Hynes plan: Let voters decide tax on new income tax structure
SPRINGFIELD - The race to claim the Democratic nomination for governor is likely to be a contest over which tax increase voters like more.
There's Gov. Pat Quinn's call for a 50 percent increase in the 3 percent income tax for all taxpayers.
And now there's Dan Hynes' push to do away with that flat-tax rate and impose higher rates as people make more, starting with incomes that top $200,000 a year.
"It sure beats jacking up everyone's income tax by 50 percent," Hynes told reporters in touting his plan over Quinn's. Those making $1 million annually would see a 7.5 percent tax rate, the highest in Hynes' proposal.
Hynes unveiled his tax plan - which like his candidacy needs voters' approval - Wednesday in formally announcing his bid for governor. Hynes, 41, of Chicago, has served three terms as the state's comptroller.
Quinn proposed his tax increase in his budget speech earlier this year and then backed a couple of versions of it during lawmakers' spring session. The 60-year-old Chicago Democrat ascended from lieutenant governor to governor in January following the impeachment and ouster of Rod Blagojevich.
Both tax plans seek to come up with billions of additional dollars needed to wipe out a massive state budget deficit.
A Quinn campaign spokesman criticized Hynes' plan as too slow and too little and "not exactly the visionary leadership" the Hynes' supporters have said he'd bring to the campaign. Spokesman John Kupper questioned the ability to turn around a budget based on a constitutional amendment that wouldn't go before voters until late next year.
"In that sense I think this was more of a budget proposed for a campaign event than it was a serious attempt to deal with the fiscal realities facing Illinois," Kupper said.
Hynes' plan hinges on voters approving a constitutional amendment allowing the flat-tax system to be replaced. He'd like that referendum to take place next November at the same time voters go to the polls to pick a governor and numerous other state and federal offices.
Of the 40 states with an income tax, Illinois is one of only seven that impose a flat rate on all taxpayers. Indiana similarly has a flat, 3.4 percent income tax rate. Wisconsin has four tax brackets ranging from 4.6 percent to 6.75 percent, Iowa's tax rates cover nine brackets ranging from 0.36 percent to 8.98 percent, and Missouri's 10 income tax brackets range from a low of 1.5 percent to a high of 6 percent.
Quinn's plan doesn't require a constitutional amendment but needs to support from lawmakers.
One thing both plans have in common is that they've recently been rejected.
Quinn's tax plan failed to pass the Democratic-controlled Illinois House this spring. He backed a temporary 50 percent tax increase as a budget fix.
A plan similar to Hynes' was voted down last year in the House as well. Republicans called it class warfare and blocked efforts to get it on the 2008 ballot.
In addition to Hynes' income tax increase, his budget plan calls for imposing the sales tax on luxury services such as Botox, hiking the cigarette tax by $1 per pack, cutting back state spending to 2005 levels, adding up to three new casinos, raising gambling taxes and eliminating high-priced bureaucrats carried over from the Blagojevich administration. Several of those components, however, have failed to gain traction with lawmakers in recent years.
Quinn also supported a plan that taxed services but it stalled in the Illinois House after clearing the state Senate. Quinn has long opposed gambling but recently changed his stance and signed a law allowing video gambling in bars because the money is supposed to help finance billions in construction statewide.
In a line destined to be repeated throughout the campaign, Hynes claims the lingering budget deficit is the result of a leadership deficit in Springfield. "I'm running to fill it," he said.
Hynes is the top rival to so far emerge on the Democratic side to take on Quinn. Officially neither is a candidate at this point as nominating petitions needed to get on the ballot aren't due to the state elections board until November. There are numerous Republicans considering running for governor including Palatine state Sen. Matt Murphy, Hinsdale state Sen. Kirk Dillard, DuPage County Board Chairman Bob Schillerstrom, Bloomington state Sen. Bill Brady, and GOP consultant Dan Proft of Wheaton.
Their campaigns have largely criticized Democrats' tax policies, and the GOP was quick to pounce on Hynes' proposal.
"Mr. Hynes wants to distinguish himself from Gov. Pat Quinn. But Mr. Hynes' biggest problem with his opponent is that the governor hasn't raised taxes high enough," Proft said.
The primary election is in February.