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*** UPDATED x2 - All Senate to mansion - McConchie to meet with Pritzker *** Taxapalooza

Thursday, Apr 11, 2019 - Posted by Rich Miller

* Remember yesterday when we discussed the proposed constitutional amendment that deleted existing language barring the imposition of more than one income tax at a time? A refresher

Under the proposed language, [opponents] argued, the state would actually be allowed to levy multiple income taxes, each for a different purpose, which would effectively allow the state to tax the same income multiple times. […]

According to Harmon, the prohibition on levying multiple income taxes was simply a companion to the requirement for a single, flat tax rate. Without that prohibition, he said, the framers feared that lawmakers could levy a series of “flat” taxes on different levels of income – say, for example, one on income up to $30,000; another “flat” rate on income between $30,000 and $60,000, and so on – effectively creating a multi-tiered tax structure through a series of limited “flat” taxes on different levels of income.

By allowing the state to create a multi-tiered tax structure, Harmon said, the prohibition on multiple taxes would become unnecessary.

Furthermore, he said, if supporters of the proposed change had left in the prohibition on multiple taxes, critics would likely argue that a multi-tiered structure would violate that prohibition.

* Sen. Don Harmon was asked about it during yesterday’s Senate Executive Committee hearing

“You don’t believe removing the language that says you can only have one tax on income is removing a protection for taxpayers?” [Sen. Dale Righter, R-Mattoon] asked.

Harmon said that original language was only in there because the framers of Illinois’ constitution were afraid without it, legislators would create layered flat taxes, or a “synthetic graduated tax.”

“If you read … what that sentence means, it is intended to enshrine a flat tax and not give legislators an easy way around a flat tax,” he said. “If we (kept the language) … what we are essentially doing is creating a series of siloed flat taxes based on income level.”

Clear as mud.

SJRCA1 passed the committee on a party line vote.

* Meanwhile, this is a crystal clear admission about what the fight against a graduated income tax is really about

Republicans, like state Sen. Dale Righter, from Mattoon, said they‘re worried this would make it easier for future legislatures to endlessly raise taxes.

“Politicians … are pretty good at the class-warfare game,” Righter said. “And if you can point to them and say, ‘Well we’re going to get more money for your schools but we’re going to make the guys over there pay for it,’ that makes it easier to do.”

Yes, it does. Jacking up rates on upper-income taxpayers is a whole lot easier than raising them on middle-income taxpayers.

* And that concept is not so radical

“This is something many of us have been working on for the better part of a decade, and it is long overdue,” said state Sen. Don Harmon, an Oak Park Democrat who’s sponsoring the proposed amendment. “It is not a radical departure. It is, in fact, the common tax practice in most every other jurisdiction, and I believe that it will give us some nimbleness in our tax policy to allow us to close our structural deficit and begin to tackle the problems that Illinois faces.”

* In other news, Gov. Pritzker was asked Tuesday about GOP Sen. Dan McConchie’s proposed constitutional amendment to require a two-thirds super-majority vote in both chambers to increase state taxes and fees

Well, there was actually no negotiation about that. It was just something that they introduced on their own. The fact is that they haven’t proposed to you about how they’re actually overcome the budget deficit of the state or how they’re going to pay the bills of the state. They’re just demagoguing the issue.

So, I asked McConchie’s spokesperson if the Senator had ever requested a meeting with the governor to talk about his proposal…

Sen. McConchie met with a few of the Governor’s people a couple weeks ago, where the Senator mentioned to them that he has never met with the Governor and they told him they’d be happy to set something up, but Sen. McConchie has never heard from them since.

*** UPDATE 1 *** The governor’s office tells me that Sen. McConchie has accepted an invitation to the governor’s mansion tonight.

*** UPDATE 2 *** From Sen. McConchie…

The rest of the sentence should be “along with everyone else in the Senate.”

Hilarious.

[ *** End Of Updates *** ]

* And finally, take a look at these two excerpts from a Tribune story

Last month, Pritzker unveiled a plan he says would generate $3.4 billion in new annual revenue […]

Pritzker said that without a graduated income tax to generate new revenue, the only available options to address the state’s $3.2 billion budget deficit, more than $8 billion in unpaid bills and $134 billion in unfunded pension liabilities would be a 15 percent across-the-board spending cut or a 1 percentage-point tax increase on everyone.

He’s got a projected $3.2 billion structural deficit and his plan would raise a projected $3.4 billion. That doesn’t leave a whole heck of a lot of room for anything else, or for the unexpected.

       

23 Comments
  1. - Just Me 2 - Thursday, Apr 11, 19 @ 11:56 am:

    Raising taxes on other people is always easy.


  2. - Perrid - Thursday, Apr 11, 19 @ 11:59 am:

    “If we (kept the language) … what we are essentially doing is creating a series of siloed flat taxes based on income level.”

    Is he saying it needs to be taken out to have a marginal tax? Instead of different rates of flat taxes? I think that’s what he is saying, but yeah, it is as clear as mud.


  3. - PublicServant - Thursday, Apr 11, 19 @ 12:13 pm:

    Sen. McConchie. If you want to meet with the governor, use this thing called a phone.


  4. - Steve - Thursday, Apr 11, 19 @ 12:17 pm:

    Let’s hope there’s not going to be a national recession because Illinois might bring in less revenue than expected.


  5. - NoGifts - Thursday, Apr 11, 19 @ 12:17 pm:

    I like the situation is inflamed by using “jacking up” taxes, rather than increasing them. Jacking up is big and painful, while increasing them doesn’t sound nearly so.


  6. - wordslinger - Thursday, Apr 11, 19 @ 12:18 pm:

    This is really confusing. Does removing the language allow home rule governments to institute local income taxes, a la Indiana?


