Graduated tax starts to move
Tuesday, Apr 9, 2019 - Posted by Rich Miller
* Press release…
Governor JB Pritzker and leading members of the General Assembly announced a major step forward for the fair income tax, as lawmakers introduced language to amend the state’s Constitution, which currently requires that all taxpayers pay the same rate, regardless of their income. Governor Pritzker’s proposed fair income tax would address the state’s multi-billion-dollar budget deficit by raising taxes only on those making more than $250,000, who represent only 3% of taxpayers.
“Working with the General Assembly, my administration is taking an important next step to change our tax system to be more fair to the middle class,” said Governor JB Pritzker. “The action we’re taking today means we are one step closer to giving voters a choice about whether the wealthy will pay more and 97% of families will pay the same or less. I’ve said from the beginning that it doesn’t make sense that I pay the same rate as a teacher or first responder, and today brings us closer making Illinois’ tax system fair.”
The amendment would revise the state’s Constitution as follows:
Current
A tax on or measured by income shall be at a non-graduated rate. At any one time there may be no more than one such tax imposed by the State for State purposes on individuals and one such tax so imposed on corporations. In any such tax imposed upon corporations the rate shall not exceed the rate imposed on individuals by more than a ratio of 8 to 5.
Proposed
The General Assembly shall provide by law for the rate or rates of any tax on or measured by income imposed by the state. In any such tax imposed upon corporations the highest rate shall not exceed the highest rate imposed on individuals by more than a ratio of 8 to 5.
As the constitutional amendment moves forward, Governor Pritzker’s administration is simultaneously continuing negotiations with the General Assembly over the tax rates, which would ensure that only those making more than $250,000 a year – only 3% of residents – would pay more in taxes. Additionally, the governor has proposed increasing the property tax credit by 20% and creating a child tax credit targeted to working families.
The administration expects that rates will be finalized with lawmakers this legislative session so that Illinoisans can understand how the rates would affect their family before voting on the constitutional amendment. More information is available at www.illinois.gov/FairTaxCalculator.
SJRCA1 Amendment 1 is here.
The plan is to move the proposal forward this week and vote on it in the Senate when they return from spring break.
…Adding… Response…
“Today is the first step by Springfield politicians to hand themselves a blank check with middle class families’ hard earned money,” said Greg Baise, chairman of the anti-graduated tax dark money group Ideas Illinois. “With zero transparency and zero accountability, JB Pritzker and Speaker Madigan are preparing to stick taxpayers with a massive Jobs Tax that will hurt job creators in our state. At the very least, the politicians who are set to support yet another massive tax hike should do the right thing and release their full tax returns so voters have a clear picture.”
* And…
Think Big Illinois Executive Director Quentin Fulks released the following statement on the newly announced language for the fair tax constitutional amendment:
“It’s time for Illinois to have a tax system that works for everyone, not just the wealthy few, and Think Big Illinois applauds the amendment language proposed by Governor Pritzker and Democrats in the legislature today. A fair tax will help address Illinois’ $3.2 billion budget crisis and put our state on the path toward fiscal sustainability, all while lifting the burden off middle and working-class families who are disproportionately hurt under our current unfair tax system.
“This amendment language is an important step toward ensuring Illinois voters have the opportunity to make their voices heard on this critical issue and decide if they want the wealthiest Illinoisans to finally pay their share.
“Think Big Illinois remains committed to being a staunch ally for our working families as we implement a fair tax in our state.”
- Anon - Tuesday, Apr 9, 19 @ 3:08 pm:
Will there be a limit on how high the individual rate can be for each of the “grades”?
“the highest rate shall not exceed the lowest rate imposed by a ratio of X to Y”
- PublicServant - Tuesday, Apr 9, 19 @ 3:16 pm:
Very pleased with the language. Keep it simple to allow the greatest flexibility by the legislature in setting rates. Hammer the fair tax 97% message, and don’t give the opposition’s FUD junkies an ounce of oxygen to propagate theirs.
