The tax equity sought by the coalition of clergy writing in support of a graduated income tax ("Illinois tax system unjustly serves rich," April 11) can be achieved by state government without resorting to the cumbersome, expensive, time-consuming constitutional amendment process that enactment of their "Fair Tax" bill requires. The legislature already has the power to set both the nominal flat income tax rate and the point at which it begins to be levied. The higher the attachment point, the lower the effective tax rate for lower income earners -- converting a nominally flat tax rate into a graduated effective tax rate.
If the state were, for example, to exclude the first $20,000 of otherwise taxable income and set the rate at a flat 7 percent on income over it, a person or household earning $30,000 would pay only $700 (an effective tax rate of 2.33 percent), while one earning $100,000 would pay $5,600 (effective rate 5.6 percent), and one earning $500,000 would pay $33,600 (effective rate 6.72 percent). Under this system, the poorer would not only pay less tax than the richer, but they'd also pay at a meaningfully lower effective tax rate as well.
The Illinois legislature has constitutional the authority to pass any combination of these changes on any day it's in session. Gov. Pat Quinn could sign the bill into law the next day. They're unlikely to take these simple steps though, because this is an election year -- a biennial excuse for pusillanimously refusing to do their jobs for fear of losing them.