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posted: 5/2/2014 5:01 AM

Editorial: The real tax question is on the table

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A graduated income tax in Illinois would have raised the tax rate on people making more money while lowering taxes on those who make the least.

A competing idea from Democratic House Speaker Michael Madigan had a much simpler formula: any income above $1 million would get taxed at a rate 3 percent higher than what's assessed below that threshold.

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Seems like everyone wants to tinker with how taxes are apportioned in Illinois.

But that's not where the current focus should be, and that's why we're happy both plans apparently have met their deaths after they failed to garner the legislative support needed to move forward.

It's not that we necessarily object to the proposals on their merits. It's possible the graduated tax introduced by state Sen. Don Harmon, an Oak Park Democrat, at least could turn out to be a sensible component in revamping Illinois' taxing structure.

But the dueling proposals were meant to mask the real issue: How much in taxes should Illinois residents pay? The tax proposals were a disguised dodge around that sticking point, designed to bring in more revenue without Democrats immediately having to vote on the central issue.

Left on the table is a straightforward choice: Let the flat personal income tax drop back to 3.75 percent Jan. 1, making a big dent in state revenue, or prolong the "temporary" 5 percent rate set in 2011. Corporate income taxes are higher, but also set to drop Jan. 1 unless lawmakers act to extend the current rate.

Lawmakers should deal with that question in a sincere manner, without using a shake-up of the tax code or euphemisms like "tax fairness" to obscure a debate about a tax hike.

Of course, it's an election year. Gov. Pat Quinn is staking his political future on being able to convince lawmakers and voters that keeping the 5 percent income tax rate, sweetened with a property tax credit for some homeowners, would avert budgetary disaster.

With one month to pass a state budget that goes into effect July 1, Quinn hasn't convinced us yet. We're concerned by news this week that House Democrats have begun crafting a budget based on continuation of the 5 percent tax rate, as well as one that assumes the tax rate will drop as the law requires.

While we're at it, we'll go on record in advance against any attempts at a partial-year budget meant to run the government until after the November election, when a legislature made up of lame ducks and others who wouldn't face an imminent election could vote to keep the 5 percent tax rate with less fear of repercussions.

Of course, the graduated tax might never resurface outside of the context of a budget crisis. That's how things get done in a state with an abundances of crises. That situation also needs to change. If revamping Illinois' tax code is a major concern, lawmakers need to figure out how to do it in a way that isn't -- or doesn't have the appearance of -- a money grab in masquerade.

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