- Anon - Tuesday, Apr 9, 19 @ 3:28 pm:
Property tax credit and child credit increase while shorting the pension funds to the tune of almost a billion a year.
Anyone who thinks they won’t be coming for folks under 250k in the near future is kidding themselves.
Everywhere we turn there is a new spending proposal while finding out simultaneously that more pension funding is kicked down the road.
This tax increase will be like all the others at the state/local level in that each will be back hat in hand saying the previous increase wasn’t nearly enough and they need more, all the while spending all new revenue on everything but paying down the pensions and making them better funded long term.
It is sad what jb is doing.
- NeverPoliticallyCorrect - Tuesday, Apr 9, 19 @ 3:31 pm:
Funny how we used to think that being fair meant treating everyone the same (equally). But now we’re told that fair means treating people differently (not equally). It obvious that the word fair is being twisted into a meaning desired by the Dems. But they won so I guess that means they get to twist language. Clarification, I am not opposed to a graduated tax but please let’s not play games about how this is more fair.
- Perrid - Tuesday, Apr 9, 19 @ 3:31 pm:
Anon, the language is right there in front of you. Until and unless there is a change, no, there are no limits or rules around it, except they are keeping the corporate ratio at 8:5. Which would be interesting if there was a graduated income; would the corporate tax be 8/5 of the bottom rate or the top rate?
- Anonymous - Tuesday, Apr 9, 19 @ 3:32 pm:
I really get a kick out of the opposition saying “it will go up for everyone eventually.”
Well guess what, if the progressive structure doesn’t happen, the flat rate will go up for everybody. So the real question is, under which system are the lower 97% better off?
- Blue Dog Dem - Tuesday, Apr 9, 19 @ 3:34 pm:
We need a progressive income tax. ASAP.but i will not vote for it til ya show me some spending cuts or reallocation.
- jim - Tuesday, Apr 9, 19 @ 3:39 pm:
there will be no cuts or re-allocations — JB wants to double-down on the status quo approach to spending — that means continuing to spend more than the state takes in, no matter how much it takes in.
- thoughts matter - Tuesday, Apr 9, 19 @ 3:40 pm:
So the current Constitution language does not list the actual tax rate but people are freaked out that the proposed language doesn’t list it either?
Blue Dog - do you have suggestions for where to cut or where to re-allocate? I do not. I have to rely on the people that are knowledgeable about the topic. Please let us know what you think should change. I’m not being sarcastic - I really do want to know your suggestions.
- Anonymous - Tuesday, Apr 9, 19 @ 3:44 pm:
oh the heck with it…raise the flat tax to 29% with a $100,000 exemption. Fixed for you 1.4 folks?
- thoughts matter - Tuesday, Apr 9, 19 @ 3:44 pm:
==Funny how we used to think that being fair meant treating everyone the same (equally). But now we’re told that fair means treating people differently (not equally).==
When my children would argue that it wasn’t fair that they weren’t treated the same, my answer was: fair does not mean treating you exactly the same. It mean treating you in accordance to your abilities,weaknesses, maturity level. Fair means what is best for you isn’t the same as what is best for the next person.
- Blue Dog Dem - Tuesday, Apr 9, 19 @ 3:50 pm:
Thoughts. I have shared repeatedly. But my first move would be to reallocate LGDF into the general fund. I know it would be unpopular, but i say pain has to be statewide. The argument always comes back that locals would only raise property taxes. I say to that. Maybe. Maybe not.
- SSL - Tuesday, Apr 9, 19 @ 3:52 pm:
I don’t know why there isn’t more angst about the lack of real progressive rates in JB’s plan. It’s a complete joke that those households making 250,000 will pay 7.75% on income above that amount, while households earning $1MM will pay 7.95% on their income. A whole 20 basis points more. This is JB protecting himself and all the other Pritzker family members. The top rate should be at least 10% on amounts in excess of $1MM. Come on JB, do what you said you were going to do. Make those like yourself and Rauner pay their fair share.
