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Graduated income tax backers predict bipartisan support

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Illinois

Although they wouldn’t name any names, Democratic Reps. Lou Lang of Skokie and Christian Mitchell of Chicago said at a Statehouse news conference Monday that they think some Republicans will support their plan to introduce a graduated state income tax.

“This is an issue whose time has come,” said Mitchell, who is sponsoring the amendment. “I believe that this is going to pass with bipartisan support.” […]

Emily Miller of Voices for Illinois Children, an advocacy group that’s backing the amendment and a companion bill from Lang that would cut taxes for more than 99 percent of taxpayers while raising rates on the wealthiest Illinoisans, said she expects the House to vote Tuesday to approve the amendment.

“This does have some very promising bipartisan support,” she said, adding that the group has been working with members of both parties.

They’ll likely need at least three GOP votes in the House to overcome expected Democratic opposition. But they could need more. And Gov. Rauner is dead set against the proposal.

* Illinois is one of just eight states with a flat income tax among the 43 states which tax incomes. But not everybody thinks Rep. Lang’s companion bill, with its 9.75 percent top rate, is a good idea, including those who support the concept of a graduated income tax…

In general, it’s a good idea to consider when the state is short on revenue, [Don Fullerton, a tax policy expert and the associate director of the Institute of Government and Public Affairs at the University of Illinois] said, adding that a graduated system eases the burden on lower-income taxpayers while drawing in more revenue from those who have more disposable income.

That said, Fullerton thinks the upper end of Lang’s proposal may be asking too much.

Kim Rueben, senior fellow at the Urban-Brookings Tax Policy Center in Washington, agrees on both counts.

“Having a graduated income tax makes sense, but I would think that you don’t necessarily want to immediately go to one of the most graduated income taxes that we see in the country,” Rueben said. […]

Rueben said it might make more sense to have a smaller increase at the top of the scale and also raise rates on individuals earning between $100,000 and $500,000.

posted by Rich Miller
Tuesday, May 3, 16 @ 9:07 am

Comments

I’d like to see the amendment pass, but I’ll believe a Republican will vote for it when I see it.

Comment by Norseman Tuesday, May 3, 16 @ 9:10 am
Right on cue, the Governor rode in on his white money horse last night and promised “unprecedented money” for GOP members in the Fall. It would be unbelievable if it wasn’t history repeating itself. The man with the van still has NO PLAN.

Comment by out of touch Tuesday, May 3, 16 @ 9:14 am
Conceptually, it’s a step in the right direction but mathematically it needs some work. A progressive income tax is long overdue, but the rates need to be structured so that sufficient revenue is generated to cover the current shortfall. Even more income tax revenue is needed if we are to address property taxes.

Comment by AC Tuesday, May 3, 16 @ 9:16 am
Rauner’s support of Benton was a warning shot.

Proft’s outright threat against “quislings” was a second shot at non-Raunerites.

Any Republican who breaks ranks to vote for this (or anything else, really) is going to need to either feel their content to retire or that they can communicate to their constituents how they’ve represented their interests and not the Governor’s.

Comment by illini97 Tuesday, May 3, 16 @ 9:18 am
Lou Lang is a savvy political operator. I may be wrong, but perhaps this was drafted in such a manner that it could be paired back slightly. This would show Democrats as being willing to compromise, and still have the same effect in terms of cash flow. Just a guess, but in politics there is often room built in for compromise, especially on issues such as tax increases.

Comment by Saluki Tuesday, May 3, 16 @ 9:20 am
==Rueben said it might make more sense to have a smaller increase at the top of the scale and also raise rates on individuals earning between $100,000 and $500,000.==

In my NIMBY point of view it should be between $200,000 and $600,000.

Comment by Gruntled University Employee Tuesday, May 3, 16 @ 9:20 am
There might be a bit of truth to the bipartisan support. Rauner is sure bad mouthing it and waving around the promise of lots of campaign cash … almost like he is panicing.