  7. - Rich Miller - Thursday, Apr 11, 19 @ 12:19 pm:

    ===allow home rule governments to institute local income taxes===

    No.


  8. - Plutocrat03 - Thursday, Apr 11, 19 @ 12:21 pm:

    Where is the language to tax off shore holdings?

    That’s a whole different bucket of money that could help with the revenue the State needs.

    You could make it as simple of the self reporting of taxes not paid when buying over the internet. Off shore assets not otherwise taxed……


  9. - Honeybear - Thursday, Apr 11, 19 @ 12:29 pm:

    My bet is the 15% across the board spending cut
    Oompa Loompas take it on the chin again.
    I tell you what
    Rauner must be so happy
    That his legacy
    Of anti public union
    Is being preserved and extended.

    15% is going to mean massive layoffs
    From a workforce
    That aspires
    To skeleton crew.


  10. - wordslinger - Thursday, Apr 11, 19 @ 12:30 pm:

    thanks


  11. - cdog - Thursday, Apr 11, 19 @ 12:39 pm:

    Why is the flat tax not being raised immediately?

    Continuing to rack up $3.4B in budget shortfalls, adding to the unpaid $8B, while waiting for the constitutional fight to play out, is reckless.

    Use codified deductions and exemptions to lessen the impact on the lower income folks.

    (This is my own form of pragamatism as I have come to realize there is no political will to cut expenses.)


  12. - The Dude Abides - Thursday, Apr 11, 19 @ 12:49 pm:

    “Let’s hope there’s not going to be a national recession because Illinois might bring in less revenue than expected”

    That’s why I feel that Pritzker’s plan isn’t going to raise enough revenue. I could see a recession coming about the time the graduated tax plan goes before the voters in November 2020. I’m expecting a downturn by the end of 2021 at the latest.
    As for the GOP they are against cuts, at least they never mention anything specific that needs cut and they are against more revenue, at least in the form in income taxes. I guess they are for continued deficits just like Rauner was.


  13. - Honeybear - Thursday, Apr 11, 19 @ 1:35 pm:

    -That’s why I feel that Pritzker’s plan isn’t going to raise enough revenue.-

    So we just abandon trying anything? I really hope the Fair Tax is successful so that maybe in a recession we won’t have to resort to a 15% cut. Maybe just 5%. But we either jack up the flat tax, which I think would be impossible without losing the DEM majority in the next election or we try to institute a Fair tax
    or frankly, because we have no testicles/ovaries
    they will do what doesn’t directly effect the masses.
    cut government ( and thus public servants like me)
    Public Servants
    seem to always be the
    sin eater


  14. - Anon - Thursday, Apr 11, 19 @ 1:52 pm:

    All that new revenue and the only way to make the numbers work is to short the pensions by a $1 billion plus every year.

    I can’t wait to see how they explain that the big tax increase that was supposed to fix everything not only didn’t, but that it did nothing to make the pension situation even $1 better.

    They just aren’t being honest with the public about our situation, and it is sad.


  15. - Perrid - Thursday, Apr 11, 19 @ 2:02 pm:

    uh, Anon, you know the $3.4 billion is a potential revenue increase years from now? And that the $1.1 billion decrease to the pensions is for this upcoming year? Do…do you not understand the concept of time?


  16. - Fast Eddie - Thursday, Apr 11, 19 @ 2:09 pm:

    To The Updates:

    If the governor’s office reached out to imply that Pritzker and McConchie were going to meet about the constitutional amendment proposal…

    ….as I read the updates…

    ….when in fact the senator is one name out of 69 on a guest list for a party…

    ….that’s embarrassing. Malpractice, really.


  17. - Anonymous - Thursday, Apr 11, 19 @ 2:13 pm:

    Sen. McConchie. If you want to meet with the governor, use this thing called a phone.
    ===
    That’s not how it works.


  18. - Jocko - Thursday, Apr 11, 19 @ 2:14 pm:

    I enjoy Righter and McConchie sharing their concerns with regard to deficits and class warfare. How’d they vote last time (back in July 2017)?


  19. - ZC - Thursday, Apr 11, 19 @ 2:14 pm:

    >> Raising taxes on other people is always easy.

    Yes, it is. It’s called running huge structural deficits, and it’s called taxing our children. Republicans and conservatives are pros at it today, especially in D.C.


  20. - Anonymous - Thursday, Apr 11, 19 @ 2:23 pm:

    It’s impressive that the new governor’s office is already adept at lies and half-truths.


  21. - Nickle - Thursday, Apr 11, 19 @ 2:34 pm:

    Wasn’t Quinn making the pension payments with 5% rate


  22. - The Dude Abides - Thursday, Apr 11, 19 @ 4:26 pm:

    @Honeybear, You are misunderstanding my post. I didn’t say I was against the plan. In fact I support the graduated tax idea. If the graduated tax is approved by the voters, at some point within a couple of years after it passes I predict that it will have to be tweaked. In its present form approximately 3% of taxpayers are seeing an increase. I think long term more than 3% of taxpayers will have to pay more in order to generate enough revenue to meet our needs.


  23. - Responsa - Thursday, Apr 11, 19 @ 5:02 pm:

    The new governor who is without political experience is demonstrating that he’s in a little over his head in similar ways to the last new governor who was without political experience.


Sorry, comments for this post are now closed.


* Isabel’s afternoon roundup
* Pritzker says he 'remains skeptical' about Bears proposal: 'I'm not sure that this is among the highest priorities for taxpayers' (Updated)
* It’s just a bill
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* Flashback: Candidate Johnson opposed Bears stadium subsidies (Updated x2)
* $117.7B Economic Impact: More Than Healthcare Providers, Hospitals Are Economic Engines
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