Supported by key public sector unions, a petition campaign called ‘A Better Illinois’ seeks to change the Illinois income tax system so that it is a graduated progressive tax (similar to our federal income taxes). Unions are supporting this change because the current flat tax of 5% for all Illinois residents is underfunding our schools, programs for the working poor, and worker retirements, and is also unfair to working people.
There is more information on the A Better Illinois website (http:/abetterillinois.org), and there’s a page on their website where you can sign the petition. Here are some points, in addition to what you might read on the “A Better Illinois” website.
Some Key Points
— 34 states currently have a progressive income tax, which is what this petition wants our state constitution to allow. The Federal income tax system already uses such a system, by which people who make more money pay a higher percentage in taxes.
—It has been estimated by the Illinois Education Association that a progressive system would decrease taxes for 94% of Illinois residents.
—The current problem with our pensions is a revenue problem, not a spending problem. The state is starved for funds. A large part of this problem is due to the current tax flat tax structure, with some not paying their proportionate share.
—If nothing is done, the 5% flat rate passed a few years ago will revert back to the 3% rate. Schools and our pensions will take further hits.
—When including all forms of taxes, the people who make the least amount of money pay the most as a percentage of their overall income. A progressive income tax will be fairer to people at the bottom of the income scale.
As the Democrats rolled out a proposal for yet another multibillion dollar tax increase, in the form of a progressive income tax, for the State of Illinois, these are the realities facing families in Illinois:
· Unemployment is nearly two-percentage points higher than the national average
· Illinois has one of the highest property tax burdens in the country
· The median household income has declined by over 9% in the past three years
· Just over two years ago, the Democrat-led General Assembly passed the largest tax hike in the history of Illinois, promising to pay down unpaid state bills and get Illinois finances in order. Yet, despite record state tax record state revenue, there is still $7.5 billion in unpaid state bills and a $97 billion unfunded pension liability.
Democrats now expect taxpayers to swallow a plan that that will not only make thetemporary 2011 tax hike permanent, but also swap out Illinois’ constitutionally protected flat-rate income tax for a progressive income tax.
According to the Center for Tax and Budget Accountability, this plan will raise the marginal tax rate on 85% of taxpayers. It will raise tax rates for every family earning over $5,000 per year above the 3.75% rate they were promised after the passage of the “temporary” income tax hike. Then, if a household earns more than $100,000 annually, their taxes will continue to increase above the existing (already increased) 5% rate. A family earning $100,000 -$150,000 annually – hardly wealthy – would see their tax rate increase by 50% up to 75% under this plan. That is a 150% increase in that family’s state income taxes since 2011.
The truth is 31 of the 34 progressive tax states levy a higher marginal tax rate on $50,000 in household income than Illinois will in 2015. That’s not simply “taxing the rich” or making “the 1% pay its “fair-share,” it is raising taxes AGAIN on the middle class.
David From, Illinois State Director of Americans for Prosperity, states, “The adoption of a progressive tax will threaten Illinois’ prosperity by giving politicians free reign to engage in class warfare of the type seen at the federal level and in states such as California, further destroying job creation and incentivizing the flight of businesses to more friendly states. As Illinois considers this change, our neighboring states, Indiana, Wisconsin and Iowa are debating tax cuts and finding ways to lower the tax burden on their residents.”
The reality is, taxes and tax policy matters. Iowa, Indiana and Wisconsin do not have growing populations because of their sports teams and theater districts. Bad policies are overcoming Illinois’ competitive advantages in transportation, natural resources and work force. The 2011 income tax increase has proven to be a job killer.
Quoting right-wing sources content with the current unfair regressive tax burden on working people, Diane Benjamin spreads misinformation on progressive taxation. We should have the right to decide our system of taxation, and the petition campaign puts that choice to the voters.