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Civic Committee of the Commercial Club of Chicago turns thumbs down on “Fair Tax”

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Illinois

* The group is actually upset that the proposed “Fair Tax” doesn’t raise enough money…

A group of executives from the state’s leading employers on Tuesday came out against Gov. J.B. Pritzker’s proposed graduated income tax referendum, saying approval of the measure on the November ballot “all but promises that Illinois will not address its long-term financial challenges.”

The Civic Committee of the Commercial Club of Chicago said in a statement that its opposition to the proposal is “based on the state’s decades-long history of fiscal mismanagement.”

“The result will be further loss of jobs and people, long-term cuts in critical social services, a shrinking tax base burdened with growing debt and a guarantee that Illinois will continue to have the worst credit rating of any state in the country,” the group said.

* Don’t believe me? From its policy statement…

Proponents of the amendment seem to think that a graduated income tax will do the trick, and that the projected $3.6 billion in additional revenue is enough to address the State’s financial difficulties. It is not.

* Press release…

Vote Yes For Fairness Chairman Quentin Fulks released the following statement in response to the Civic Committee:

“It’s no surprise that an organization of the wealthiest people in our state who have benefited from avoiding paying their fair share for 50 years is voicing their opposition to the Fair Tax. Instead of standing up for working people, the Civic Committee has repeatedly advocated for increasing the flat tax by 20% and implementing a retirement tax because they prefer to put the tax burden on our lower and middle-income families and seniors.

“The choice facing Illinois voters is clear: Either vote yes for the Fair Tax to ask the wealthiest in the state to pay their fair share and give a tax cut to 97% of Illinoisans, or let the millionaires and billionaires have their way and make hardworking families pay.”

See the Civic Committee’s report, where they advocate for increasing the flat tax and implementing a retirement tax, here.

* Tribune…

The Civic Committee in a 2019 report called for an $8 billion package of tax increases, budget cuts and more funding for Illinois’ massively underfunded public employee pension systems to stabilize the state’s finances. That report called for increasing the flat-rate tax by 20%, from the current rate of 4.95% to 5.95%, as well as imposing the income tax on retirement income.

Both issues have surfaced in the debate over the fate of the proposed amendment.

Pritzker has noted that a 20% hike in the flat tax is an option, along with 15% across the board spending cuts, if voters reject the proposed amendment. At the same time, opponents have contended the amendment would open the state’s income tax to retirement income though Illinois does not tax retirement income and nothing in the amendment changes that law.

* Crain’s…

While the committee’s [2019] proposal did call for pension reform, it would do so by boosting state contributions rather than cutting benefits. It also proposed establishment of a new, cheaper health insurance program for state workers; rapid consolidation of local governments to save money; and a full review of state spending it believes could save $1 billion.

Committee President Kelly Welsh said the decision to urge a “no” vote was reached after extensive discussions among a 90-person group. The organization will not buy ads, Welsh said.

posted by Rich Miller
Wednesday, Sep 30, 20 @ 2:44 am

Comments

JB’s political side really needed to take the lead on this and from the outside it doesn’t look like it.

As of today I do not think it passes.

Comment by Almost the weekend Wednesday, Sep 30, 20 @ 8:06 am
Newsflash: A bunch of rich guys from Chicago weigh in on continuing to allow them to hide behind “those” people. They’re for it.

Comment by PublicServant Wednesday, Sep 30, 20 @ 8:11 am
If the amendment fails, we should bump the rate a couple points across the board, but exempt the first $20K per person so that households with income below the median pay nothing, those above the median pay less or about the same, and those way above the median pay a good share more. I bet those folks would be happy with a progressive tax then.

Comment by thechampaignlife Wednesday, Sep 30, 20 @ 8:39 am
If I get one more unsolicited text message from the tax proponents I’m going to lose my mind. As of now the text messages alone are enough for me to vote against this.