- Annonin' - Tuesday, Apr 9, 19 @ 3:53 pm:
It is hard to watch poor Durkie stand there and defend the Rauner Rates after GovJunk dumped the Poison Plant on him and his constituents.
- Nick Name - Tuesday, Apr 9, 19 @ 3:55 pm:
That’s quite the word salad from Baise.
===“Today is the first step by Springfield politicians to hand themselves a blank check with middle class families’ hard earned money,” said Greg Baise===
Same old, same old. Under the proposed rates, three percent of the population will see an increase. Everyone else stays the same or goes down.
===“With zero transparency===
The text of the proposed amendment is online. When the rates are finalized in a bill, they’ll be online too. Proposed rates have been online for months.
===and zero accountability===
The people will get to vote on the proposed amendment in 2020. Also, every two years, there are these things called elections.
===JB Pritzker and Speaker Madigan are preparing to stick taxpayers with a massive Jobs Tax that will hurt job creators in our state===
It’s called an income tax. But thinks for the Orwellian term “jobs tax.” And it’s consumers who are job creators, not business owners.
===At the very least, the politicians who are set to support yet another massive tax hike should do the right thing and release their full tax returns so voters have a clear picture.”===
Pritzker, Madigan, and every member of the GA has the same state income tax rate as you do: 4.95%. If you hate these men simply for being rich, wouldn’t you like to see them pay more in taxes? But here you are working so hard to get middle class folks to vote against their own best interests.
Second, I’ll take you seriously about politicians releasing their tax returns when you start lobbying for Pres. Trump to release his tax returns. But thanks for the double standard.
- Anon62704 - Tuesday, Apr 9, 19 @ 3:58 pm:
=Funny how we used to think that being fair meant treating everyone the same (equally). But now we’re told that fair means treating people differently (not equally). It obvious that the word fair is being twisted into a meaning desired by the Dems.=
Don’t think it’s much of a twist to interpret “fair” as “equitable”.
- Shytown - Tuesday, Apr 9, 19 @ 4:00 pm:
The Right is in overdrive on this, but they’re on the wrong side of history here, just like they were when they doubled down on Rauner.
- Anonymous - Tuesday, Apr 9, 19 @ 4:05 pm:
one more time of hearing “hard working” and I will be ill.
- Fixer - Tuesday, Apr 9, 19 @ 4:09 pm:
Good to see this moving finally. The intellectual dishonesty coming from Greg on this is astounding. I get you like having the money coming in for your group, but stop with the “we’re watching out for the little guy” shtick. The little guy’s are tired of doing all the heavy lifting.
- Fixer - Tuesday, Apr 9, 19 @ 4:11 pm:
Also, I thought ILGOP was opposed to folks having to release their tax returns in order to be an elected official. I assume given the resposnse, Greg and Co will be on board with the bill for folks to have to release tax returns to be on the presidential ballot, right?
- Uncle Ernie - Tuesday, Apr 9, 19 @ 4:13 pm:
Someone answer this for me, will the new rate apply to the dollars made over $250,000 only, the first $250 taxed at the lower rate, or will it be on all dollars made if the total is over $250,000?
- City Zen - Tuesday, Apr 9, 19 @ 4:15 pm:
What’s with the obsession with the 8 to 5 ratio?
- wondering - Tuesday, Apr 9, 19 @ 4:16 pm:
anny 344 and anny 405 was me…cant be duplicitous…missed this blog too much…forgive me Father Rich, I have sinned, and will subscribe.
- City Zen - Tuesday, Apr 9, 19 @ 4:17 pm:
“all while lifting the burden off middle and working-class families who are disproportionately hurt under our current unfair tax system.”
So we’re taxing retirement income now? /s
- Liberal - Tuesday, Apr 9, 19 @ 4:18 pm:
I would sure go a long way to somehow earmark some of the new revenue for state debt over and above the required payments.
