CHAMPAIGN — A progressive income tax in Illinois would have "dire economic consequences" for the state, said John Bambenek, the Republican candidate for the 52nd Illinois Senate District.
Bambenek is challenging state Sen. Mike Frerichs, D-Champaign, who has endorsed a move away from Illinois' 42-year-old flat rate income tax.
"There are always unintended consequences with this," Bambenek said Wednesday at a news conference at the Champaign Public Library with John Tillman, founder of the conservative Illinois Opportunity Project. "We're going to see more businesses leave. If you're the eighth highest-taxed state in the union and you decide to have even higher taxes, more businesses are going to look elsewhere. Less economic activity means less revenue into the state and less revenue to the state means less spending on universities and social service programs and Medicaid and pensions and on and on."
Tillman claimed the move to a progressive tax would mean an income tax increase for about 85 percent of Illinoisans.
Although no formal progressive income tax constitutional amendment has been proposed, the one getting the most discussion — including at a press conference attended by Frerichs last February — is one by Ralph Martire and the Center for Tax and Budget Accountability.
But Frerichs said Wednesday that he isn't backing Martire's proposal.
"While I support a constitutional amendment calling for a move to a progressive income tax, I did not endorse any specific rates or any specific proposal," Frerichs said. "I never stood next to Ralph Martire and said, 'I endorse this plan.'"
Martire's proposal not only calls for a progressive income tax but for a continuation of the 67 percent income tax passed in January 2011 with Frerichs' support.
"If the proposal that is on the table now is passed, if you make the tax hike permanent, that's a $6.4 billion tax increase on the people of Illinois," Tillman said. "Anybody making $5,000 or more would be subject to that. In other words, 85 percent of Illinois tax filers would be paying higher rates with the progressive tax that has been proposed."
Bambenek said the entire income tax increase should be repealed and that the progressive tax should be defeated.
The issue and others could come up again Thursday night when Frerichs and Bambenek meet at a candidate forum at the Village Mall in Danville.
"I wonder if John Bambenek also endorses John Tillman's plan to pass on the $7 billion cost of pensions to local governments," Frerichs said. "I wonder if him standing next to John Tillman today means he would vote for that $7 billion property tax shift onto local school districts."