Comment by Hmmmmmmmmm Wednesday, Sep 30, 20 @ 8:43 am
Where is the plan to reduce state spending and waste? I work for a state agency and I see wasteful spending and areas where funding can be cut. The governor needs to fix the leak before pouring more money in. I also take offense to the ads referring to “let the millionaires and billionaires pay their fair share”. My husband and i are just now about to hit the $250k mark after working very hard for 40 years. We have 6 kids in our blended family and school loans to pay and much more. We are definately not in the millioinaires or billonaires club but are being put in that “group” . Seriously not FAIR

Comment by Rosie Wednesday, Sep 30, 20 @ 8:45 am
- Rosie -

=== Seriously not FAIR===

Do you understand that it’s *after* the $250k…

What is your understanding?

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 8:47 am
Did anyone actually think this organization, which represents primarily millionaires and billionaires, would ever have endorsed a fair tax? These folks still think we can cut our way out of this crisis or that we can change constitutionally obligated pensions. They would rather push that narrative then admit that they have not been paying their fair share of taxes and that burden has been pushed onto middle and working class people.

Comment by Shytown Wednesday, Sep 30, 20 @ 8:50 am
==bump the rate a couple points across the board, but exempt the first $20K per person so that households with income below the median pay nothing==

That wouldn’t be legal. But the state could increase the personal exemption or create/increase existing tax credits that phase out above a certain level of income. Then again, there’s nothing preventing them from doing that today.

Comment by City Zen Wednesday, Sep 30, 20 @ 8:52 am
-Oswego Willy-
yes, i realize its after the $250k but why pay any extra until the govenor has put together a plan for spending cuts and again i don’t like to be referred to a millionaire when collectively my husband and i are clearly not millionaires. Sick of misleading ads (on both sides)

Comment by Rosie Wednesday, Sep 30, 20 @ 8:53 am
- Rosie -

So you agree with the Civic Federation’s thoughts?

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 9:05 am
=== i don’t like to be referred to a millionaire===

You are in the top 3%

97% of filers make less.

It’s after the $250K as well.

I get it, you are voting for yourself, no crime in that, good on you, I bet you’re even more upset with the federal brackets too?

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 9:07 am
Rosie, if you are aware of waste at your agency why don’t you report it and do something about it instead of waiting for the governor to do it?

Comment by Big Mike Wednesday, Sep 30, 20 @ 9:23 am
Rosie, I get you about the state wasting money. You’re doing it right now.

Comment by Sickntired Wednesday, Sep 30, 20 @ 9:30 am
I will vote for the amendment because the situation is desperate. But I think the skepticism about whether the tax increase is sufficient to right the ship is warranted. The skepticism about whether Illinois has the fiscal discipline to plow all of the added revenue into pensions is warranted. At this point, how can you blame anyone for not trusting the state to do the right thing?

Comment by Funtimes Wednesday, Sep 30, 20 @ 9:40 am
The ol’ “cut waste” tripe from rich right wing interests, masquerading as state administrators unhappy with their agencies. Concern trolls or not, waste is not even a drop in the bucket of revenue we’ve lost in the pandemic. Three-plus billion/year in new revenue from the richest is substantial, though no one should be saying it’s a fiscal panacea, which it is not, but it certainly would help.

The Civic Committee represents people with initials as their first names, so par for the course. But it wants to tax retirement incomes, ironically contradicting Vote No. It’s better for Vote No that the Committee does not run ads.

Comment by Grandson of Man Wednesday, Sep 30, 20 @ 9:47 am
=== I get you about the state wasting money===

Example?

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 9:48 am
– The organization will not buy ads, Welsh said. –

The only ad space left is in newspapers. The Civic Committee is supposed to fiscally wise. It isn’t going to waste it’s money.

Comment by Leigh John-Ella Wednesday, Sep 30, 20 @ 10:03 am
Proponents of the tax increase are constantly citing both that many states have this taxation scheme and that 97% of people will pay the same or less. But take a look at the states that have a progressive tax: States with a graduated income tax, on average, start escalating rates on families earning $18,200 a year, and the average midpoint of the tax brackets is reached at $44,434 per family.”