Comment by RNUG Tuesday, May 3, 16 @ 9:20 am
For proposals the Speaker doesn’t like he often puts them up for a vote, and when they fail to pass he uses that as proof that the issue has no support. Will the Speaker take his own advice on this issue? Can we expect to see him at today’s press conference pledging to move on from this issue once and for all since it clearly does not have the support of the House?

Comment by Just Me Tuesday, May 3, 16 @ 9:22 am
I’m wondering if many voters understand that the choice is not between a progressive tax and the status quo (3.75 individual). Most observers say billons must be raised through increased taxation-on ncome. The only question is, who pays what portion of the billions.

Comment by Cassandra Tuesday, May 3, 16 @ 9:23 am
===I’d like to see the amendment pass, but I’ll believe a Republican will vote for it when I see it.===

I’d like to see it pass and sold as “tough medicine but necessary” and with political cover as its signed.

Of course, none of that will happen, and the “Over/Under” on total GOP “Green” is “0.5″

Only one GOP “Green” makes you a winner.

One.

Comment by Oswego Willy Tuesday, May 3, 16 @ 9:23 am
===since it clearly does not have the support of the House===

Let it play out first.

Comment by Rich Miller Tuesday, May 3, 16 @ 9:23 am
Let’s get the constitutional change to the ballot first!
Though I understand the reasoning behind releasing the rates to the public, and making that the push, I do think there can (and should) be some more compromises there.

Comment by Bleh Tuesday, May 3, 16 @ 9:23 am
They should raise the eligibility limit for the senior citizen property tax freeze.

Comment by DuPage Tuesday, May 3, 16 @ 9:24 am
===Let it play out first.===

Agreed, and I hope that cobbling together compromise makes that “0.5″ GOP “Green” far too low, and the Governor gets a “win” so everyone can move the ball forward.

I hope.

Comment by Oswego Willy Tuesday, May 3, 16 @ 9:30 am
I just do not see three or four R’s that will go off the Rauner Resort reservation on this one. Agreed that especially the corporate rate is probably negotiable downward as a compromise — and that is when it starts to get interesting. D’s ready to make some concessions and R’s will not even come back with a counter-proposal is great November fodder.

Comment by Touré's Latte Tuesday, May 3, 16 @ 9:35 am
The constitutional amendment will necessarily be written loosely to allow flexibility to change the taxation rates. Opponents will use it to sow mistrust among the voters…today they came after the millionaires, tomorrow they will come after you.

Comment by Six Degrees of Separation Tuesday, May 3, 16 @ 9:38 am
I agree with phasing in graduated income tax increases at a lower point. Only hitting the top 1% with a tax increase is more a slogan than a well-reasoned policy.

Based on slightly old numbers, taxpayers at about the 90th percentile pay less than the average effective (total state and local) tax rate. This would be a good place to start the phase-in of tax increases. Roughly half of IL’s personal income would be affected by this change (or is currently tax advantaged).

Of course, separate thresholds should be given for those filing individuals vs. joint returns.

Comment by X-prof Tuesday, May 3, 16 @ 9:40 am
At what point do vulnerable GOP members understand that alignment with Rauner is a liability?

Comment by out of touch Tuesday, May 3, 16 @ 9:41 am
I’m not sure why any Republican would support this seeing that it doesn’t even raise enough revenue to cover anyone’s budget, and they tick off the Governor in the process. And since it isn’t enough revenue, they’ll have to take another vote on revenue/tax increase in the near future to cover the $1-$3 billion needed to cover the rest of the budget. Even if one of the votes will cut taxes for most people, a lot of people are going to see this as two tax increases, not one.

We’ll see what happens, but if it does fail, guess is it will be because it didn’t ask for enough money.

Comment by From the 'Dale to HP Tuesday, May 3, 16 @ 9:43 am
==At what point do vulnerable GOP members understand that alignment with Rauner is a liability?==

Sadly, probably the day after election day. Unless they talk to Dunkin about how much Rauner’s money helped him.

