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Thursday session roundup

Friday, May 22, 2020 - Posted by Rich Miller

* Capitol News Illinois

The Illinois Senate took the chamber’s last step in putting language for a graduated income tax constitutional amendment on the November general election ballot and publishing arguments for and against the measure in pamphlet form.

The Illinois Constitution Amendment Act requires the General Assembly to prepare a brief explanation of the proposed amendment, a brief argument in favor, a brief argument against, and the form in which the amendment will appear on the ballot in a pamphlet that will be distributed to voters.

That means each household with a registered voter will receive the information, which is contained in Senate Joint Resolution 1, by mail.

The arguments against were prepared by Republicans, and the arguments for by Democrats.

The language is here. This is what will appear on the ballot

The proposed amendment grants the State authority to impose higher income tax rates on higher income levels, which is how the federal government and a majority of other states do it. The amendment would remove the portion of the Revenue Article of the Illinois Constitution that is sometimes referred to as the “flat tax,” that requires all taxes on income to be at the same rate. The amendment does not itself change tax rates. It gives the State the ability to impose higher tax rates on those with higher income levels and lower income tax rates on those with middle or lower income levels. You are asked to decide whether the proposed amendment should become a part of the Illinois Constitution.

* Finke

Illinois voters will automatically receive an application to vote by mail before the November election in an attempt to avoid exposing people to the coronavirus by making them vote in person.

The vote-by-mail bill was the most controversial bill acted on by lawmakers Thursday, the second day of the abbreviated General Assembly session.

The House and Senate also worked on other measures, including workers compensation changes, extending the expiration dates of some laws and making technical changes to help local governments deal with the effects of the coronavirus. […]

The House approved the bill by a 72-43 vote, but not until the representatives spent nearly three hours debating the bill.

* Team Tribune coverage

In the Senate, lawmakers voted 50-4 to approve a bipartisan bill to help coronavirus victims that would make it easier for them obtain worker’s compensation benefits.

The measure, an accord struck between business groups and organized labor, would allow “essential” workers who contract COVID-19 to qualify for worker’s compensation benefits with the assumption that the virus was contracted on the job. The rules, which would expire Dec. 31, apply to first responders and others exempt from Pritzker’s stay-at-home order.

In order to qualify, workers’ jobs would have to require them to come into contact with members of the public or to work in a location with more than 15 employees. The agreement would require anyone diagnosed after June 15 to have a positive test for COVID-19.

* Sun-Times

The Senate also approved a cannabis measure that makes changes to the current law that legalized recreational marijuana, including changes to advertising restrictions, taxes, making it easier for medical cannabis dispensaries to move and giving more flexibility to state cannabis regulators.

With many cannabis dispensaries facing hiring backlogs as they wait for potential employees to pass background checks, the bill also will allow the new hires to begin work while the background check is being conducted.

…Adding… The Pritzker administration, I’m told, is not pleased with some of the language in the cannabis bill pertaining to allowing recreational dispensaries to move. They think that could undermine the rollout of the social equity program and are working to make some changes.

       

33 Comments
  1. - Grandson of Man - Friday, May 22, 20 @ 11:25 am:

    The graduated income tax amendment language is very nice. It puts the question to voters as to whether they want to allow lower taxes for the middle class and lower incomes, and higher taxes for the highest incomes. It’s a very basic concept. A great many have indicated that they support this.


  2. - Orca - Friday, May 22, 20 @ 11:27 am:

    = It gives the State the ability to impose higher tax rates on those with higher income levels and lower income tax rates on those with middle or lower income levels.=

    Clearly biased language.

    Should be:
    It gives the State the ability to impose higher tax rates on those with higher ‘and middle’ income levels and lower income tax rates on those with middle or lower income levels.

    That is unless of course all “middle” income tax levels will be rate reduced…which will be hard to define and promise.


  3. - Donnie Elgin - Friday, May 22, 20 @ 11:28 am:

    Look everyone is doing it, so let’s pass it …

    “which is how the federal government and a majority of other states do it”


  4. - Rich Miller - Friday, May 22, 20 @ 11:35 am:

    ===higher ‘and middle’ income levels===

    Please. Upper income gets hit.


  5. - Norseman - Friday, May 22, 20 @ 11:37 am:

    === The arguments against were prepared by Republicans … ===

    Yet, the GOP voted against the informational resolution. I understand the politics, but it really makes me laugh that they can’t even support an informational piece containing their arguments.


  6. - Jibba - Friday, May 22, 20 @ 11:42 am:

    “which is how the federal government and a majority of other states do it”

    That’s a pretty good argument for how taxation should rightly be done.


  7. - Unstable Genius - Friday, May 22, 20 @ 11:45 am:

    The GA forgot to include wording indicating that “the $250,000 limit will be adjusted higher consistent with inflation and will never be reduced.” Also, “the fair tax rates, once established, will never be increased”. And also forgot the part about the fair tax will result in significant “real estate tax reform”. Just a few minor inadvertent admissions.


  8. - Grandson of Man - Friday, May 22, 20 @ 11:45 am:

    What study or analysis shows middle income or middle class includes $250,001/year per capita or household income? That’s where the higher rates would start in the Fair Tax. It would not increase taxes on the middle class, not even close.