- Steve - Tuesday, Apr 9, 19 @ 4:31 pm:
The GOP is hoping for those Burke related federal indictments before the vote in the legislature. The revulsion of Illinois politics might scare a few people away from handing more money to the Illinois state legislature.
- Grandson of Man - Tuesday, Apr 9, 19 @ 4:34 pm:
The organizations and people who fund the opposition to a graduated tax are among the same people who down the state while having boom economic times. It’s a distraction tactic in part, to divert attention away from how well the likes of Rauner, Ricketts and Griffin are doing. The incomes of the wealthy in Illinois have grown much larger over the last three decades, compared with median incomes, yet some who’ve prospered most push the narrative of how bad Illinois is.
- Jeff - Tuesday, Apr 9, 19 @ 4:43 pm:
Who Pays More?
$50,000 x 4.95% = $2,475.00
$250,000 x 4.95% = $12,375.00
$1,000,000 x 4.95% = $49,500.00
I’m sure the rich take their extra money and keep it out of the economy and hoard it. They don’t buy cars, houses, services, boats and they certainly don’t want to try investing in new businesses. Interested to know what you think the rich do with their money.
- Steve - Tuesday, Apr 9, 19 @ 4:48 pm:
- Grandson of Man -
There will be many distraction tactics to be used. The GOP is planning on 2019 to be the year of Illinois political federal indictments concerning the Democratic party in Illinois. They are hoping for a change in political opinion. The GOP will attempt tie Chicago politics (Solis , Burke, and others?) to the Illinois state legislature and taxation. Whether the public falls for it is another thing.
- Grandson of Man - Tuesday, Apr 9, 19 @ 4:48 pm:
“I’m sure the rich take their extra money and keep it out of the economy and hoard it. They don’t buy cars, houses, services, boats and they certainly don’t want to try investing in new businesses.”
The rich have done much better in Illinois than everyone else but are taxed at the same rate as everyone. Should we bring an imaginary tissue for the phony tears?
- Grandson of Man - Tuesday, Apr 9, 19 @ 4:50 pm:
“The GOP is planning on 2019 to be the year of Illinois political federal indictments concerning the Democratic party in Illinois.”
Of course they are. Republicans gonna Republican—anything but governing, and anything to protect the rich from paying their fair share.
- Grand Avenue - Tuesday, Apr 9, 19 @ 4:53 pm:
It might be better not to even sell it as a tax cut at the lower end, because some people won’t believe it or think it’s a gimmick.
The best approach is to level with people: the State needs more revenue (blame Blagojevich & Rauner if you want), and the question is who is going to have to pay more, those who can afford it or those who can’t.
- wondering - Tuesday, Apr 9, 19 @ 4:54 pm:
City Zen….I have worked 58 years and retirees have not paid income tax.. Now you tell me in the interest of equitiy I should? Do you understand genereation to generation equity?
- Steve - Tuesday, Apr 9, 19 @ 4:57 pm:
IL GOP 2019: What we couldn’t achieve through electoral politics, in Illinois, we are hoping to achieve by federal indictments.
- wondering - Tuesday, Apr 9, 19 @ 5:10 pm:
blue dog is about to turn blue til he get’s his way: accounting per St Blue, darn the consequnces. Hold your breathe
and do me a favor
- Nonbeleiver - Tuesday, Apr 9, 19 @ 5:12 pm:
The General Assembly shall provide by law for the rate or rates of any tax on or measured by income imposed by the state. In any such tax imposed upon corporations the highest rate shall not exceed the highest rate imposed on individuals by more than a ratio of 8 to 5.
A blank check for the GA and Governor on individual income taxes.
Pretty much what I predicted but was hoping for better.
Just tweak it around on a constant basis to target who you want and claim that it will never affect the average citizen and it is a must for the state.
As I said earlier T”he camel’s nose in the tent.”
- Anonymous - Tuesday, Apr 9, 19 @ 5:14 pm:
City. Sure. When the retiree (who needs the extra cash now that he has to pay more since he hadn’t planned on having some taken away when he retires) gets priority and can bump you out of your job, sure. Seniority counts.
