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Brady and Durkin announce resolution to remove “Fair Tax” from the ballot

Monday, May 18, 2020

* WAND TV

Lawmakers announced a resolution Monday to withdraw a $3.7 billion progressive income tax hike from the Nov. 3, 2020 ballot.

Illinois House Republican Leader Jim Durkin and Illinois Senate Republican Leader Bill Brady introduced the resolution to remove from the ballot.

The measure would ask voters to scrap the state’s flat income tax for a graduated one. The accompanying Senate Bill 687, also passed during the last legislative session, would implement introductory tax rates ranging from 4.75% to 7.99% starting Jan. 1, 2021.

Illinois Policy Institute pointed to the fact that small businesses and households have been significantly impacted financially by the COVID-19 pandemic.

Some lawmakers said a progressive income tax would exacerbate the economic downturn people are already enduring.

Illinois Policy Institute research shows more than 100,000 small businesses, which file as “pass-through” entities, would see tax hikes of up to 47% under the current proposed progressive income tax.

* Jordan Abudayyeh…

By pushing this resolution, the Republican leaders are using the coronavirus pandemic to advocate for silencing the voices of Illinoisans who now have the opportunity to vote on reforming our tax system. If the Republican leaders believe so strongly that the wealthiest Illinoisans can’t afford to pay their fair share then they should make their case to the voters instead of advocating for them to be removed from the process.

* From the Illinois Business Alliance, which claims to be a “member-driven business league” but doesn’t disclose its membership and is run by a former Illinois Policy Institute chief of staff…

“All across our state, thousands of small business owners dutifully closed their doors to help slow the spread of the coronavirus, and many remain closed today. Small business owners have been forced to lay off employees and over 1 million Illinoisans are unemployed today. Business owners have used personal savings or applied for loans to try and preserve their businesses so they can attempt re-opening when the governor’s closure orders are lifted. Sadly, many small businesses face the prospect of closing forever if they are not allowed to re-open soon.

“As the Illinois Business Alliance has said repeatedly, these are the very same small businesses that would face higher taxes under Gov. Pritzker’s graduated income tax. Raising taxes on small businesses at this time is wrong – morally and economically.

* From the Center for Tax and Budget Accountability, which I do not think has ever met a tax hike it didn’t find a way to like, but still has some reliable numbers

Hypothetically, if all of the 189,133 taxpayers earning more than $250,000 in income were all sole-proprietors (which they are not), that would amount to just 15% of all small businesses paying more in taxes, while the remaining 85% of small business owners would still pay the same or less under the Fair Tax.

S-Corps and partnerships are taxed the same as sole proprietorships, with the addition of the PPRT. Under the current tax structure, S-Corps and partnerships are also subject to a flat rate income tax of 4.95 percent plus the additional PPRT rate of 1.5%. This is a combined rate of 6.45%. Under the Fair Tax legislation, the combined effective tax rate would range from 6.25% to 6.45% for taxable income less than $250,000 and 6.45% to 8.36% (8.6% if filing jointly) for taxable income greater than $250,000. […]

More so, in 2017, the median income for individuals self-employed at their own incorporated business was $52,020 and for individuals self-employed at their own unincorporated businesses, the median income was $25,453 — far below where taxpayers would see in increase in their marginal tax rates.

Furthermore, according to 2017 IRS data, the average income for partnerships and S-Corporations in Illinois was $65,883. The top 5% of those businesses had an average income of $201,878. The top 1% of those businesses had an average income of $433,299. This means that somewhere between the top 1% and top 5% of businesses, by share of income, would see a tax rate increase. While the businesses in the top 1% could see an effective tax rate increase from 6.45% to 7.62% (including PPRT), that is far from the misrepresented 47% increase often touted by the Illinois Policy Institute. That 47% increase would only apply to, at most, 0.3% of taxpayers with taxable business income over $1 million — assuming all of the 0.3% of taxpayers are small businesses, which they are not — leaving more than 99.7% of small businesses to see a far smaller percentage increase, and 97% of small businesses to see no increase at all.

…Adding… ILGOP Chairman Tim Schneider…

If Governor Pritzker is so convinced that small businesses and people need to pay more, he should start the process of raising more revenue by bringing back to America the billions in inherited wealth he has stashed away in offshore accounts.

