Behind Madigan’s graduated tax resolution
Thursday, May 3, 2018 - Posted by Rich Miller
* Politico makes a good point today that Speaker Madigan’s graduated tax resolution means nothing legislatively because nothing will actually get on the ballot this year…
(C)hanging our system from a flat tax to a graduated income tax requires a constitutional amendment. It’s too late to get the question before voters on the November ballot, which means the earliest that could happen is 2020.
This push for a new tax system comes from progressives, who harness much of the party energy and are pressuring Madigan to impose a structure they say shifts the tax burden onto the wealthiest and away from the poor and middle class. It’s a longtime favorite of organized labor, too.
Recall that nearly every Democrat who ran for governor supported the progressive income tax. How can Madigan, fresh from the primaries, close out the legislative session without addressing it? Republicans say the proposed change is riddled with flaws, including the risk of giving politicians too much leeway over tax hikes.
So by appearing to take action, Madigan is keeping GOP assaults at bay while throwing a bone to his party base, including labor. Whether that’s a sustainable way to fend off constant assaults to his dual roles of power remains to be seen.
The House held a committee hearing on Madigan’s proposal yesterday in Chicago.
* Mark Brown also makes a good point…
So why do this now?
Because Pritzker made clear his support for a graduated income tax during this year’s Democratic primary, and Rauner, who opposes the change, has shown he plans to make his opposition a central element of his re-election campaign. […]
One way or the other, it sure looks as if Democrats decided they’d be better off playing offense on this issue than defense.
Pritzker supports it, so why shy away now? Might as well embrace it. Will it work? Well, that’s why we have elections. Let’s get this settled one way or the other.
* And check out this Tribune headline and lede…
Illinois Republicans blast Democratic income tax resolution as election-year politics
Lawmakers on Wednesday sparred over a proposal to change the state’s tax structure, with Democrats expressing support for taxing higher earners more than low-income taxpayers while Republicans decried the idea as an attempt at “class warfare” to score political points ahead of the November election.
So, for all their bluster, the Republicans know they have at least some vulnerablity on this, too.
- Montrose - Thursday, May 3, 18 @ 10:32 am:
Madigan has played this game over and over. Provide some meaningless vehicle for his members, be it the graduated income tax or the millionaire’s tax, but not being willing to put for a bill that would actually do something. Madigan has never wanted his members to vote to put it on the ballot.
I don’t understand the calculation that the Pritzker campaign is making. If they think that a graduated tax is such a winning issue (which polling seems to show), wouldn’t you want it on the ballot when you are up for election? It appears to me that Madigan is still calling the shots regardless of how much money Pritzker is will to put up.
- Just Me - Thursday, May 3, 18 @ 10:34 am:
Heaven forbid we actually spend time fixing real problems, instead we have to waste time with something that can’t happen.
How about a hearing to talk about the state’s poor economic climate and find ways to fix it? It might be hard to believe but that is what the voters really want these clowns to focus on.
- Anonymous - Thursday, May 3, 18 @ 10:40 am:
=wouldn’t you want to put it on the ballot when you are up for election?=
Don’t want to stick your neck out too far, ya know? Taking a stand on something is a dangerous thing.
- Juice - Thursday, May 3, 18 @ 10:43 am:
Montrose, if I’m Pritzker, I would want it on the ballot in 2020, because (a) it’s more likely to pass in a higher turnout presidential year and (b) then he can claim it as an accomplishment as Governor (if he wins) and if it were to pass.
- anon2 - Thursday, May 3, 18 @ 10:44 am:
=== it’s class warfare say the Republicans ===
If anything is class warfare, it’s the highly regressive state and local tax system in Illinois, which ranks as one of the most regressive in the nation. Unfortunately, class warfare against the poor isn’t what motivates the GOP.
- Lester Holt’s Mustache - Thursday, May 3, 18 @ 10:47 am:
==, wouldn’t you want it on the ballot when you are up for election==
Not necessarily, because the details haven’t been ironed out. As Bruce showed in 2014, a generality is easier to sell during a campaign than getting bogged down in details. Did Rauner try that hard to explain what “turn around agenda” actually meant? No, he kept it to three or four talking points. Save the actual amendment for when you have the bully pulpit to promote it with numbers, which is 2020. Also dem voter turnout is usually higher during a presidential year, making passage more likely.
- Grandson of Man - Thursday, May 3, 18 @ 10:48 am:
For a nothing resolution it sure freaked out the phony anti-graduated tax victims, like Rauner and the IPI, who are among Illinois’ most privileged/wealthy residents.
- Reality Check - Thursday, May 3, 18 @ 10:50 am:
Montrose and Anon 10:40, how do you propose Pritzker puts it on the ballot now? Doing so requires supermajority support in both chambers. The votes are there in the Senate but not the House.
