* Crain’s…
Illinois lawmakers are considering a new “millionaire’s tax” that could generate billions in new revenue. But the measure, which would have to go before voters on this November’s ballot, faces a tight deadline and political hurdles that sank the “fair tax” proposal in 2020.
On the table in the state legislature are a pair of competing measures that would both place a new referendum on the statewide ballot to establish an additional 3% income tax on any resident who pulls in at least $1 million per year. […]
The two proposals — one from Rep. La Shawn Ford, D-Chicago, and another from Rep. Natalie Manley, D-Joliet — only really differ in how they plan to spend the new revenue. Ford’s bill would dedicate the new funds to property tax relief, likely in the form of $1,500 rebates for Illinois homeowners, while Manley’s would divide revenue between property tax relief and funding for schools.
* Synopsis of HJRCA26…
Proposes to amend the Revenue Article of the Illinois Constitution. Provides that an additional income tax shall be imposed on individuals in an amount equal to 3% of the portion of the individual’s income that is greater than $1,000,000 for the taxable year. Provides that the revenue collected from the tax shall be used to provide property tax relief. Effective upon being declared adopted.
* HJRCA21…
Proposes to amend the Revenue Article of the Illinois Constitution. Provides that an additional income tax shall be imposed on individuals in an amount equal to 3% of the portion of the individual’s net income that is greater than $1,000,000 for the taxable year. Provides that, of the revenue collected pursuant to those provisions, 50% shall be used to provide property tax relief and 50% shall be distributed to school districts solely on a per pupil basis. Effective upon being declared adopted.
I’m told that 21 is the one on the table.
The catch is that “shall be distributed to school districts solely on a per pupil basis” means the dollars would not be distributed based on need. That means school districts which are adequately funded would receive the same amount of money per pupil as schools which aren’t. And that could very well mean the state will then have to come up with more funding for its Evidence-Based Funding law to “reverse the added inequity,” as one administration official explained.
Discuss.
- 44 - Tuesday, Apr 21, 26 @ 1:08 pm:
Trust Illinois politicians with more of our $? Do a better job managing what you have. Revenue way up, should be enough. Billions just waiting to be scooped up?? lol. BS numbers and most will declare residency where there second or third home is located.
- Think Again - Tuesday, Apr 21, 26 @ 1:09 pm:
Anti-growth measure that is ill-advised - but at least the Dems finally found the courage to 100% own a tax increase and put their political capital on the line.
- anon - Tuesday, Apr 21, 26 @ 1:12 pm:
Chris Christy said it best–Democrats should take a long vacation as the only way they will screw November up is by offering up dumb ideas.
- Wentworth - Tuesday, Apr 21, 26 @ 1:13 pm:
Per-pupil funding at CPS is the highest it has ever been. CPS enrollment was declining, sharply, and is perhaps staying level now. Funding is not the issue.
CTU is asking for a dues increase, therefore why not push for more education funding, too, to help fund that.
- Rich Miller - Tuesday, Apr 21, 26 @ 1:14 pm:
===but at least the Dems finally found the courage===
It’s just a bill at the moment.
- Rich Miller - Tuesday, Apr 21, 26 @ 1:14 pm:
===Per-pupil funding at CPS===
Is CPS mentioned even once above?
- City Zen - Tuesday, Apr 21, 26 @ 1:18 pm:
I see they’re ignoring inflation again. Not good when they can’t get the fundamentals right.
What happens to the 8 to 5 ratio for coprorate taxes? Does that mean the corporate tax ration can now be applied to 7.95% instead of 4.95? Seems like there might be a conflict there.
- Let there be Sunshine - Tuesday, Apr 21, 26 @ 1:19 pm:
How does this affect the current/go forward flat tax constitutional language…..if passed will it allow the opening of pandora’s box of tiered rates in future years….??
- Penny - Tuesday, Apr 21, 26 @ 1:20 pm:
Greedy vultures. As wealth leaves, the burden will be shifted to middle income families.
- Mason County - Tuesday, Apr 21, 26 @ 1:25 pm:
Usually it is much easier to get this type of measure approved by the voters when they know it does not affect them. And even more so when it is obvious they directly benefit. The graduated income tax did not pass because it was confusing to many as to how it was really going to play out for them personally. Will it drive these high-income earners away? Most probably, unless they have a business that is tied directly to the state and they need to be here to operate it.
Would it pass a November ballot? I think the odds are very high that it would.