- Anonymous - Tuesday, Apr 9, 19 @ 5:16 pm:
Nonbeliever - how is the proposed language more of a blank check than the current language?
- wondering - Tuesday, Apr 9, 19 @ 5:20 pm:
Pure and simple… the ulta wealthy are hiding behind the poor with the flat tax.
- Nonbeleiver - Tuesday, Apr 9, 19 @ 5:21 pm:
@Anon,
That should be rather obvious to anyone. Think about it for more than a NY nanosecond. If you still can’t figure it out I will respond more specifically. I will check back in 15- 20 minutes.
HINT. Read the Gov’s proposal and think about its implications compared to the old language.
- Michelle Flaherty - Tuesday, Apr 9, 19 @ 5:23 pm:
It’s funny how Baise has changed from being the head cheerleader for his boss’ tax hike in 1983. I mean there was a very long era of Illinois history in which Baise didn’t meet a tax increase he didn’t like.
- RNUG - Tuesday, Apr 9, 19 @ 5:24 pm:
== Someone answer this for me, will the new rate apply to the dollars made over $250,000 only, the first $250 taxed at the lower rate, or will it be on all dollars made if the total is over $250,000? ==
Until an actual rate bill is introduced, all we have to go by is JB’s presentation.
- Whatever - Tuesday, Apr 9, 19 @ 5:50 pm:
Nonbeleiver, we’re waiting . . .
- Tim - Tuesday, Apr 9, 19 @ 6:02 pm:
Unless and until someone shows me spending reductions my vote on this is no, and will remain to be no even though my family might come out a little better under this. Our new governor, Mr. Blutarsky, is already spending money he diesn’t Have yet, and there is no guarantee that this pile of money will go to fund pensions or past due state bills. Until state spending is really examined by an independent party with a fine tooth comb, and actual real reductions are made to bring spending in line with revenues, my answer is no.
- Tim - Tuesday, Apr 9, 19 @ 6:03 pm:
Doesn’t have yet.
- wondering - Tuesday, Apr 9, 19 @ 6:12 pm:
tim joins the blue dog breath holders
- Nonbeleiver - Tuesday, Apr 9, 19 @ 6:12 pm:
Looks like this simple analysis is hard to figure out for some people.
The present language confirms 8-5 ratio. New language- it could be anything.
Present language auto fixes inflation and marriage penalty factor. New language does not allow for that and thus is far more ‘flexible’ in how it can raise income and on whom.
As Bull Moose stated “One reason tax increases have been hard to pass is that the increase hit all taxpayers. The progressive income tax allows politicians to concentrate the burden on a few. The few will not be able to stop tax increases.
Tying the upper rate to the lowest rate, for example 3 percentage points higher than the lowest rate, makes increasing the rates in the future more difficult.”
Want to target a specific group of income earners. Easy under the Gov. proposal- not under the present language.
That is a start. Of course, for those who do not pay much in state income tax what I say flies over their head because it does no affect them and they believe it never will.
- Nonbeleiver - Tuesday, Apr 9, 19 @ 6:14 pm:
City Zen - Tuesday, Apr 9, 19 @ 4:17 pm:
“all while lifting the burden off middle and working-class families who are disproportionately hurt under our current unfair tax system.”
So we’re taxing retirement income now? /s”
The Gov’s proposal does not seem to be advocating that- at least yet.
- Sue - Tuesday, Apr 9, 19 @ 6:17 pm:
Grandson of Man- you really seem to enjoy the soak the rich approach. Guess what the 3 percent are the ones who afford job opportunities in the private sector for the 97 percent. You should show a little more appreciation. Of course in the public sector no one ever thinks of that
- Tim - Tuesday, Apr 9, 19 @ 6:20 pm:
Wondering - Yep. I see no reason to flush more money into state services that I don’t use anymore than someone that might make less money but use the same services I do. Until someone can prove that the budgets coming out of there are actually balanced and we don’t spend more than we take in, I am not interested in increasing the amount I waste in payments to a corrupt and inefficient government.
