* The Sun-Times headline was great today…
‘Stairway to Heaven’ longer than Senate debate before historic tax vote
You don’t usually hear much from proponents during a tax vote, but it was kinda weird that the Republicans didn’t put up more of a floor fight.
* From the Tina Sfondeles story…
After just seven minutes of debate, Senate Democrats took the first major step Wednesday in advancing Gov. J.B. Pritzker’s goal of revamping how the state taxes income — seeking the biggest change in the state income tax since it was enacted a half century ago.
The Illinois Senate passed its version of a graduated income tax package on strictly partisan lines — and its fate now lies within the Illinois House, where changes are anticipated. […]
Up next is a battle in the Illinois House, where not all facets of the plan may make it through. Legislators have just weeks to figure out a capital plan, approve a budget and try to pass another one of Pritzker’s priorities: legalizing recreational marijuana. It sets the stage for an action packed home stretch of the spring session.
Steve Brown, spokesman for Illinois House Speaker Mike Madigan, said the speaker will “continue to work with the governor and the Senate supporters to move that all to the governor’s desk.”
“Just a reminder that the speaker has supported it since November,” Brown said of the graduated income tax plan.
It’ll be tougher to pass this constitutional amendment in the House, but I do think it’ll still pass. If it goes down, the whole session will explode.
House Democratic leader Greg Harris of Chicago said the concept of a graduated tax has broad support among his caucus, but before the House votes, Democratic leaders need to “carefully analyze” the Senate’s changes to Pritzker’s original proposal.
“We need to review them,” Harris said. “It’s very complicated legislation. It has a lot of moving parts.”
Somehow, I just cannot see the House sending a bill to repeal the estate tax to the desk of a billionaire governor who inherited much of his wealth, unless they want to truly mess with the guy.
* Meanwhile, on the one hand, you see rhetoric like this Daily Herald editorial…
Since even before Pritzker won election last November, opponents to a graduated income tax have decried the change as a grand “bait-and-switch” scheme in which lawmakers will get voters to free them from the yoke of a constitutionally mandated flat tax, then run rampant adjusting a graduated income tax schedule however the mood suits them to meet ever-increasing spending goals.
On Wednesday, senators demonstrated that not only is that a legitimate fear but they’re willing to do the switching even before the bait has been taken.
True, the complaint about lawmakers running amok with taxes under a graduated system ignores the fact that they could just as easily run amok with the existing flat tax. And, true, the changes approved Wednesday were not comprehensive; they accounted for only a small fraction of a percentage point in the middle to upper regions of the income scale. But, let’s be real, lawmakers have been playing fast and loose with the flat tax since installing a “temporary” increase in 2011, letting it expire in 2014, then hiking it again in 2017, this time to 4.95% and permanently.
Yeah, those flat tax hikes were soooooo easy to pass. No problems at all. Fast and loose.
* On the other hand, you see this…
Senate Republican Leader Bill Brady of Bloomington said the current flat tax system protects taxpayers because lawmakers are reluctant to raise taxes on everyone and that a graduated tax amendment will be defeated by voters.
“We believe our current Constitution crafted by the 1970 constitutional convention wisely decided that Illinois taxpayers need protections against politicians,” Brady said. “The fact that our Constitution currently calls for a flat tax has given various protections to those individuals and protected, we believe, the middle class.”
He said a graduated tax will open the door to raising taxes on the middle class. Harmon, though, said it is false that a flat tax protects the middle class.
“It does exactly the opposite,” Harmon said. “If you are saying the flat tax is a good idea, you are protecting the uber rich, not the middle class.”
Brady is right. The flat tax has most definitely worked against attempts to raise the rates because they’d have to raise ‘em on everybody. Upper-income earners are right to be wary of this change and Harmon just confirmed it, as did Sen. McConchie…
“With a flat tax, you raise rates on everybody,” said Sen. Dan McConchie, R-Hawthorn Woods. “The changing of rates becomes not an issue of first resort but an issue of last resort. As soon as we implement a graduated tax system, we actually make it structurally and politically easier to change those rates and brackets going forward.”