It’s simple math: Why the wealthy would much prefer a flat tax increase
Wednesday, Oct 14, 2020
* If you click here, you can calculate what your state income tax would be if the governor’s graduated income tax plan is implemented.
The math does not favor the wealthy. For instance, if your state-based adjusted gross annual income is $100 million, your taxes will rise by $3,040,000 under the “Fair Tax.”
* Gov. Pritzker and others have long warned that if the graduated income tax fails at the ballot box, then the state’s flat income tax would likely have to be increased by at least a percentage point.
In that one-point flat-tax scenario, the aforementioned $100 million earner would see their current state income tax bill rise by $1 million, from $4,950,000 to $5,950,000. While still an increase, that’s a savings of $2 million a year over the proposed graduated income tax rate. Pretty darned sweet.
Even if the flat tax is increased by two points, that $100 million earner would still save a million bucks a year compared to the graduated income tax rate.
It’s just a no-brainer for the self-interest of the super-wealthy. I don’t blame them one bit for fighting it.
* So, color me skeptical of claims like this…
…Adding… For the “what about” people in comments, this same argument applies to $10 million AGR or $2 million AGR. Makes no difference. They’re gonna pay less when the flat tax is increased vs. a new graduated income tax.