Consortium organizes to battle Pritzker's graduated income tax plan

This story has been updated to clarify state Rep. David McSweeney's spending cuts proposal.

Several conservative groups are banding together along with Barrington Hills Republican state Rep. David McSweeney to fight Gov. J.B. Pritzker's graduated income tax plan.

McSweeney and representatives from the Illinois Policy Institute, Americans for Prosperity and Ideas Illinois are challenging the governor's proposed income tax revision that ultimately needs voter approval, saying the state needs to spend less before taxing more.

McSweeney argues the state should cut $3 billion out of education, pensions and Medicaid to cover much of the $3.4 billion Pritzker's plan expects to generate in new revenue.

"They say you can't touch any of that, but I think you can," McSweeney said. "We've already got the highest tax burden in the country depending on what study you're looking at. We're always somewhere between No. 1 and No. 4."

Other consortium members believe long-term spending cuts via changes to pension law, school district consolidation and addressing state workers' health care costs are better options than a graduated income tax.

Pritzker introduced the idea of a graduated income tax plan in March. He said the plan will lower or maintain 97 percent of taxpayers' current income taxes. Income would be taxed at various rates depending on how much someone earns. The proposed rates range between 4.75% and 7.85% if you make less than $1 million a year. Any taxpayers who make more than $1 million a year would pay a flat rate of 7.95%, according to Pritzker's proposal. Corporate income tax rates would also be increased.

The governor's office released a calculator on its website to allow people to find out how their taxes would change.

To be enacted, the proposal must first pass both chambers of the legislature by a three-fifths vote, leading to a referendum on whether a requirement for a flat tax is removed from the state constitution, which must be approved by 60 percent of statewide voters. Democrats have a supermajority in both the House and Senate.

Republican state Sen. Dan McConchie of Hawthorn Woods has suggested that a supermajority should be required to approve any future changes to the state's income tax.

"Otherwise, you can raise the rates on only a certain segment of taxpayers, or you can change the income brackets with just a simple majority," he said. "There's no limit to what can be done to the income tax once this is approved."

Supporters of the governor's proposal like Ralph Martire, who heads the Center for Tax and Budget Accountability, said other states' graduated income taxes haven't resulted in consistent increases. And when states change to a graduated income tax structure, there hasn't been a mass exodus of rich people leaving the state because of it, he said.

"What all these folks who oppose the graduated tax claim is this is somehow going to drive people out, and there has never been a peer-reviewed study or university analysis that has ever found a statistically meaningful correlation," Martire said. "So they're either intentionally spinning this or completely ignorant."

Pritzker's tax proposal is still being debated by legislators. It was recently passed out of a Senate committee and is headed for a full Senate vote.

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Gov. J.B. Pritzker
David McSweeney
Dan McConchie
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