A progressive income tax for Illinois is anything but “moral”

SHARE A progressive income tax for Illinois is anything but “moral”
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A progressive income tax will hurt the middle class, writes the chief economist for the Illinois Policy Institute. | AP file photo

The Sun-Times’ Feb. 11 editorial, ”A moral argument for the rich in Illinois paying a fairer share“ gets one thing right: It’s morally imperative to protect the middle class.

Unfortunately, a progressive income tax will do the exact opposite.

Despite claims of “fairness,” states with progressive income tax rates have seen the gap between the rich and poor increase faster than states without one.

The numbers don’t lie. A progressive tax will deliver middle-class tax hikes.

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There is no possible way Illinois can pay down billions of dollars in debt, fund new promised programs and still cut taxes for 99 percent of taxpayers. Adopting rates from Minnesota, for example, would guarantee raising the typical family’s income taxes by $864, a 24.5 percent increase.

The editorial admits the truth: a progressive tax is a money grab. It’s about “the reality that Illinois must raise billions of dollars more immediately,” as the Sun-Times put it.

The only way to ensure our middle class is protected is to stop the state from spending faster than Illinoisans are earning, and instead tackle the root causes of Illinois’ financial mess.

Illinois remains an outlier as Midwest states have lowered their taxes in recent years. Within the past five years, both Kentucky and North Carolina moved from a progressive tax to a flat tax and positive economic outcomes followed. Meanwhile, Illinois’ story is stuck on when to hike taxes and by how much. It’s no wonder our economy is sluggish and the working class is suffering.

People don’t want a progressive income tax; they want lower taxes. That won’t happen without ardent reforms — to spending.

Orphe Divounguy

Chief Economist

Illinois Policy Institute

Illinois entire tax structure hurts poor most

We appreciate the Chicago Sun-Times making a moral argument for a graduated state income tax. We believe there is one other practical point worth raising.

Illinois does not have a flat tax. Illinois has a flat income tax, but overall the state has the fifth most regressive system of state and local taxation in the nation. In Illinois, according to the Institute on Taxation and Economic Policy, the poorest 20 percent of taxpayers pay 13.2 percent of their income in state and local taxes. The middle 60 percent pay 10.9 percent of their income in state and local taxes. The wealthiest 1 percent pay just 4.6 of their income in state and local taxes.

When you include sales tax, motor fuel taxes, taxes on tobacco and alcohol — along with property tax and local taxes — we have a system that heavily taxes the poor, while leaving the wealthy relatively unscathed.

A graduated Illinois income tax is a practical way to bring our total tax system into a neutral position, let alone one in which the wealthier pay more.

Dan Johnson and James R. Anderson

Co-founders of Leaders for a Strong Economy

Chicago

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