- Anonymous - Tuesday, Apr 9, 19 @ 6:37 pm:
Not sure they can do it but unless they can guarantee the rates will not go up a minimum of five years I’m voting no
- Grandson of Man - Tuesday, Apr 9, 19 @ 7:35 pm:
“Guess what the 3 percent are the ones who afford job opportunities in the private sector for the 97 percent.”
Consumer spending is the main driver of job opportunities, not some over-inflated sense of self-worth by super-rich anti-tax, anti-union organizations and individuals (boy, talk about privilege). Consumers are the primary job creators, not super-rich right wingers, who not being satisfied with what they have, want to benefit even more by crippling or killing their political opposition.
- blue dog dem - Tuesday, Apr 9, 19 @ 7:36 pm:
Wondering loves taxes and govt sppending. Thaats his right.
- JS Mill - Tuesday, Apr 9, 19 @ 7:46 pm:
@GoM - well stated, the myth being perpetuated that some how the top 3% are responsible for everyone else having a job is totally unsure and not supported by any data.
- Person 8 - Tuesday, Apr 9, 19 @ 7:56 pm:
===Guess what the 3 percent are the ones who afford job opportunities in the private sector for the 97 percent. ====
How many jobs did 3%er Rauner aka “Wolf of Winnetka” create for our state…
https://capitolfax.com/wp-mobile.php?p=22955&more=1
- Anon - Tuesday, Apr 9, 19 @ 8:01 pm:
Once this goes into effect it won’t be long before we are facing the problem NY and Conn are where the high income voters paying a disproportionate amount of the tax burden start leaving, blowing an even larger hole in the budget.
At the proposed rates we will become something like 2nd or 3rd highest tax burden in the country (state/local/sales), and we all know these rates are only the appetizer to the real ones to come in a few years.
Do people really believe we will be able to impose a California type tax burden with midwest weather?
Our property and sales tax burden is already among the highest in the country, and now having a top rate that increases significantly (coupled with the new federal Salt limits) makes this state a toxic stew going forward for high earners who have other options.
- City Zen - Tuesday, Apr 9, 19 @ 8:05 pm:
City Zen….I have worked 58 years and retirees have not paid income tax
Hold up…you didn’t pay state income taxes for 10 years? And only 2.5% for 13 years? I never got that deal.
Tell you what, in the spirit of “generation to generation equity”, I’ll take 13 years of that rate 2.5% now, then zero for 10 years thereafter. Fair is fair.
- Johnnie F. - Tuesday, Apr 9, 19 @ 8:50 pm:
So the proposed language allows for a flat tax rate or a progressive tax rate depending on the legislature. Should have bipartisan support…no?
- Real - Tuesday, Apr 9, 19 @ 10:44 pm:
The tax rate for incomes $10,000 to $70,000 needs to be 3.25%
$75,000 to $250,000 should be 4.95%
$250,000 to 1 million should be 7.95%
Over 1 million should be 9.75%
That’s a real progressive tax plan.
- Generic Drone - Tuesday, Apr 9, 19 @ 11:52 pm:
Sue. We have shown appreciation for employers in the form of tax advantages. Now its over.
- Blue Dog Dem - Wednesday, Apr 10, 19 @ 6:53 am:
Why would we want to take away advantages for employers. We are creating tax credits,tax abatements and TIF districts,under the guise of economic development,every day.
- 44th - Wednesday, Apr 10, 19 @ 8:20 am:
Amend the pension language in the constitution at the same time.
- wordslinger - Wednesday, Apr 10, 19 @ 8:43 am:
Greg Baise, working-class-hero lobster.
–Funny how we used to think that being fair meant treating everyone the same (equally).–
There’s been a graduated income tax in the United States since 1913.
–Amend the pension language in the constitution at the same time.–
What do you want it to say, what do you think it will accomplish? Be specific.