are looking up.
- anon2 - Thursday, Jan 4, 18 @ 1:37 pm:
The key to successful enactment of a graduated income tax amendment is to provide a tax cut to the majority of residents, while hiking taxes only on those who can best afford to pay.
- Stand Tall - Thursday, Jan 4, 18 @ 1:49 pm:
“Are you even capable of making a comment that doesn’t drip with partisanship?” - That’s funny, like the majority of the comments on this blog are unbiased.
- J - Thursday, Jan 4, 18 @ 7:07 pm:
Static revenue change from this would be about $6 billion in lower revenues. Zero chance this ever gets enacted.
- thechampaignlife - Thursday, Jan 4, 18 @ 7:33 pm:
===How do you put a family making $150k in the same bracket as a family making a dollar short of a million?===
His plan, while maybe not ideal, is still lightyears better than the current situation where the family making $30k is in the same bracket as Gov. 0.1%.