Comment by HangingOn Tuesday, May 3, 16 @ 9:45 am
well Rich since BR likes to put nonbudget items up against passing the budget….maybe he should put up an a bill to eliminate Unions in state and local government in ILLINOIS to correct the error that big Jim made in 82 to beat Neil.

Comment by scott aster Tuesday, May 3, 16 @ 9:55 am
RNUG- That’s an interesting point, I didn’t think of that. Although I suspect that outside of McCann (who probably isn’t necessary for this?) Rauner’s ranting about money and revenge will be enough to keep Republicans in line.

Comment by Arsenal Tuesday, May 3, 16 @ 9:56 am
Is it time for the ILGOP to marginalize Rauner and his $20million?

I say it is. His neo-funding culture of throwing obscene amounts of money into races, through secretive 501c4’s, has been rejected by voters. I say the ILGOP does not have to worry about a repeat of that mess. This part of his experiment failed.

Remember that besides Rauner’s overt intention of creating a threatening shadow, he is fully and covertly intent upon protecting the .01% agenda.

Let’s help out American Capitalism and put a little bit more of those hard-earned profits back on the street, not the Cayman Islands. /s

At the end, who thinks it is wise to make a decision, like this vote, out of fear?

Let’s hope there are enough brave members of the ILGOP who realize that this time has come to have a more fair tax system.

Let’s get this done. Give the voters the chance to decide. It is the right thing to do.

Comment by cdog Tuesday, May 3, 16 @ 9:58 am
=== … it doesn’t even raise enough revenue to cover anyone’s budget … ===

Keep in mind folks, this doesn’t raise any money in itself. Not only does it have to be approved by the voters, a bill revising the tax rates will have to be passed by the GA and get approved or overridden.

Here’s hoping we can get this to the voters.

Comment by Norseman Tuesday, May 3, 16 @ 10:05 am
It’s true that some GOP support would be necessary for the income tax amendment to pass. But it’s wishful thinking that any House Republicans will stand up to the Governor and vote for this measure.

There were some House GOP votes to raise the income tax back in 1997, but that’s when the Governor (Edgar) was leading the charge. The GOP has clearly gotten more conservative since then. I hope I’m wrong, but I predict no GOP support for the Lang bill.

Comment by anon Tuesday, May 3, 16 @ 10:07 am
Six degrees - ‘Opponents will use it to sow mistrust’.

And rightly so. Look on the comments on this board - it’s not enough revenue to make a difference to only go after $1M+ income. And already calls to expand the range. The Federal income tax was started with the promise to only impact the wealthy. How did that work out?

Comment by Midway Gardens Tuesday, May 3, 16 @ 10:09 am
- Arsenal -

McCann is in the Senate. It’s House votes that will be needed.

Comment by RNUG Tuesday, May 3, 16 @ 10:21 am
I’d like to see it pass also, but I’ve seen this movie before and have my doubts.

I agree that this legislation is too top heavy, but the 1% apparently has a significantly lower tax burden as a percentage of income, and the tax burden is borne more by people with much lower incomes.

Comment by Grandson of Man Tuesday, May 3, 16 @ 10:22 am
Rant alert!

I really get tired of the Tea Party/GOP types complaining about ANY FORM of taxation!

If you don’t want to live in a larger society that shares in sacrifice for good roads, schools, social services, utilities, etc., please just declare yourself sovereign and go move to some island out in Waterworld.

The rest of us can probably get along fine without you.
/r

Comment by cdog Tuesday, May 3, 16 @ 10:23 am
Midway Gardens 10:09 - you are correct that the state GA, often with the complicity of our governors, has not exactly shown it can handle long-term obligations responsibly over the last 30 or 40 years, and building trust with the public that things will be different is the hardest sell right now. Sometime soon, they had better start.