Unlike Pritzker, average Illinoisans don’t have billions of dollars in wealth to hide away in secret tax havens in low-tax countries in the Caribbean. Instead of asking middle class Illinoisans to pay more, he should lead by example and allow the state of Illinois to tax his billions at the same rate he wants small businesses to pay.

But alas, Pritzker never will because he believes in one set of rules for him and his family and another set of rules for everyone else.

- Posted by Rich Miller        

53 Comments »
  1. - Oswego Willy - Monday, May 18, 20 @ 12:00 pm:

    It should be noted that Leader Durkin is concerned for the 3%… one yet to see or read Leader Durkin rebuke his two GOP House members in front of signs with national socialists symbols and anti-Semitic words

    Oh, in a global pandemic supporting the 3%, the haves, over the have nots, as this will be framed, that won’t help in the politics.


  2. - Grandson of Man - Monday, May 18, 20 @ 12:01 pm:

    Yep, the ILGOP is unanimously opposed to a modest tax hike on the richest and 100% in favor of a flat tax hike and/or brutal cuts. Hello, Democrats, are you seizing on this to define the ILGOP? I would ride this baby all day and night long.

    “Lawmakers announced a resolution Monday to withdraw a $3.7 billion progressive income tax hike from the Nov. 3, 2020 ballot.“

    What a waste of time, and opening the door to being defined as protecting the richest at all costs, even with brutal cuts to the poorest and most vulnerable. Plus, what are they afraid of? Let the voters decide.


  3. - Candy Dogood - Monday, May 18, 20 @ 12:02 pm:

    How do these guys sleep at night?


  4. - M - Monday, May 18, 20 @ 12:09 pm:

    Who is paying Brady and Durkin to do this?

    “By pushing this resolution, the Republican leaders are using the coronavirus pandemic to advocate for silencing the voices of Illinoisans who now have the opportunity to vote on reforming our tax system.”

    Give the voters the facts (not spin) and let them vote for what they want.


  5. - the Patriot - Monday, May 18, 20 @ 12:12 pm:

    ==99.7% of small businesses to see a far smaller percentage increase==

    While telling the legislature to get a bill to help small business, Pritzker wants to raise taxes on small business. Pick one Governor, you can’t have both.


  6. - Oswego Willy - Monday, May 18, 20 @ 12:16 pm:

    It’s 3% of those filing income tax.

    That’s the thing.

    If anything, this plea underscores how difficult this pandemic will make defeating this more difficult.


  7. - Mama - Monday, May 18, 20 @ 12:16 pm:

    Surely Brady and Durkin know the current tax system is not working. There is no more fat left to trim from state government and they know it. The only thing they want to get rid of the state workers’ pensions and health insurance, but not their own pension or health insurance. Illinois has a lot of bills to pay. How does the Republicans expect to pay the bills using the current tax system?


  8. - M - Monday, May 18, 20 @ 12:21 pm:

    Did Pritzker really say he wants to raise taxes on small business? I doubt any small business owner is in the upper 3% bracket, and if they are, they can afford to pay more taxes.


  9. - City Zen - Monday, May 18, 20 @ 12:22 pm:

    Leave it on the ballot. I want to see how this eBay money is spent.


  10. - hmmmm - Monday, May 18, 20 @ 12:22 pm:

    So, the ‘fair tax’ (which how is it fair to tax one American more than another another American?) …how am I supposed to trust that it won’t effect me (as I don’t make much)? Sure, if enacted, I’ll pay the same, but what about next year? 5 years? etc. Nope…..no trust in Illinois politicians.


  11. - Lucky Pierre - Monday, May 18, 20 @ 12:27 pm:

    Is it really 3%

    Not when you include all the people who work at the successful small businesses in Illinois who will hopefully be still open and trying to crawl out a recession when this tax hike hits.

    Maybe someday JB can explain why President Obama too fac hikes off the table when the economy was in recession but now it is magically a great idea.


  12. - Oswego Willy - Monday, May 18, 20 @ 12:32 pm:

    === Not when you include…===

    Show your work.

    The call is 3% of those filing income tax.

    The rest is you trying to pretend if you change the measure it’ll work out.


  13. - Roadrager - Monday, May 18, 20 @ 12:34 pm:

    ==So, the ‘fair tax’ (which how is it fair to tax one American more than another another American?)==

    If you have $100,000,000, it is much easier for you to part with a larger percentage of your income than it is for someone with $100,000 or $10,000 to part with the same percentage. That’s why.