  9. - TheInvisibleMan - Friday, May 22, 20 @ 11:48 am:

    I get a little bit of a chuckle out of cannabis having to be advertised.


  10. - Donnie Elgin - Friday, May 22, 20 @ 11:51 am:

    “simply upgrading Illinois’ old tax system”

    That sounds about right; upgrades cost more.


  11. - Oswego Willy - Friday, May 22, 20 @ 11:51 am:

    === The GA forgot to include wording indicating that “the $250,000 limit will be adjusted higher consistent with inflation and will never be reduced.” Also, “the fair tax rates, once established, will never be increased”===

    LOL

    “The GA forgot to include wording indicating that “the $250,000 limit will be adjusted higher consistent with inflation”

    If you wanted your own amendment, get your 71 and 36.

    Right now, 3% will be the only ones seeing an increase, and further, in this economy it’ll be a miracle if it stays at 3% of those filing over $250K.

    “… and will never be reduced.”

    Show me ANY tax in the history of ever, less a sunsetting tax by its design, that has provisions as strict as that.

    Just vote No, and be done with it.

    ===Also, “the fair tax rates, once established, will never be increased”===

    Yeah, ok.. how about finding a GA in the next 5-8 years, and a governor willing to move rates… right now.

    Good luck.


  12. - Chris Widger - Friday, May 22, 20 @ 11:56 am:

    ==Show me ANY tax in the history of ever, less a sunsetting tax by its design, that has provisions as strict as that.==

    Well, the pension language in the state constitution.


  13. - Oswego Willy - Friday, May 22, 20 @ 12:00 pm:

    === pension language===

    Is that a tax?

    (Oh boy, this will be good)


  14. - JS Mill - Friday, May 22, 20 @ 12:15 pm:

    =pension language=

    Well bully for you. You got a little cheap shot in even though it made no sense in the context.

    You seem like someone that is cool if people don’t keep their contractual obligations to you. /s


  15. - T - Friday, May 22, 20 @ 12:17 pm:

    It was my understanding that the constitutional amendment would also allow retirement income to be taxed…is that wrong? If it is not, it should be included in the description.


  16. - Fighter of Foo - Friday, May 22, 20 @ 12:18 pm:

    If anyone thinks that once passed, they won’t raise on the middle class with all the obligations and the majority of the earners reside, I have a bridge in Brooklyn to sell you. the rich are rich because they can get around taxes. How many toilets will JB remove now?


  17. - Rich Miller - Friday, May 22, 20 @ 12:18 pm:

    ===It was my understanding ===

    Either get off Facebook or go back to it.


  18. - Responsa - Friday, May 22, 20 @ 12:22 pm:

    The ads regarding fair tax will be ferocious and misleading from all sides. I do not look forward to the bombardment to the senses that we will endure.


  19. - City Zen - Friday, May 22, 20 @ 12:25 pm:

    Has the phrase “do it” ever appeared on a statewide ballot before?


  20. - southsider - Friday, May 22, 20 @ 12:30 pm:

    == - T - Friday, May 22, 20 @ 12:17 pm:

    It was my understanding that the constitutional amendment would also allow retirement income to be taxed…is that wrong? If it is not, it should be included in the description.==

    I think you’re joking, but in case you’re not the constitution does not require any income tax be imposed. It only allows the state to impose a tax. Current law does not tax retirement income. Nothing in the proposed constitutional amendment would change that.


  21. - BigLou - Friday, May 22, 20 @ 12:32 pm:

    Maybe I don’t understand the intricacies. But from what I understand I don’t like how it gives the legislature the ability to lower the hurdle on what income level they think taxes should be raised on. For example one year they say anyone making over $100k will be taxed at 5% and people making $75-$100K will be taxed at 3%. The following year they are not getting the revenues they need by not being good stewards of the public’s money so they raise the $75k to $100K taxes to 4.5%. If I’m understanding how it works correctly I don’t think the general public is understanding it this way.


  22. - Fighter of Foo - Friday, May 22, 20 @ 12:51 pm:

    Big Lou… Bingo. They will come for us before the ink dries.


  23. - Oswego Willy - Friday, May 22, 20 @ 12:57 pm:

    === They will come for us before the ink dries.===

    (Sigh)

    Show me your 60/30 and this Governor signing a tax increase in this climate…


  24. - Data Guy - Friday, May 22, 20 @ 1:00 pm:

    Question for the group because it is a busy day before the long weekend, and I don’t have time to do the research before comments close.

    Does the amendment specifically say that the rate schedule has to have higher rates for higher levels? Specifically, is it possible under this amendment that there could be a lower rate for a higher income bracket than for a lower income bracket? I realize that a potential rate schedule has been proposed that does not do this. However, if the amendment language doesn’t specifically prohibit it then the ballot language is certainly misleading. My (admittedly very basic) understanding was that the amendment only enables the state to tax different income levels at different (and not necessarily progressive) rates.