Comment by midway gardens Wednesday, Sep 30, 20 @ 10:15 am
The Civic Fed could have mentioned how the constitutional amendment removes the provision that says the state can’t have more than one tax on income. It’s a serious structural flaw that creates uncertainty and could negatively impact economic growth. Instead, they fall back to common tropes.

Comment by City Zen Wednesday, Sep 30, 20 @ 10:18 am
Midway Gardens — right now, the highest rate in Illinois is reached at $1.

Comment by Whatever Wednesday, Sep 30, 20 @ 10:23 am
==== I get you about the state wasting money===

Example?

Sickntired was referring to Rosie herself as wasting state resources as she identified herself as a state worker and was presumably commenting here during state work hours

Comment by Joe Bidenopolous Wednesday, Sep 30, 20 @ 10:25 am
“As of now the text messages alone are enough for me to vote against this.”

In case you’ve ever wondered how Illinois voters have helped get us into this jam.

– MrJM

Comment by @misterjayem Wednesday, Sep 30, 20 @ 10:26 am
With current fiscal mess the supposed Fair Tax( a fair tax is where everyone is treated equal) will not cover the existing problem let alone the future expenditures and do not even take into account the many proposed programs that will increase expenditures in the future as well. midway gardens will be closer to the truth of how the graduated tax structure would change in the near future to meet expenditures and that will be a tax increase on the middle class as well and a large one at that when the politicians have access to more taxing options and playing around with tax brackets. The tax amendment as written opens up to many taxing options with a political system that is one of the most unethical systems in the nation.

Comment by Arock Wednesday, Sep 30, 20 @ 10:34 am
The Fair Tax goes down. Likely not very close.

The notion that the citizenry can be threatened by a 20% across the board tax increase is a miscalculation.

The political truth is that there will not be a single Republican vote on a tax increase and the Dems will have to pass it on their own. A 20% income tax increase in the next term will wipe out all suburban gains that the Dems will enjoy this election cycle.

So there it that . . . .a Dem income tax increase without Republican help = an unmitigated disaster in 2022 in the suburbs regardless of how the maps are redrawn.

Comment by Bear Down Wednesday, Sep 30, 20 @ 10:37 am
=== The tax amendment as written opens up to many taxing options with a political system that is one of the most unethical systems in the nation.===

Example?

Nothing has changed, as the process itself, to raise taxes, is still the same, meaning the GA must find 60/30, 71/36 abd find a governor willing to sign.

What is opened up? The GA can raise taxes at any time now, so that can’t be it.

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 10:37 am
If the problem is pensions and it’s in the constitution then just change the constitution. Seems like that is one problem. Then the rest is just a 15% cut and raising the flat tax by 1%. Vothers seem to want the state to reduce spending. Is there a way to directly ask them once and for all what they want cut and then just do it. Then we can get past this. Voters seem to elect representatives to the state house who are not really serious about making cuts in the budget.

Comment by Publius Wednesday, Sep 30, 20 @ 10:40 am
I love the fuzzy logic being thrown out by the Civic Committee. They know IL has a tax system problem and has made recommendations. They also want spending issues to be addressed. There is now an opportunity to start addressing the fairness of the tax system, but they want to stop that effort to pout about spending.

We’re not talking about a fix that can be undertaken during any session of the General Assembly. This takes 2 years to implement a change. Like it or not, this proposal fairly improves the system. The Civic Committee can continue to advocate spending adjustments. Unless the GOP gets thrown out of the U.S. Senate majority, there will be a lot more spending adjustments to make because of COVID revenue loses. Painful ones that will drastically affect the lives of Illinoisans.

Cut the baloney about supporting an improvement in the tax structure only if a spending cut package is adopted. Who is judging this magic balance. Is the governor agreeing with Civic Committee sufficient? The GOP agreement sufficient (I know this is a laughable thought give GOP intransigence to anything but the most draconian and impossible cuts)? And then we go through this lengthy sales process where we find that the wealthy benefactors of the right were playing games and still opposing Fair taxes.