    And if you really want to get into the fairness of taxing one American “more” than the other, we can have a look-see at federal taxation rates over the last 40 years, and how being rich lets you buy your way into more tax avoidance loopholes than you can shake a stick at.


  14. - striketoo - Monday, May 18, 20 @ 12:35 pm:

    Illinois is not only going to need more money from the working wealthy but from the retired well off as well. There is no way to avoid a tax on retirement income given the tidal wave we are facing.


  15. - Just A Dude - Monday, May 18, 20 @ 12:36 pm:

    Hmmmm: If the progressive tax does not get voter approval then your tax rate will be going up a lot via an increase in the flat tax rate. And it won’t take 5 years.


  16. - Perrid - Monday, May 18, 20 @ 12:36 pm:

    I would kill for an ad to run something like this:

    “Jim Durkin doesn’t believe in democracy. He doesn’t want the people of Illinois to have the opportunity to approve or disapprove a fair, progressive income tax that raises revenue from the top 3% of wage earners in our state. He’s scared the people of Illinois want to tax the rich, and so he wants to silence them, take away their voice. Don’t let him.”


  17. - City Zen - Monday, May 18, 20 @ 12:41 pm:

    ==how is it fair to tax one American more than another another American?==

    More fair than taxing a working American and not taxing a retired American of the same means.


  18. - Norseman - Monday, May 18, 20 @ 12:42 pm:

    The failure to properly fund pandemic response efforts at the state and national level should be a lesson we all learn. Appropriate preventive spending may have lessened the amount of money we’ve now been forced to spend.

    The cost is still rising. With the feds ability to go into debt, it can deal with that cost better than the states. Illinois’s tax system and poor management under both parties has put it in a more precarious position.

    With the GOP blocking fed assistance to state and locals, Illinois will need revenue to recover. This is the lesson that must be learned since we failed to learn previous lessons so badly.

    Fair Tax will prevent the burden of taxes falling on those with lower incomes. The GOP want to protect the wealthy. So at a time when Illinois needs to repair and rebuild, they want to retrench and bring more suffering on the middle and lower classes.


  19. - Pundent - Monday, May 18, 20 @ 12:49 pm:

    The states need for revenue will be even more dire following the pandemic. I guess Durkin and Brady are advocating for a tax increase on everyone.


  20. - JS Mill - Monday, May 18, 20 @ 12:53 pm:

    =which I do not think has ever met a tax hike it didn’t find a way to like=

    Primarily because, since at least 2004, the CTBA holds the position that Illinois has a revenue problem. So pretty consistent. They have been very upfront about where the new revenue needs to go as well- structural deficit and legacy debt.

    To the post- Good luck. I wonder if Brady has proposed the “dime of every dollar” solution from his gubernatorial campaign?

    Any who- the GOP’ers should know that by the time this tax actually starts taking effect, Trump will have fixed the economy. Right?


  21. - Rural Survivor - Monday, May 18, 20 @ 12:54 pm:

    I don’t trust our state government. The money that will be needed for this state to pay its bills will go well beyond taxing the top 3%. Just last year the rates were needlessly voted on and approved in record time with little to no discussion. Opened my eyes.


  22. - Green Hornet - Monday, May 18, 20 @ 12:54 pm:

    How “fair” is it for the Non State Workers/Taxpayers, whom got limited input on the the free health care after 20 years, pension structures and payment plans that were jammed through the Illinois Legislatures as part of budget deals to pay for it all now.

    Those taxpayers that paid all of the “Temporary” tax increases that were to be used to eliminate the overspending backlog, and get the Pension funding mess on track.

    Is that “Fair” to us….?

    There is one common thread in ALL of the current and future financial problems in Illinois, the Speak of the Illinois House.


  23. - Oswego Willy - Monday, May 18, 20 @ 12:58 pm:

    === There is one common thread in ALL of the current and future financial problems in Illinois, the Speak(sic) of the Illinois House.===

    LOL

    Thank goodness. Some normalcy.

    “Because Madigan”

    I needed that laugh. Thank you.


  24. - Rich Miller - Monday, May 18, 20 @ 1:01 pm:

    ===how is it fair to tax one American more than another another American?===

    Have you ever paid federal income tax?