- Horseshoe Voter - Tuesday, Apr 21, 26 @ 1:30 pm:
I’m no fan of the “solely on a per pupil basis” caveat, but I’m curious what about EBF would require more money to reverse the inequity. EBF is all about raising the floor for the least adequately funded districts with nothing in place to curb excesses for well-funded districts. (Earlier versions would have dealt with this, but the “no winners and losers” mantra won out.) In FY18, there were 145 districts below 60% funded; today there are zero. In FY18, there were 146 districts over 100% and 5 over 200%; today there are 239 over 100% and 17 over 200%. We’ve made a lot of progress for the most underfunded districts, but we’re still deeply inequitable.
- Braceville Brad - Tuesday, Apr 21, 26 @ 1:32 pm:
Koodos (I guess) to the coalition of the 1% and corporate America for somehow convincing middle and lower class Americans to vote directly against their self-interests in the name of protecting their self-interests when it comes to tax policy. Truly shocking the amount of just dirt poor individuals fighting to protect the 1%.
- B - Tuesday, Apr 21, 26 @ 1:38 pm:
I love the tears of the bootlicking billionaire lovers parroting every lie the billionaire class shoves at them. It would be comical of not so sickening.
Weird how we have data upon data that the wealthy dont leave when taxes are raised on them but the same people will keep parroting that lie over and over ad nauseum. Illinois has more millionaires today than it did 10 years ago. How is that possible since they all already left from high taxes?
Crazy how data always counters right wing parroted lies.
Tax the wealthy yesterday.
- Sue - Tuesday, Apr 21, 26 @ 1:40 pm:
There are plenty of very well funded districts where extra money ought to be treated as a form of property tax relief by the district reducing its levy accordingly. But would they do it? It would be a remarkable outcome, to say the least.
- Jerry - Tuesday, Apr 21, 26 @ 1:41 pm:
Where is the Wealth going? Lower income tax rates in another state mean higher taxes elsewhere.
- Aaron B - Tuesday, Apr 21, 26 @ 1:46 pm:
==Ford’s bill would dedicate the new funds to property tax relief, likely in the form of $1,500 rebates for Illinois homeowners==
Is this $1,500 per homeowner anywhere or just the rep giving an example of how the property tax relief would work? It would be more complicated but I would be much more in favor of a percentage based property tax relief instead.
- P. - Tuesday, Apr 21, 26 @ 1:49 pm:
It’ll trickle down eventually.
- Candy Dogood - Tuesday, Apr 21, 26 @ 1:50 pm:
===only really differ in how they plan to spend the new revenue.===
I think it is bad policy to specifically tie an increase in income tax to specific spending. There’s already a budget process for doing that. I support a constitutional change to allow for the taxation of the wealthiest among us.
===BS numbers and most will declare residency where there second or third home is located. ===
This isn’t how taxes work, especially for rich people. Failing to file or failing to pay taxes on Illinois sourced income would still be illegal. If more millionaires decide to break the law the response should be increased enforcement.
===Anti-growth measure that is ill-advised===
I don’t think permitting rich people to hoard their wealth is specifically “pro growth” but that’s the benefit to producing arguments without evidence. Next thing you know you’re going to pull out a napkin with the “Laffer Curve” on it and start making fantastical claims alleging how asking millionaires to pay an extra 3% tax on their income is the equivalent to taxing them 100%.
We still had millionaires in the 1950s, 1960s, and 1970s when the feds were putting up income tax rates at twice what the federal rates are now.
But you are carrying on a fine tradition: Folks that don’t want the very wealthy, the millionaires and the billionaires, will abandon all honesty, ethics, and reality to lie, steal, and cheat their way to the lowest tax rate on the richest people possible and the expense of everyone else.
- Sue - Tuesday, Apr 21, 26 @ 2:00 pm:
Aaron B - the amendment just says the money would be used for “property tax relief.” Nothing is specified.
- Penny - Tuesday, Apr 21, 26 @ 2:03 pm:
Spending less never seems to be an option.
- City Zen - Tuesday, Apr 21, 26 @ 2:06 pm:
==Illinois has more millionaires today than it did 10 years ago==
I hope so. The cumulative inflation rate is 38% over that timespan.
- Think Again - Tuesday, Apr 21, 26 @ 2:08 pm:
=bootlicking billionaire lovers=
Much like the so-called “Fair-Tax, ( lost 53%-47%), if the millionaire’s tax gets on the ballot, it will drive no vote turnout
- DuPage Saint - Tuesday, Apr 21, 26 @ 2:14 pm:
A million bucks may seem like a lot now but how will it look in 30 years
- Garfield Ridge Guy - Tuesday, Apr 21, 26 @ 2:38 pm:
I’d suggest that the bill avoid one of the pitfalls of the purported Fair Tax, and not create a penalty on folks who decide to get married. Anti-natalism policy isn’t going to be a winner (just like it wasn’t in 2020).