Pritzker’s gambit appears to be building that support for the future by winning an election on the issue now.
- Lester Holt’s Mustache - Thursday, May 3, 18 @ 10:51 am:
==Unfortunately, class warfare against the poor isn’t what motivates the GOP.==
It’s not? Sure seems that way to the rest of us.
- Streamwood Retiree - Thursday, May 3, 18 @ 10:57 am:
On the contrary, Anon2. Class warfare against the poor is exactly what motivates the GOP. Got to keep the lowers in their place.
- wordslinger - Thursday, May 3, 18 @ 10:57 am:
– class warfare –
Apparently, the majority of states, the United States, and most of the countries on Planet Earth are engaged in class warfare with their graduated income taxes.
- Honeybear - Thursday, May 3, 18 @ 11:01 am:
No war but class war
- Montrose - Thursday, May 3, 18 @ 11:04 am:
“Montrose, if I’m Pritzker, I would want it on the ballot in 2020, because (a) it’s more likely to pass in a higher turnout presidential year and (b) then he can claim it as an accomplishment as Governor (if he wins) and if it were to pass.”
I agree on both points. It is just that he has a lot of promises that require cash, so waiting until 2020 to get it seems a bit off. And his proposal for a clunky graduated income tax in the interim isn’t fully baked.
As to how to get it done without the super majority, I know it isn’t there, but part of the reason (not all) is, again, Madigan not really wanting it in the first place. Had he really wanted it to go, he could get much of his caucus in line.
I am not saying it is all on him. He can’t snap his fingers and make it happen, but he can send some pretty strong signals he does or doesn’t want it done. He did the latter.
- Grandson of Man - Thursday, May 3, 18 @ 11:25 am:
Tax unfairness is a chronic and destructive problem in Illinois. At some point it needs to be corrected. Pritzker is someone who has the resources to help change things. No one should think it’s going to be easy. But if the plan has a tax cut for 90%+ of taxpayers, then combined with Pritzker’s and others’ resources, it should be a powerful political issue.
Thankfully nobody uses a progressive income tax to hold the entire state hostage.
But, Bruce getting hysterical and not wanting to pay the copper off of a penny more in state income tax justifies state workers for holding their ground and not giving in to his horrible contract terms.
- BlueDogDem - Thursday, May 3, 18 @ 11:27 am:
Both Repubs and Dems., particularly Dems ,have been engaged in a war on Illinois’ working poor and middle classes for decades.
- wondering - Thursday, May 3, 18 @ 11:28 am:
Should you announce your agenda before an election or wait until after the election and spring a surprise? The choice in November is between pro and anti progressive income tax candidates. Anti people dont like that.
- 44th - Thursday, May 3, 18 @ 11:40 am:
Such nonsense. Middle class always has and always will (until driven out of Illinois) pay for everything. Enough of this “progressive” tax BS. All of those Richies already have homes in Florida, etc. All they have to do is spend 6 months and a day, and guess what? They are free from our legislature. Even if you imprisoned them, took all of their $$ it still wouldn’t be enough. So until we deal with spending this is all just a poliitcal game.
- wondering - Thursday, May 3, 18 @ 11:50 am:
In which case, 44th, they would not be eligible to vote in Illinois elections. All the better reason to have a progressive income tax.
- wondering - Thursday, May 3, 18 @ 11:55 am:
Those that cry “class warfare” betray their attitudes toward the rest of us. “Only the little people pay taxes”
- Chris Widger - Thursday, May 3, 18 @ 11:56 am:
==Not necessarily, because the details haven’t been ironed out. As Bruce showed in 2014, a generality is easier to sell during a campaign than getting bogged down in details.==
Speaking of bogged down in details, I believe it’s more of a Madigan tactic to put non-binding referenda on the ballot. We had a chance to try to pass a millionaire’s tax after the 2014 election–the will of the people on the ballot demanded it–and we didn’t, because we willingly elect cowards.
- City Zen - Thursday, May 3, 18 @ 11:59 am:
==Apparently, the majority of states, the United States, and most of the countries on Planet Earth are engaged in class warfare with their graduated income taxes.==
What is Planet Earth’s stance on taxing retirement income? Or are they too engaged in generational warfare?
- Last Bull Moose - Thursday, May 3, 18 @ 12:15 pm:
Mixing a tax increase with tax reform is asking for failure. Take two bites. First pass a tax increase to pay pensions, Medicaid, and other government functions. Then propose a graduated tax with revenues all going to education. This will permit property taxes to go down.
- Da Big Bad Wolf - Thursday, May 3, 18 @ 12:15 pm:
==Such nonsense. Middle class always has and always will (until driven out of Illinois) pay for everything.==
Well, then we need policies that move more people into the middle class.
