Jim Dey | Facts behind tax campaign slogans tell different tale

Jim Dey | Facts behind tax campaign slogans tell different tale

The pro- and anti-tax crowds in Illinois have never been on friendly terms, their conflicting philosophies representing a general disdain for each other.

But the ongoing battle over Gov. J.B. Pritzker's progressive income-tax hike plan has thrown gasoline on the low-level fire that always burns between them.

Just recently, two high-profile participants on the issue penned commentaries that, while making valid points, targeted their opponents with insults.

Ralph Martire, a pro-tax advocate with impeccable liberal credentials, challenged anti-tax claims that adopting a progressive income tax in Illinois would amount to a "permanent jobs tax on middle-class families."

Martire, executive director for The Center for Tax and Budget Accountability, argued the proposal would raise income taxes on the highest earners in Illinois and "is neither a tax on 'jobs,' nor a tax on the middle class."

Martire characterized arguments on behalf of the progressive tax plan as "eminently reasonable" while describing opponents' positions as "nonsensical" and "completely void in substance."

At the same time, anti-tax advocate Mark Glennon of Wirepoints authored his own commentary that called arguments on behalf of a graduated income tax "dishonest."

He focused on the claim by Think Big Illinois, a pro-amendment group, that "Illinois is in a $3.2 billion financial hole. A Fair Tax could fix that and reverse the damage."

Citing the state's $8.3 billion in unpaid bills, $134 billion in pension under-funding and annual budget deficits, Glennon argued the assertion that a new tax raising an estimated $3.4 billion a year would solve the problem is "preposterous."

"If only the hole indeed were just $3.2 billion. Most Illinoisans of any political stripe would probably be happy to pay up and call it a day to fix our fiscal crisis, no matter how the burden was distributed," Glennon wrote.

There is one area where the two writers do agree. Both acknowledge state finances are a dumpster fire, Martin calling it a "hot mess." But they disagree on the solution to the problem, each identifying vulnerabilities in opponents' claims and arguing their cause.

The arguments behind the campaign slogans serve as a reminder that voters will have to carefully consider the proposal before they vote in the November 2020 election, when the proposed amendment to the state constitution is expected to be on the ballot.

In that context, perhaps voters should examine Pritzker's claims that his amendment represents a generous tax cut for lower- and middle-income earners and a big increase for the rich.

For starters, the amendment, if passed, does nothing other than allow the Legislature to establish rising tax rates on rising levels of incomes. What those rates are would be determined later.

Pritzker has suggested some tax rates he would like to see in place. But his numbers are far heavier on the tax increase side than on the tax cut side.

Roughly 86 percent of Illinois taxpayers earn up to $100,000 a year. The tax cut for those earning up to $10,000 a year would be 0.20 percent, reducing the rate they would pay from the current 4.95 percent to 4.75 percent. Those earning between $10,001 and $100,0000 would receive a 0.05 percent cut, reducing the rate they would pay from 4.95 percent to 4.9 percent.

Those earning between $100,001 and $250,000 would continue to pay the current 4.95 percent rate.

While the tax cuts on lower earners would be negligible under Pritzker's proposal, the increases on higher earners would be dramatic — nearly 60 percent above the current rate.

Tax rates on the next three categories would jump from 4.95 percent to 7.75 percent ($250,001 to $500,000), to 7.85 percent ($500,001 to $1 million) and 7.95 percent (over $1 million).

Pritzker also has proposed two other small cuts — a 20 percent increase in property tax credits and a $100 per child tax credit.

He's billing the plan as a boon for 97 percent of taxpayers, who would pay the same or somewhat less, while he imposes a "fair tax" on the 3 percent of taxpayers who earn more than $250,000 a year.

What's fair, of course, is in the eye of the beholder. But many people have more definite ideas about what constitutes a tax cut, and few will be convinced Pritzker's much-vaunted middle-class tax cut will add up to much.

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

Sections (2):Columns, Opinion