  25. - Oswego Willy - Monday, May 18, 20 @ 1:04 pm:

    === Taxpayers===

    We’re all taxpayers. State workers, non-state workers… everyone.

    === whom got limited input===

    Vote out your legislator. Your beef is with them.

    === Those taxpayers that paid all of the “Temporary” tax increases that were to be used to eliminate the overspending backlog, and get the Pension funding mess on track.

    “Those taxpayers”

    Again… We’re all taxpayers,

    “that paid all of the ‘Temporary’ tax increases that were to be used to eliminate the overspending backlog, and get the Pension funding mess on track.”

    It didn’t? Show your work.


  26. - Demoralized - Monday, May 18, 20 @ 1:04 pm:

    These people do realize that the income tax is based on income right? So, the businesses that are suffering right now as a result of this pandemic aren’t likely to pay increased taxes as a result of the graduated income tax and will likely pay less for the forseeable future.


  27. - Demoralized - Monday, May 18, 20 @ 1:06 pm:

    ==got limited input ==

    Your input comes through voting. If you don’t like the outcomes complain to your representatives. But please don’t say you had no say in the matter. We aren’t all individually asked what we think about something. That’s not how it works.

    ==Those taxpayers that paid all ==

    Who are “those?” Because taxpayers aren’t limited to pubic vs private employees.


  28. - Grandson of Man - Monday, May 18, 20 @ 1:12 pm:

    Graduated income tax proponents are upfront about what they support. They want to better protect social services, the budget, education, the state workforce and others who can less-afford cuts. They don’t have to backfill propaganda like the rich right wing anti-tax interests. What are they supposed to say, “We hate taxes and government and don’t care what happens as long as we pay less?” That wouldn’t work, so they make stuff up.


  29. - foster brooks - Monday, May 18, 20 @ 1:18 pm:

    after all the fee’s and taxes that were just raised good luck on that amendment passing


  30. - Tawk - Monday, May 18, 20 @ 1:22 pm:

    ==It should be noted that Leader Durkin is concerned for the 3%==

    The decisions of the 3% don’t impact the rest of us?


  31. - 44th - Monday, May 18, 20 @ 1:27 pm:

    4.95% of $50,000 and 4.95% of $500,000 sounds pretty fair to me. Richie paying more. Paying more federal, property , fees and sales tax to.


  32. - Jibba - Monday, May 18, 20 @ 1:43 pm:

    how is it fair to tax one American more than another another American?’

    That same way the feds do it, as well as the majority of states. We’re an outlier.


  33. - Huh? - Monday, May 18, 20 @ 1:50 pm:

    “How do these guys sleep at night?”

    Probably on their back with a CPAP machine to help with the snoring and sleep apnea. /s


  34. - Huh? - Monday, May 18, 20 @ 1:53 pm:

    This is another resolution that should die in the Rules Committee.


  35. - City Zen - Monday, May 18, 20 @ 1:55 pm:

    ==That same way the feds do it, as well as the majority of states. We’re an outlier.==

    And we’ll continue to be an outlier since the feds and most states have married tax brackets (or let married fed filers file separately on the same state tax return) and index those tax brackets against inflation.


  36. - Oswego Willy - Monday, May 18, 20 @ 1:56 pm:

    ===…since the feds and most states have married tax brackets (or let married fed filers file separately on the same state tax return) and index those tax brackets against inflation.===

    Narrator: it’s still 3% of all filed taxes.


  37. - Donnie Elgin - Monday, May 18, 20 @ 2:15 pm:

    “then your tax rate will be going up a lot via an increase in the flat tax rate. And it won’t take 5 years”

    MJM has been in possession of a supermajority that could have been lobbying for a legislative increase to the “Flat Tax”. Of course, the tax burden would then been felt by his base and the Dem’s would have to take full credit for the tax increase. They do not have the stomach for that.


  38. - Demoralized - Monday, May 18, 20 @ 2:25 pm:

    ==for a legislative increase to the “Flat Tax”==

    Umm, that’s happened.


  39. - RNUG - Monday, May 18, 20 @ 2:36 pm:

    == free health care after 20 years, ==

    At one time the State had a turnover problem because of the,vat that time, lower pay. The choice was pay higher wages, which would have resulted in even higher pensions, or give some other perk to keep employees. The premium free health insurance after working a minimum of 20 years and retiring was the perk they came up with.