Again, if you don’t care about the fairness of IL’s tax system, then vote on your self-interests. Go to the Fair Tax Calculator and see what you’ll pay.

Comment by Norseman Wednesday, Sep 30, 20 @ 10:41 am
=== The political truth is that there will not be a single Republican vote on a tax increase and the Dems will have to pass it on their own. A 20% income tax increase in the next term will wipe out all suburban gains that the Dems will enjoy this election cycle.===

The colossal failure, if the Fair Tax goes down, will be the frittering away of weeks and weeks and WEEKS of having $50+ million and never saturating the “97%” molasses, then the closing argument of the “everyone’s taxes will go up” sulfur.

It will go down as bad as O’Malley losing to save money for a run for Governor, as bad of a tactical choice as Rutherford’s Friday Fiasco.

Two million VBM apps are out there, has the Fair Tax proponents done enough to offset the negative ads that need, not 50%, but enough to stop the threshold crossing.

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 10:43 am
Arock: ==will not cover the existing problem let alone the future expenditures ==

Assuming you are correct. Still I would not not turn down a raise just because it’s not enough to pay off all my debts so why bother. I would take that raise and improve my financial situation. Tax the wealthy more, which is fair in my estimation, and improve the state’s financial health.

That is another reason why I’m voting for the fair tax.

Comment by don the legend Wednesday, Sep 30, 20 @ 10:48 am
==The tax amendment as written opens up to many taxing options

Example?==

This language in the current state constitution was crossed out in SJRCA0001:

At any one time there may be no more than one such tax imposed by the State for State purposes on
individuals and one such tax so imposed on corporations.

Was there a reason for removing this limitation? I haven’t heard one word from JB’s team on this.

Comment by City Zen Wednesday, Sep 30, 20 @ 10:52 am
===At any one time there may be no more than one such tax imposed by the State for State purposes on
individuals and one such tax so imposed on corporations.

Was there a reason for removing this limitation?===

Care to speculate? What’s your concern?

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 10:54 am
@Oswego Willy -

If it fails I doubt anyone on JB’s team takes responsibility.

If it succeeds they will all take credit.

Comment by Thomas Paine Wednesday, Sep 30, 20 @ 10:54 am
Listed as members of the Commercial Club of Chicago are (1) JB Pritzker, Governor of Illinois, (2) Penny Pritzker, and (3) Tom Pritzker, CEO of the Pritzker Organization and Hyatt Hotels Corp.

That has to be pretty embarrassing. And Quentin Fulks is criticizing the membership of this organization for their stance?

In addition, The Fair Tax group is still running television ads that simultaneously say 97% of taxpayers will see no change in their taxes or that the 97% of taxpayers will see a tax cut. No clarification seems to be forthcoming on this confusion, other than we need to trust the Illinois Legislature to do the right thing if the measure passes.

Of interest, a number of Illinois House Democratic Ads are running, with all Democrats claiming to reform corrupt Springfield and to vote against the corrupt Republicans either holding seats or seeking them. If Springfield is that corrupt then why trust them to do the right thing with a graduated tax or anything else?

Confusing? You bet.

Comment by Louis G Atsaves Wednesday, Sep 30, 20 @ 10:57 am
=== If it fails I doubt anyone on JB’s team takes responsibility.

If it succeeds they will all take credit.===

JFK after the Bay of Pigs used this…

“Victory has 100 fathers and defeat is an orphan.”

True then, true to your take, true going forward too.

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 11:02 am
Sorry, but I quit listening to most anything the Civic Committee had to say a long time ago.

Comment by Our Joe Wednesday, Sep 30, 20 @ 11:09 am
===Listed as members of the Commercial Club of Chicago===

The Civic Committee is not comprised of the entire Commercial Club membership.

Comment by Rich Miller Wednesday, Sep 30, 20 @ 11:10 am
==Care to speculate? What’s your concern?==

The concern is more than one tax on income. For example, the state could implement a Pension Stabilization Tax of 2% on all income over $50,000.

Again, a simple explanation by JB’s team would clear this up. But why else would they remove the one tax provision?