Comment by Six Degrees of Separation Tuesday, May 3, 16 @ 10:36 am
Tic toc friday night comes quick

Comment by Foster brooks Tuesday, May 3, 16 @ 10:47 am
Ask the folks in NJ or CT how this worked out for them before hoping it gets done here

Comment by Sue Tuesday, May 3, 16 @ 11:30 am
This Governor will veto it. DOA.

Comment by Federalist Tuesday, May 3, 16 @ 11:32 am
== This Governor will veto it. DOA. ==

Constitutional Amendments do not go to the Governor. He can take no action on it. Once the House and Senate pass it, they go directly to the voters.

Now the bill to set the actual rates could be veto’ed by the Governor but he would eventually have to approve some set if rates if the CA were to become law.

Comment by RNUG Tuesday, May 3, 16 @ 11:42 am
So Reuben thinks that it is a good idea to start raising rates at $100k. Not jump change but not exactly, or even close, to being rich

The Camels nose in the tent.

Comment by Federalist Tuesday, May 3, 16 @ 11:52 am
Now the bill to set the actual rates could be veto’ed by the Governor but he would eventually have to approve some set if rates if the CA were to become law.

No, he wouldn’t. He could just let the current rates stand as is.

But if there are 71 votes on the CA, there would likely be 71 votes (enough to override a veto) on the rate structure bill.

Comment by AlabamaShake Tuesday, May 3, 16 @ 11:52 am
== . He could just let the current rates stand as is. ==

There are no current rates for a graduated tax.

Comment by RNUG Tuesday, May 3, 16 @ 12:11 pm
Democrats aren’t smart enough to figure out that the folks who can locate businesses anywhere they want look at the individual income tax rate of a state.

Comment by Anonymous Tuesday, May 3, 16 @ 12:21 pm
ILGOPs are not smart enough to know that once a location and customer base is established in an Illinois community, it is very risky for a small business to pick up and move, all to save a few coins on taxes.

There. fixed it.

Comment by cdog Tuesday, May 3, 16 @ 12:26 pm
Republicans will vote against a tax cut for 99 percent in order to spare the 1 percenters, who can best afford it, from a tax hike. That says a lot about GOP priorities nowadays.

Comment by anon Tuesday, May 3, 16 @ 1:28 pm
=== expected Democratic opposition ===

It might have bipartisan support. It does have bipartisan opposition.

Someone has their work cut out for them if they want this to become law.

Comment by Forerly Known As... Tuesday, May 3, 16 @ 1:39 pm
Cut first. And cut deep.

Comment by Tone Tuesday, May 3, 16 @ 1:50 pm
=== complaining about ANY FORM of taxation! ===

Respectfully, in Illinois it could be that they are complaining mostly about the effects of paying such a costly combined tax rate and not just complaining about taxes. Illinois has the highest effective tax rate of any state.

https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/#detailed

Comment by Formerly Known As... Tuesday, May 3, 16 @ 1:54 pm
There are no current rates for a graduated tax.

RNUG, read HJRCA59. It doesn’t requite a graduated tax. It just removes the flat tax rate mandate. So the CA could pass, and we could still have a flat tax.

Comment by AlabamaShake Tuesday, May 3, 16 @ 2:29 pm
@cdog

“The rest of us can probably get along fine without you.”

Actually, you CAN’t get along fine without us cdog. If you hadn’t lost the earners, income, revenues and businesses from Illinois over the last decade or so from those giving up and leaving the state, you could come pretty close to balancing the budget.

Rather than cut the crony and patronage worker gravy train, you kept on handing out pork and golden benefits you couldn’t afford. Those who left weren’t there to stop you at the ballot box.

You NEEDED us, cdog. You just weren’t smart enough to realize it and not kill the golden goose.

Comment by Zonker Tuesday, May 3, 16 @ 2:33 pm
@cdog
“ILGOPs are not smart enough to know that once a location and customer base is established in an Illinois community, it is very risky for a small business to pick up and move, all to save a few coins on taxes.

There. fixed it.”