- Pennies - Tuesday, Apr 21, 26 @ 2:40 pm:
Illinois’ government was always built to finance a population of X. Current population is X-1. Might be looking at X-2. Taxing to achieve X can push it to X-3. Solution is to create X+1. You don’t do that by strangulating X-1.
- 40,000 ft - Tuesday, Apr 21, 26 @ 3:01 pm:
Best part of all that? Two words
“property tax”
Worst part of all that?
Not reevaluating spending addictions, while pumping vitriolic grabs of other people’s money.
Suggestion, if I may…
Show us how smart Illinois government can be by getting into the spending details. Anybody that’s from around here, knows exactly what I’m talking about. Be a hero, cut some fat and waste and …
- Adroit Opiner - Tuesday, Apr 21, 26 @ 3:03 pm:
= A million bucks may seem like a lot now but how will it look in 30 years=
It’ll be the equivalent of about $500K today, or still less than 2% of filers. I’m not a huge fan of hard-coded thresholds in tax legislation but this type of argument is so overblown. And I’m sorry to say but no, if you’re an average Illinoisan, there is very little likelihood you will hit this threshold in your lifetime.
- Rich Miller - Tuesday, Apr 21, 26 @ 3:14 pm:
=== Be a hero, cut some fat and waste and===
How’s the state gonna do that for schools, cities, counties? Take them all over?
C’mon.
- Carpe GM - Tuesday, Apr 21, 26 @ 3:30 pm:
Hilarious outpouring of sympathy for millionaires on this comment thread. This is about giving a small fraction of massive wealth from the massively wealthy to schools and tax relief for every homeowner. No brainer. Love to see any poll that shows most voters wouldn’t go for it. Hard to fathom.
- Rich Miller - Tuesday, Apr 21, 26 @ 3:31 pm:
===Hard to fathom===
And yet…
- Carpe GM - Tuesday, Apr 21, 26 @ 3:41 pm:
I think a small, competent push for the referendum would go a long way and pass with overwhelming voter approval, as it has in several other states.
This is fundamentally different from the last “graduated” push. It’s a specific marginal rate on income above $1,000,000. That’s not a vaporous graduated tax.
- Demoralized - Tuesday, Apr 21, 26 @ 3:49 pm:
==cut some fat and waste==
Ahh, the traditional Republican talking point when talking about budgets. It’s easy to say and you don’t have to provide any sort of intelligent thoughts about what that budget might look like.
- Sue - Tuesday, Apr 21, 26 @ 4:18 pm:
Lets not forget this proposal is one step toward taxing retirement benefits( and treasury income) as the tax will be 3 percent of your AGI which includes those items unless the legislation specifically deals with that issue
- Sue - Tuesday, Apr 21, 26 @ 4:19 pm:
3 percent of AGI exceeding 1 million
- Demoralized - Tuesday, Apr 21, 26 @ 4:21 pm:
==The catch is that “shall be distributed to school districts solely on a per pupil basis”==
This takes care of Chicago
- B - Tuesday, Apr 21, 26 @ 4:44 pm:
@pennies
Ah now we have moved onto the depopulation parroted lie. In 2020, when the census amended its bad counting, Illinois had over 13 million people, the most it has ever had.
Try again, you and sue must talk to the same crackpots to get your parroted garbage.
- Steve - Tuesday, Apr 21, 26 @ 6:13 pm:
-when the feds were putting up income tax rates at twice what the federal rates are now.-
The pre-1986 tax code allowed the rich to write off interest on more than one mortgage. Billionaire Nelson Bunker Hunk lower his taxable income to $9 in 1976 by writing off the interest on 5000 gas stations and pizza joints. The high marginal rates were never achieved.
- Jazzy Day - Tuesday, Apr 21, 26 @ 7:15 pm:
Glad common sense prevailed over GOP fear mongering and confusion to get the amendment through committee. Counting on Democrats in the ILGA to let the voters decide on this no-brainer policy question.
Should millionaires pay a bit more to support schools and property tax relief? YES! Keep going and don’t be tripped up by the noisemakers and know-it-alls. The people will support you.
- B - Wednesday, Apr 22, 26 @ 7:10 am:
@steve
And yet now they have other means to show 0 income and pay little to nothing. And no, not every millionaire back then was able nor did that. Nice try though with the newest and latest lie to protect the robber barons