Comment by City Zen Wednesday, Sep 30, 20 @ 11:15 am
=== For example, the state could implement a Pension Stabilization Tax of 2% on all income over $50,000.===

“It’s just a bill”

Find me a sponsor, both chambers, and a governor willing to sign *that*

You should email them and ask why.

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 11:18 am
@ Oswego Willy, @Sickntired, @ Big Mike
“Your wasting taxpayers money now”…actually I am on vacation this week taking care of my mother who just had surgery. However, rest assured, I am a state WORKER, not employee. I can’t tell you how many hours, evenings and weekend I donate to my job and not get compensated for it.
“report waste” I have done everything I can in my unit to cut down on spending and making sure my staff are WORKING. I cannot do anything about the need to cut/abolish half of CMS, DoIt and positions in agencies that are filled with non-workers, and more….

Comment by Anonymous Wednesday, Sep 30, 20 @ 11:22 am
The ILGOP is saddled with unanimously protecting the richest at all costs, including a flat tax hike. That’s fun, already being a super-minority party.

Comment by Grandson of Man Wednesday, Sep 30, 20 @ 11:35 am
==Find me a sponsor, both chambers, and a governor willing to sign *that*==

It’s a moot point if they kept the one tax provision in the constitution to begin with.

Comment by City Zen Wednesday, Sep 30, 20 @ 11:53 am
=== It’s a moot point if …===

… you can’t find a sponsor, 60/71, 30/36, and a governor to sign, you also know that.

“It’s just a bill”

Comment by Oswego Willy Wednesday, Sep 30, 20 @ 11:54 am
Does anyone else see the cognitive dissonance surrounding the fair tax debate?

The opponents ignore the fact the the federal government has a graduated income tax system.

If a graduated income tax is good enough for the feds, why is it bad for the State?

Comment by Huh? Wednesday, Sep 30, 20 @ 11:59 am
==At any one time there may be no more than one such tax imposed by the State for State purposes on
individuals and one such tax so imposed on corporations.

Was there a reason for removing this limitation? ==

Because it will not longer be necessary. It was put in to prevent the GA from doing an end run on the flat tax requirement by enacting 2 or more income taxes - one at a 1% rate on all income, and a second at 1% on income over $10,000, etc. - that would together be the same as a single, graduated-rate tax, It’s in the debates on the constitution.

Comment by Whatever Wednesday, Sep 30, 20 @ 12:09 pm
Kelly Welsh, head of the Civic Committee, used to work in the Obama administration as chief counsel to Penny Pritzker, when she headed Commerce. Hard to square that with opposition to a progressive income tax.

Comment by Rasselas Wednesday, Sep 30, 20 @ 12:50 pm
@City Zen@8:52:

==the state could increase the personal exemption==

That is exactly what I am proposing. Increase the personal exemption to $20K, increase the rate to whatever it would take to reach the revenue that FAIR tax would yield. Totally doable now and basically the same effect or better for most households.

Comment by thechampaignlife Wednesday, Sep 30, 20 @ 1:02 pm
===square that with opposition to a progressive income tax===

Again, they want higher taxes and they want the working stiffs to pay a lot more. Not surprising considering the source.

Comment by Rich Miller Wednesday, Sep 30, 20 @ 1:20 pm
==Increase the personal exemption to $20K==

Makes you wonder why they just didn’t increase the personal exemption every time they raised the flat tax rate.

Doesn’t the Fair Tax include a child tax credit too? Surprising we don’t had that in the tax code already.

Comment by City Zen Wednesday, Sep 30, 20 @ 3:25 pm
Let’s eliminate all their deductions

Comment by Precinct Captain Wednesday, Sep 30, 20 @ 3:25 pm
https://illinoiscomptroller.gov/financial-data/find-a-report/tax-expenditure-report/fiscal-year-2018/

According to this source exemptions amount to $9.291 billion in Tax Expenditures in 2018

Comment by Unconventionalwisdom Wednesday, Sep 30, 20 @ 4:12 pm