- JS Mill - Thursday, May 3, 18 @ 12:21 pm:
Rudy Guliani just said $130,000 is a little more than pocket change for the uber wealthy. How exactly are those that benefit most from society harmed by a progressive income tax? It has no effect on their spending. Leaving more money for the middle class and those with lower incomes puts money right back into the economy.
- Sue - Thursday, May 3, 18 @ 12:30 pm:
Might be a good campaign issue. Doubtful it ever gets enacted
- Da Big Bad Wolf - Thursday, May 3, 18 @ 12:31 pm:
Agree JS Mill. Also people who get a tax break under a graduated tax plan will spend it, on an extra haircut, a new suit for a job interview, more food, etc. The companies supplying the hair cut, the new suit, the food, will see increased profits. Multiply that by millions.
- Da Big Bad Wolf - Thursday, May 3, 18 @ 12:36 pm:
Some of the richest people who are also workers are doctors. When the State of Illinois doesn’t pay them for services rendered, how is that not already a kind of tax? Talk about class warfare. How about paying medical providers what they are owed when they are owed.
- City Zen - Thursday, May 3, 18 @ 12:38 pm:
==The companies supplying the hair cut, the new suit, the food, will see increased profits.==
Should I make a reservation at Supercuts now or wait until after the tax is passed?
- Ron - Thursday, May 3, 18 @ 12:53 pm:
Mr. Madigan, illinois currently has the 5th highest state and local tax burden in the nation and have not had a balanced budget in decades. Just how high do you want the total tax burden to be?
- Rabid - Thursday, May 3, 18 @ 1:20 pm:
Mike is OODA looping team Rauner into swatting bugs that isn’t there
- George - Thursday, May 3, 18 @ 1:21 pm:
“Mr. Madigan, illinois currently has the 5th highest state and local tax burden in the nation and have not had a balanced budget in decades. Just how high do you want the total tax burden to be?”
You didn’t do very well in math class, did you, Ron.
- Sue - Thursday, May 3, 18 @ 1:25 pm:
For those of you who don’t think Businesses don’t make decisions with taxes in mind -Amazon today halted construction of a new office building mid-stream in Seattle intended to House 7000 new employees because Seattle just implemented a 500 dollar head tax on larger employers. The 7000 employees are gong to be located elsewhere. Yea Mike and JB- go ahead and raise taxes and see what happens
- wordslinger - Thursday, May 3, 18 @ 1:34 pm:
–For those of you who don’t think Businesses don’t make decisions with taxes in mind–
Any other reasons, you think? Why is Illinois perennially at the top of the list in new business projects, both in real numbers and on a per-capita basis.
Maybe Katrina can put out a call for anecdotes on that.
https://siteselection.com/issues/2018/mar/cover.cfm
- Sue - Thursday, May 3, 18 @ 1:37 pm:
Word- I guess that is why Illinois was the top State for outward migration losing more taxpaying citizens then any other State and we keg in real estate valuations since the recovery started. You just refuse to accept reality. Care to make a wager whether Amazon picks Chicago?
- Montrose - Thursday, May 3, 18 @ 1:57 pm:
“Care to make a wager whether Amazon picks Chicago?”
You ask that as though Amazon not choosing Chicago would prove that they made their decision based on taxes.
- Anonymous - Thursday, May 3, 18 @ 2:22 pm:
$130,000 may be chump change to the wealthy, but $230,000 per year must be gut wrenching. I know some folks who will go to great lengths to avoid that hit.
- Lester Holt’s Mustache - Thursday, May 3, 18 @ 2:24 pm:
==Yea Mike and JB- go ahead and raise taxes and see what happens==
Yes politicians of all stripes should definitely all run on a platform of appeasing the wishes of very popular giant corporations like Amazon. That’s a true strategy for electoral success in Illinois.
- Juice - Thursday, May 3, 18 @ 2:24 pm:
Sue, the building hasn’t even broken ground yet.
They haven’t made a final decision on those 7000 new employees yet, but Amazon has long feared that a lot of Seattle’s problems are being blamed on them, so the negative reaction to a tax where they would be by far the largest payer of that tax isn’t all that much of a surprise.
And a lot of people on the left think a head tax is bad public policy.
- Da Big Bad Wolf - Thursday, May 3, 18 @ 2:27 pm:
==Should I make a reservation at Supercuts now or wait until after the tax is passed?==
Make it now. Chances are, your hair will be down to your knees before graduated income tax is passed, if ever.
- Sue - Thursday, May 3, 18 @ 2:29 pm:
Accodiny to NYT today. Building was half constructed. Look at page 1 business section
- anon2 - Thursday, May 3, 18 @ 2:41 pm:
== Unfortunately, class warfare against the poor isn’t what motivates the GOP.==
My bad. What I meant to say is that regressive taxation does not elicit GOP opposition the way progressive taxation does, even though Illinois has a very regressive tax system, and a graduated income tax would make it a little less so.
