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posted: 4/22/2014 5:01 AM

Progressive tax unfair to taxpayers

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  • David From

      David From

 
By David W. From

There are a lot of competing proposals swirling around Springfield to raise Illinoisans' taxes in order to perpetuate all of the things government spends money on. But who is looking out for the taxpayer?

If you pay taxes in Illinois, odds are your income tax went up by 67 percent three years ago, you pay very high property taxes (second highest in the nation), and everything you buy is hit with some of the highest sales taxes in the Midwest. At the same time, you earn less money than you did five years ago, if you even have a job in a state with the nation's third-highest unemployment rate. Who is really fighting for you, the Illinois taxpayer?

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According to a recent Gallup poll, fewer Illinoisans trust their state government than do the citizens of any other state -- and rightly so. Politicians say they are working for the taxpayers, but their recent actions belie that statement. In 2011, the Democratic leaders in Springfield passed a "temporary" income tax hike that is due to begin expiring in 2015. But just months before promised tax relief comes to all Illinois taxpayers with the partial expiration of the "temporary" income tax increase, some politicians like Gov. Pat Quinn and Speaker Mike Madigan are now telling us that it is not temporary and that it's not enough.

Legislation seeking to amend the Illinois Constitution to scrap our flat income tax and implement a graduated, or "progressive," one is also pending before the General Assembly. While touted as "fair" or "making the rich pay their fair share," the graduated income tax rate schedule proposed by its Senate sponsor, Sen. Don Harmon, a Democrat from Oak Park, would amount to a tax increase on individuals earning more than $22,000. What's fair about middle-and low-income families paying more? And Harmon's is the least progressive of the three proposed graduated rate schedules. The most progressive, an eight-bracket schedule put forth by the Center for Tax and Budget Accountability, would give Illinois one of the highest top marginal rates in the nation, tied with Hawaii and second only to California.

True enough, the proposed amendments (SJRCA 40, HJRCA 33, HJRCA 49) do not have rates attached to them. Rather, it merely asks the good people of Illinois to bless the notion of a graduated income tax, leaving the details of brackets and rates at the discretion of our chronically imprudent legislature -- the very same folks who are possibly on the brink of reneging on the promise that the last tax increase would be temporary, and on the heels of three substantial tax increase plans proposed in Springfield during this legislative session.

But we can look to both other states and the several proposed rate schedules. In 2013, nearly 90 percent of the states with a graduated income tax levied a top marginal rate on Illinois' median household income greater than the rate of 3.75 percent Illinoisans are looking forward to paying next year. In fact, the average top marginal rate among the graduated income tax states on Illinois' median household income was nearly two full percentage points higher, at 5.57 percent. Once again, Springfield is asking Illinoisans to send more money saying, "Trust us."

All of these proposals will continue the status quo that has saddled Illinois taxpayers with historic debt, high unemployment and less opportunity. Our leaders should turn their focus to pro-growth policy alternatives that will get Illinoisans working again, allowing people to support their families, start or expand businesses and even generate more tax revenue. It is in policymakers' and taxpayers' best interest that Illinois get back to being the economic engine of the Midwest. That will begin to happen when our state government seeks to increase growth and opportunity, not our tax rates.

• David W. From is the Illinois state director of Americans for Prosperity.

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