    Considering the Medicare Advantage programs the State has imposed on the retirees, with assorted deductibles and co-pays, the State has clawed back part of that benefit. It’s still good insurance, but not totally free anymore with everything covered and paid like it used to be. I was just at the lab today and informed I’ll probably have to pay for the PSA test my doctor ordered.


  40. - Green Hornet - Monday, May 18, 20 @ 2:59 pm:

    Pay our fair share of Personal and Business Federal and State taxes……..will be paying both from Missouri starting in 2021


  41. - Oswego Willy - Monday, May 18, 20 @ 3:00 pm:

    ===… will be paying both from Missouri starting in 2021===

    Interstate 55, South, cross a big river….send a post card.

    If you’re leaving, I’ll let your thoughts fade too.


  42. - Annonin' - Monday, May 18, 20 @ 3:25 pm:

    Looks like Durkie & NoTaxBill were hopin’ to inhale some SpankyBaise loot (f there really is any) too bad this little stunt brought on an array of facts tha totally sink their ship


  43. - City Zen - Monday, May 18, 20 @ 3:31 pm:

    ==will be paying both from Missouri==

    Missouri’s income tax structure is worse than ours. They have one of those faux progressive tax structures where the top tax bracket is a little over $9,000. And why is that top tax bracket so low?

    No inflation indexing for over 40 years.


  44. - Green Hornet - Monday, May 18, 20 @ 3:32 pm:

    Enjoy your Pension, and almost free healthcare. Hope the “Fair Tax” revenues aren’t spent elsewhere and the checks start to bounce.

    We’ll be fine without Illinois, and you’ll be glad we’re gone.

    Looking forward to working with our new Employees and customers in Missouri.

    It all works out, no post card coming.


  45. - Oswego Willy - Monday, May 18, 20 @ 3:36 pm:

    - Green Hornet -

    “You’re still here?”

    Move on, or say that on Facebook.

    To the post,

    Dear Tim Schneider…

    If you’re making it about Pritzker, you have nothing to rebuff the tax on its merits.


  46. - Demoralized - Monday, May 18, 20 @ 3:48 pm:

    Green Hornet

    Don’t let the door hit you. I’m sure we won’t miss you.


  47. - Grandson of Man - Monday, May 18, 20 @ 4:07 pm:

    “We’ll be fine without Illinois, and you’ll be glad we’re gone.“

    Meh. It’s just one of the usual talking points. So old and tired. The right wing has nothing but scare propaganda because it’s indefensible to make harsh cuts and/or raise the flat tax. Republicans are not change people.


  48. - Fly like an eagle - Monday, May 18, 20 @ 4:10 pm:

    Let the people decide.


  49. - Norseman - Monday, May 18, 20 @ 4:38 pm:

    Green Hornet, I moved to Missouri to be closer to family, but I’m paying more for income taxes. Let me know what your business is so I can avoid it when you move across the river.


  50. - JS Mill - Monday, May 18, 20 @ 6:46 pm:

    =Green Hornet, I moved to Missouri to be closer to family, but I’m paying more for income taxes. =

    Yep, plus the cost of moving and a lower standard of living. Warren Buffet has nothing to worry about from the hornet.

    To the post, Brady and Durkin just cannot help themselves. Disappointed in Durkin.


  51. - Jibba - Monday, May 18, 20 @ 9:36 pm:

    Wow, CZ is on a roll today. He managed to turn two different comments into mentions of his unrelated favorite issues today. Somebody can sleep well tonight.


  52. - Da Big Bad Wolf - Tuesday, May 19, 20 @ 7:32 am:

    === Unlike Pritzker, average Illinoisans don’t have billions of dollars in wealth to hide away in secret tax havens in low-tax countries in the Caribbean. Instead of asking middle class Illinoisans to pay more, he should lead by example and allow the state of Illinois to tax his billions at the same rate he wants small businesses to pay.===
    Well anyone can put money overseas. The law isn’t just for rich people. But it’s not practical for nonrich people because you have to spend the money overseas as well.
    But sure bringing the money here and investing it in more companies like 1871 would be nice.


  53. - efudd - Tuesday, May 19, 20 @ 10:01 am:

    Green Hornet-

    Don’t know where in Missouri you are moving, but if you like any type of modern amenities, stay out of the bootheel. Outside of Cape and Poplar Bluff, it’s Mississippi circa 1912.


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