DuPage might oppose graduated income tax

Some DuPage County Board members are pushing a plan to formally oppose a proposal in Springfield to replace Illinois’ flat income tax with a graduated income tax.

Opponents of the proposed change, in which those who make more money would pay a greater percentage in taxes, say DuPage residents and small business owners already are contributing their fair share to the state.

Four county board members on DuPage’s economic development committee have directed staff members to draft a resolution opposing the graduated income tax idea. The entire 18-member county board is expected to vote Tuesday on the resolution.

Board member Tonia Khouri, chairwoman of the economic development committee, said she hopes the full board approves the resolution.

“We take great pride in being very fiscally conservative,” Khouri said. “So I would hope they see this progressive tax is not good for DuPage County taxpayers.”

Illinois currently has a flat personal income tax of 5 percent. But a temporary income tax hike approved in 2011 is set to drop to 3.75 percent in 2015.

As a result, some state lawmakers are expected to push for a constitutional amendment that would tie tax rates to income. The amendment would need to be approved by voters in a statewide referendum before the graduated income tax could become a reality.

DuPage’s proposed resolution would ask state lawmakers to leave the constitution unchanged.

“Currently, there is a check and balance to tax increases,” said county board member Paul Fichtner, one of the economic development committee members who pushed for the resolution. “If the legislature wants to raise state income taxes, it has to be raised for everyone.

Supporters of a graduated income tax argue that a tax tied to income is more fair and the new rates could drop for most people.

Khouri says a graduated income tax would put “another burden” on DuPage taxpayers.

“The median household income of a DuPage County resident is $78,000,” she said. “If this tax goes through with proposals that are out there, the majority of taxpayers in DuPage County would have a tax increase.”

Fichtner said it also would have an impact on businesses.

“Because so many small businesses report their income on a personal tax return, a big unintended consequence of this proposal will be a pullback in hiring or reducing hours of current employees as the state takes more taxes from these businesses,” Fichtner said.

County board member Lauren Nowak disagrees with Fichtner and Khouri. She says she supports the graduated income tax amendment.

“If we don’t look at reforming the structural flaws in our income tax system, we’re just going to keep kicking the can down the road,” Nowak said, “because we’re not going to be able to get the revenue that we need to account for things like inflation.”

Nowak said 34 other states already have adopted a progressive income tax “and their economies are doing much better than Illinois.”