  25. - Data Guy - Friday, May 22, 20 @ 1:07 pm:

    “which is how the federal government and a majority of other states do it”

    Nobody likes how high their federal income tax is. Not a great argument: “Let’s be more like the federal government where the lowest rate is twice as high as Illinois. Vote for this.”

    This isn’t a fair comparison but it will be a comparison made nevertheless.


  26. - Donnie Elgin - Friday, May 22, 20 @ 1:10 pm:

    Clever how they don’t need to list the rates…

    for taxpayers who file a joint return and have a net income of $1,000,000 or less: (A) 4.75% of the portion of the taxpayer’s net income that does not exceed $10,000; (B) 4.9% of the portion of the taxpayer’s net income that exceeds $10,000 but does not exceed $100,000;(C) 4.95% of the portion of the taxpayer’s net income that exceeds $100,000 but does not exceed $250,000; (D) 7.75% of the portion of the taxpayer’s net income that exceeds $250,000 but does not exceed $500,000; and (E) 7.85% of the portion of the taxpayer’s net income that exceeds $500,000 but does not exceed $1,000,000; and (4) for taxpayers who file a joint return and have a net income of more than $1,000,000, 7.99% of the taxpayer’s net income.


  27. - RNUG - Friday, May 22, 20 @ 1:21 pm:

    == Maybe I don’t understand the intricacies. ==

    Currently, the IL Constitution requires any income tax to be a flat tax, ie, the same tax rate for all individuals. This CA allows (not requires, allows) for graduated rates on individuals based on income brackets. That’s all it does.

    Everything else, IE, the brackets and rates, are all in a separate bill that the GA has already enacted contingent on a progressive tax amendment passing.

    Those brackets and rates are subject to change IF you can get the GA to vote for a change and the Governor to sign it.

    History - the flat rate started in 1969 at 2.5% and stayed there until 1983 (23 years). From 1983 to 1990 it went up and down between 2.5% and 3% (7 years). From 1990 to 2010 it stayed at 3% for 20 years. From 2011 to 2014 it was 5% for 4 years. In 2015 it sunsetted, no vote required, back to 3.75% which lasted for 2 years. In 2017 the tax rate went to 4.95% where it has been for 4 years.

    Effectively speaking over 50 years (ignoring the temporary surcharge rates in the 80’s), the GA has voted to increase taxes 3 times and somewhat deceased the rate once.

    Will the GA find it easier to play with the rates under a progressive income tax? In practice, probably not. The GA members still rely on the 3% wealthy in this State for a lot of their campaign contributions, so the ‘millionaires’ will still have a lot influence.

    And if this CA does not pass, the unspoken alternative to the State’s revenue needs is an increase the current flat tax rate of 4.95%, probably to between 6% with no change in exemptions to 7% - 7.5% with a big increase in the value of the personal exemptions.

    Either way the State income tax will be going up; the only question is who exactly will pay more. If this CA does pass, it will be the wealthy. If it does not pass, it will be everyone.


  28. - Donnie Elgin - Friday, May 22, 20 @ 1:26 pm:

    “And if this CA does not pass, the unspoken alternative to the State’s revenue needs is an increase the current flat tax rate of 4.95%, probably to between 6% with no change in exemptions to 7% - 7.5% with a big increase in the value of the personal exemptions”

    That is true in theory, however the political will to pass a tax increase on the base may elude MJM and the Dem’s.


  29. - Huh? - Friday, May 22, 20 @ 1:40 pm:

    “The measure, an accord struck between business groups and organized labor, would allow “essential” workers who contract COVID-19 to qualify for worker’s compensation benefits with the assumption that the virus was contracted on the job.”

    Good. My oldest daughter is an essential worker in a grocery store. Now if she gets sick, she will be covered by workers comp.


  30. - Really - Friday, May 22, 20 @ 1:40 pm:

    Just something else for the fireplace once I receive this in the mail. Until they learn to spend money properly the answer is and will remain, nope.


  31. - Jibba - Friday, May 22, 20 @ 2:05 pm:

    “They will come for us before the ink dries.”
    They can come for you now. And they will if this does not pass.

    “That is true in theory…”
    I find that RNUG has a good handle on both theory and practice. Given the need for revenue, what else do you think is going to happen?

    “Until they learn to spend money properly …”
    And your thoughts are? Cut everybody? Perform miracles to unconstitutionally trim pensions? Which agency do you want to extinguish? Name it.

    Lots of illogic today.


  32. - Yalp - Saturday, May 23, 20 @ 1:42 am:

    The language “higher income tax rates on higher income levels” does not bode well for this CA becoming a reality. It is going to take a lot of education in just a few months to get the public to understand what “higher income levels” actually means. If I go into the polling booth and I see this language, even if I am in favor of people who are “wealthy” paying more in taxes, I will pause and wonder what that phrase means, which is not good.


  33. - Oswego Willy - Saturday, May 23, 20 @ 7:01 am:

    === The language “higher income tax rates on higher income levels” does not bode well for this CA becoming a reality.===

    … and yet polling to the CA has it close to the threshold to pass, and further, there hasn’t been an ad out there for it to push the thoughts.

    It’ll bode fine, especially after a pandemic where the “haves and have nots” see where people are different.


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