Jim Dey | For gubernatorial candidates, it's all about taxes

Jim Dey | For gubernatorial candidates, it's all about taxes

Leading Republican and Democratic candidates for governor of Illinois are running on the issue of taxes.

Gov. Bruce Rauner, the incumbent Republican, tells voters he wants to decrease the state's 4.95 percent income-tax rate, just increased last year.

"I want to make sure that taxpayers come first. ... That's why I was proud to veto (Democratic House Speaker) Mike Madigan's permanent 32 percent income tax hike and to have proposed a plan to roll it back with a $1 billion tax cut," he said.

But having just increased the state's income tax over Rauner's veto, Democrats are not about to acquiesce to a request to reduce it.

That political dynamic makes it easy for Rauner to push a nonstarter and politically appealing tax cut when the state is effectively bankrupt.

Conversely, the three leading Democratic candidates for governor — J.B. Pritzker, Daniel Biss and Chris Kennedy — support a higher state income tax. They either want to boost the current state income tax or put up for a vote a constitutional amendment authorizing higher tax rates on higher incomes.

If any of them get elected, they likely will get their way.

Democrats have been pushing a progressive tax amendment for years. They argue it's more fair to impose higher rates on higher levels of income. At the same time, they want the increased revenues progressive rates would generate.

Even as he's campaigning for his party's gubernatorial nomination, Biss, a state senator from Evanston, is sponsoring Senate Joint Resolution 16, a proposed constitutional amendment that repeals the Illinois Constitution's flat-tax mandate.

He's joined by, among others, state Sen. Kwame Raoul, a Democratic candidate for attorney general.

Another group of Illinois Senate Democrats is backing a virtually identical progressive tax amendment — Senate Joint Resolution 1. It also would bar any government entity other than the state from imposing "a tax on or measured by income." Among the sponsors is Democratic state Sen. Andy Manar of Bunker Hill.

Constitutional amendments are difficult to pass because they require three-fifths majorities in the House and Senate. The Legislature must act by May 6 for an amendment to qualify for the November ballot. To become law, voters must approve the measure by an extraordinary majority.

Those two measures have been buried in the Senate for nearly a year, inaction consistent with candidates avoiding hot-button campaign issues, like income tax increases, during an election year.

More recently, however, Democratic House members have introduced legislation as well as a proposed constitutional amendment that adds meat to the bones of a vague progressive tax plan.

In early February, state Rep. Christian Mitchell, a Chicago Democrat, introduced his version of a constitutional progressive tax amendment — House Resolution 39. It's pending before the Rules Committee.

More interesting, however, is legislation — HB 3522 — introduced by Chicago Democratic state Rep. Robert Martwick that proposes specific progressive rates.

On Feb. 14, it was sent to a subcommittee of the House Revenue and Finance Committee.

If Republicans pay any attention to Martwick's legislation, they'll realize he just handed them a club they can use in the upcoming election.

Here's why.

Democrats have argued that the proposed progressive income tax amendment is about fairness and repeatedly suggested that ordinary lower- or middle-income earners have nothing to fear from it.

Higher taxes, they have said repeatedly, will fall only on the state's "millionaires and billionaires."

By embracing a stunningly broad view of who the rich are and how much they will pay, Martwick's bill turns his own party's argument on its head.

Under the Martwick plan, an individual who earns less than $7,500 a year would pay a 4 percent state income tax rate, less than the current 4.95 rate but one-third more than the 3 percent rate in effect in 2011.

An individual earning up to $15,000 a year would pay a tax rate of 5.84 percent, almost 20 percent higher than the current 4.95 percent rate.

Individuals earning between $15,000 and $225,000 would pay a rate of 6.27 percent, about 25 percent higher than the current 4.95 percent rate.

Finally, individuals earning more than $225,000 would pay a tax rate of 7.65 percent, a 54 percent increase over the current 4.95 percent rate.

The Martwick bill is stunningly incomplete, making no reference to anything beyond single-income earners. Further, as written, it conflicts with the Illinois Constitution's flat-tax mandate.

If adopted in anything resembling its current form, Martwick's bill would have to be contingent on passage of a progressive income tax amendment.

Nonetheless, Martwick's bill reveals that if state officials want the revenue increase this bill foresees ($3.6 billion a year in new revenue, according to the Illinois Policy Institute) they will have to impose higher taxes on the largest group of income earners — lower-middle and middle-income earners.

Why? There aren't enough "millionaires and billionaires" to get the desired revenue increases.

Needless to say, regular folks in Illinois think they already pay too much, and they don't have much confidence in legislators' ability to wisely spend the tax money they collect now.

Martwick, of course, is just one legislator with one proposal, and his numbers can easily be revised. But he's a connected Democrat who put his plan in writing and introduced it as legislation. Look for the GOP to take him at his word and spread it around the electorate.

Jim Dey, a member of The News-Gazette staff, can be reached by email at jdey@news-gazette.com or by phone at 217-351-5369.

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The Gipper wrote on March 07, 2018 at 9:03 am

All Democraps wanting to increase YOUR taxes. Nothing new with this picture.

Do they ever have enough of our money? They always want to give us the crap about the rich not paying enough, but as usual, when it comes down to it, it's the working stiffs they actually want to raise taxes on.

You'd think they could try something different once in awhile.

Dogsluvtrux wrote on March 08, 2018 at 8:03 am

It is time to go...if you are able to leave Illinois, start making plans now.  There is no getting out of this finacial death spiral.


My plan was to wait a couple of years until my kids would be changing schools to make a move, but that may need to be accelerated.  Even factoring in a slightly higher state sales tax, moving to TN would be the equivalant of a $12k / yr raise for my family.  Invested at a conservative 6% return equals over $650k when its time to retire in 25 years.

You can soon add my family income to the $4.75 BILLION in AGI that has left Illinois in the past few years.