- Juice - Thursday, May 3, 18 @ 2:43 pm:
Sue, there are two projects underway. One is the building that is half constructed by a developer. Amazon has a lease for that building, which they have said that they may sublease instead depending on how things play out. But construction on the building is continuing
The other project is Block 18, which Amazon themselves were building. That is the project where progress has been halted for the time being. Construction on that has not yet started.
- Silicon Prairie - Thursday, May 3, 18 @ 2:44 pm:
Certainly part of the Amazon H2Q decision is taxes. Bezos is from Texas (No tax ), company is in Seattle (No tax ). We are pro union, high property tax, billions is debt, broke, high worker comp costs AND dont want to change anything.I would be shocked if Amazon picked Chicago. JB’s policies (including support for rent control ) dont really fit the Amazon model. We have some advantages: work force, airport, metra,subway, diversity, open land near downtown, but at least 10 others cities have that as well
- Da Big Bad Wolf - Thursday, May 3, 18 @ 3:52 pm:
And yet Bezos moved to a home in Washington DC, a town with income tax, sales tax and property tax. Go figure.
- Juice - Thursday, May 3, 18 @ 4:07 pm:
Washington (Most regressive tax structure), Texas (third most regressive tax structure), Illinois (Fifth most regressive tax structure). Hey, I think we fit right in. /s
But on a more serious note, Amazon’s property tax bill would be reduced by the incentives that they’re being offered. We’re talking office and tech jobs. Those don’t come with high workers comp costs. The warehouse jobs potentially do, but that hasn’t held Amazon back here. And on the pro-union front, so is DC and Maryland. Or Boston, NY/NJ. Or LA. Or Columbus. Or Toronto.
Not saying that Chicago makes the cut, but those aren’t going to be the issues that keeps the city out of the running.
- Steve - Thursday, May 3, 18 @ 4:08 pm:
What’s interesting is, what percentage of the state income taxes do proponents of progressive taxation think the upper 1% should pay?
- Demoralized - Thursday, May 3, 18 @ 4:10 pm:
==Care to make a wager whether Amazon picks Chicago?==
Amazon isn’t going to pick Chicago and it’s going to have nothing to do with taxes.
- Taxed out West - Thursday, May 3, 18 @ 4:11 pm:
No one wants to mention the ramifications this ridiculous tax will do the Subchapter S Corps of which most business file taxes under. AND of course organized labor wants this…why NOT change the Constiution in IL to raise taxes on businesses of which they hate all the while not changing the Constiution to not allow them to retire in their 50’s all the while those same taxpayers creating the jobs pay for for their 3% COLA’’s and eternal health care. JOKE. Who runs this state?
- Rich Miller - Thursday, May 3, 18 @ 4:19 pm:
===No one wants to mention the ramifications===
Read Crain’s this weekend.
- Sue - Thursday, May 3, 18 @ 4:37 pm:
Wolf- Bezos owning a house in DC isn’t the same as having his residence in DC
- supplied_demand - Thursday, May 3, 18 @ 4:46 pm:
==Some of the richest people who are also workers are doctors. When the State of Illinois doesn’t pay them for services rendered, how is that not already a kind of tax?==
How can they have such high income if they aren’t being paid? This is an illogical argument as the progressive rates are based on your income. If you don’t get paid, your income goes down and you pay a lower rate.
- Streamwood Retiree - Thursday, May 3, 18 @ 5:10 pm:
“Seattle just implemented a 500 dollar head tax on larger employers.” $500 a year? a month? a day?
If it’s annual that’s about 25 cents per work hour. Is Amazo0n cheaper than Wal-Mart? If it’s monthly, then it costs $3 an hour and yes, that’s steep. A quarter is peanuts.
- Da Big Bad Wolf - Thursday, May 3, 18 @ 5:14 pm:
I’m assuming only some of the doctor’s patients are state workers or Medicaid patients and the majority are private pay. Hence the doctor would still have a high income.
- Anonymous - Thursday, May 3, 18 @ 6:17 pm:
I’ve heard this discussion for so many years that now figure myself and many others will be never live long enough to get past discussions on pro and con. Move on…discuss something that can be done within 5 years or less.
- Whatever - Friday, May 4, 18 @ 9:11 am:
Silicon Prairie @ 2:44 ==company is in Seattle (No tax ).==
Washington imposes a gross receipts tax on businesses rather than an income tax. When Blago proposed a gross receipts tax, it was estimated it would raise $12 billion. Would you rather have that than a graduated income tax? If not, thank Mike Madigan for killing the tax despite Blago and Emile Jones being 100% for it.