Flat tax vote will shape the state's future - and not for the better
Illinois voters will cast the most important vote of their lifetime on Nov. 3, one that will determine whether our state can make a full economic recovery following the COVID recession.
This vote is not about who will be the next president, senator or congressman; it's about whether Illinois will keep its constitutionally mandated flat tax, where everyone pays the same individual income tax rate, or whether the state will change its constitution to allow a progressive income tax, where lawmakers can tinker with tax rates and brackets as they see fit.
A yes vote on the so-called "fair tax amendment" would give corrupt Illinois politicians even more power to raise taxes and would worsen the state's job and population loss in the middle of a recession.
This proposed constitutional amendment would remove one of the last safeguards protecting Illinois citizens from having the highest tax burden in the nation. Until now, the flat tax has made it difficult for lawmakers to increase the income tax. If lawmakers want to raise it at all, they have to raise it for everyone -- an unpopular decision, politically speaking. A progressive income tax, on the other hand, allows lawmakers to tinker with rates and brackets as they see fit to choose who's taxed and who's safe. Illinois voters should think twice before voting in favor of such a system.
Gov. J.B. Pritzker has promised the amendment will lower taxes for 97 percent of Illinoisans, but this is far from a guarantee. The amendment sets no exact tax brackets or rates; it just gives state lawmakers the power to set the rates. That should be a big red flag for voters.
Illinois voters know better than to give corrupt Illinois politicians like House Speaker Mike Madigan even more power. In 2011, state politicians "temporarily" increased the state income tax to 5 percent from 3.75 percent to allegedly pay down state pension debt, which at that time was an estimated $83 billion. It's 2020, the income tax rate is 4.95 percent and the state's pension debt has grown to $261 billion. Recent history suggests that any promise of lower taxes in Illinois without spending cuts is a fallacy at best and at worst a bald-faced lie.
If the progressive income tax is allowed, Illinoisans' taxes will most likely go up. And so will taxes on millions of Illinois families and small-businesses that are barely surviving the COVID-19 recession.
Most small businesses rather than paying corporate income taxes pay business taxes on their individual income tax forms -- these are known as "pass through" businesses. The proposed progressive income tax amendment threatens to increase these taxes, creating even more uncertainty for businesses just trying to survive the COVID crisis.
Small businesses are the state's largest job creator and the businesses that have been hit hardest by the coronavirus shutdown. For their tremendous courage in keeping their doors open and paying their employees, they deserve a tax cut, not a tax hike. Yet one bill in the state legislature would increase taxes for pass-through businesses by 47 percent if the progressive income tax is approved.
Raising the taxes of small businesses now would cause more businesses to close, increase layoffs and reduce wages for their hard working employees. It would devastate Illinois families as the state tries to make an economic recovery.
We could expect these issues to accelerate Illinois' population loss. The state has lost more people this decade than any other state as residents have fled its already high tax burden. The threat of increasing taxes even further would cause more residents to Illinois for low-tax states like Indiana, Texas and Florida.
The primary people leaving the state are those under 35 years old who make over $100,000. These are entrepreneurs and job creators -- the state's best and brightest. If Illinois hopes to make a fast-economic recovery, it can't afford to lose these smart, hardworking residents.
A shrinking tax base will lead to a higher tax burden on those who are left behind. Population loss will raise taxes even more, no matter how much residents make.
Illinois voters have a choice to make this November between future prosperity or continued economic hardship. A "yes" vote on the proposed graduated income tax amendment gives corrupt Illinois politicians more power to raise your taxes. This would result in less jobs, lower wages and more businesses destroyed during a recession.
• Travis Nix (@tnix113), of Lake Zurich, is a student of tax law at Georgetown Law and a contributor to Young Voices, a nonprofit that helps young pro-liberty writers break into commentary.