You obviously know nothing about business not on the public dole, cdog. A few tax dollars don’t matter, but TRENDS do. What’s the trend in Illinois? Madigan and the power brokers will protect their crony and patronage base until the state sinks into the muck. They’ll raise taxes without regard to fairness or driving the revenue base away. He borrowed massive amounts and supported “pension holidays” that played a big part in the state’s demise, as did the growth in public employee pension and healthcare liabilities and the explosion in education overspending in Illinois.

The trends in Illinois are pointing to irresponsible management, corruption for special interests like Madigan cronies and public workers unions, and the GA raising taxes to unconscionable levels to support the corrupt systems. THAT’s what kills state job growth, not a single tax, rare tax increase.

Comment by Zonker Tuesday, May 3, 16 @ 2:42 pm
===He borrowed massive amounts and supported “pension holidays” that played a big part in the state’s demise, as did the growth in public employee pension and healthcare liabilities and the explosion in education overspending in Illinois.===

Did Republican governors sign off on any of these?

Put a think on that.

===If you hadn’t lost the earners, income, revenues and businesses from Illinois over the last decade or so from those giving up and leaving the state, you could come pretty close to balancing the budget.===

Actually, the sunseting of the last income tax rate has been a major factor, that, and Rauner refusing to have a budget, but you already know that…

crony, patronage, unions, corrupt, power brokers, crony, patronage, corruption…

Limited vocabulary there, - Zonker -, LOL

Comment by Oswego Willy Tuesday, May 3, 16 @ 3:18 pm
The rates proposed at the top will result in the wealthy and mobile to move. NJ just announced David Tepper moved to Florida. He was the single largest NJ taxpayer paying 146 million in 2015 or more then one percent of NJ personal tax revenue. You folks may not think this can happen here but why would Ken Griffen remain an Illinois taxpayer if we start charging him 9 percent. These people have options most people don’t have and the Dems are crazy to do anything to encourage our wealthiest residents to relicate

Comment by Sue Tuesday, May 3, 16 @ 4:20 pm
==What’s the trend in Illinois?==

Years of fiscal mismanagement recently replaced by an unparalleled rate of destruction led by a Governor unable to accept that he only controls a single branch of government.

Comment by AC Tuesday, May 3, 16 @ 4:28 pm
The 1% always find a way to hide their income.

Comment by Mama Tuesday, May 3, 16 @ 5:11 pm
Mama- it’s not a question of hiding income. But there is an old saying that capital always goes to places it is well treated. Just as corporations are doing inversions due to the US Corp tax rules- individuals who can move will leave Illinois and relocate to states where the tax structure is more receptive. 3.75 to 5 is tolerable for most of us-raise my rate to 9 and I have no choice.

Comment by Sue Tuesday, May 3, 16 @ 6:20 pm
@Oswego

===He borrowed massive amounts and supported “pension holidays” that played a big part in the state’s demise, as did the growth in public employee pension and healthcare liabilities and the explosion in education overspending in Illinois.===

Did Republican governors sign off on any of these?

Probably, but most of the damage was done by Blago when the pension issues went from “problem” under Ryan to “crisis” under Madigan, Blago, Emil Jones, Cullerton and Quinn.

Of course you knew that, but why pass up an opportunity to get a dig in at “your party”, right, Oswego?

As far as my “limited vocabulary”, can you think of words that better describe the issues with Illinois government?LOL

Comment by Zonker Wednesday, May 4, 16 @ 8:55 am
@AC

“==What’s the trend in Illinois?==

Years of fiscal mismanagement recently replaced by an unparalleled rate of destruction led by a Governor unable to accept that he only controls a single branch of government.”

and a speaker and president of the Senate that “own” much of the financial disaster that Illinois has become. Didn’t care to mention that, huh AC?

Comment by Zonker Wednesday, May 4, 16 @ 8:58 am
Is there a provision in the amendment that will allow the State to begin the taxing of retirement income?

Comment by Jechislo Wednesday, May 4, 16 @ 1:53 pm