Pritzker, GOP leaders ramp up graduated tax debate after threat of 20% increase
In dueling press briefings Friday, Illinois House Republican leaders said the Pritzker administration "threatened" a big tax increase if voters don't approve a graduated tax, and Democratic Gov. J.B. Pritzker said comments by Lt. Gov. Juliana Stratton were taken out of context - but he said more tax revenue or steep cuts are reality.
House Republican Leader Jim Durkin, of Western Springs, said a 20% across-the-board income tax increase mentioned by Stratton is "just the beginning."
Stratton said on a video call Thursday if voters reject Illinois' graduated income tax proposal, then the Legislature will be compelled to consider a 20% increase for all taxpayers, the Chicago Sun-Times reported. She made the comment while speaking to a rally of supporters of the so-called Fair Tax amendment, which is on the Nov. 3 ballot.
Pritzker repeated the argument he has often made that the state of Illinois was suffering from a structural budget deficit before the pandemic, and he said there are only a certain number of ways to address that.
One, he said, would be to raise the current flat rate by a full percentage point, to 5.9%. lllinois applies a tax rate of 4.95% to all incomes. A 20% increase to that rate would bring it to 5.94%.
Another option, Pritzker said, would be to cut state spending by 15% across the board, which he said would result in large property tax increases statewide to fund public schools.
The third choice, he said, is the proposed graduated tax amendment that is on the Nov. 3 ballot and that would raise taxes on people earning more than $250,000 a year, about 3% of the state's population, while leaving tax rates the same or cutting them for the other 97%.
"The best direction that we should go to deal with this is to make sure that we're asking those who are most able to step up to pay to do so - those are the wealthiest in our state ... and that's the direction that I think we ought to go," Pritzker said.
The Illinois Constitution currently requires a flat tax. The ballot question will be whether to change that to allow for a graduated tax, in which people with higher incomes pay more.