That’s right, as the headline says. The rest of the nation’s states are cheering on Illinois’ efforts to enact a progressive income tax.
That’s because they know it will be one more self-inflicted blow to our state’s economy, certain to drive dollars, jobs and families into their waiting arms.
Whether or not Illinois moves to a progressive tax will be put to voters on the Nov. 3 general election ballot. Voters will decide whether we maintain our current flat and fair income tax or allow the political class in Springfield to open the door to more tax increases under the pretense of “making the wealthy pay their fair share.”
The reality is that this proposal is intended to do just one thing: Make it easier to raise taxes on all Illinoisans.
A majority of states either impose no income tax at all, a flat tax like Illinois’ or have an effective flat tax where the highest tax rate begins on income of $25,001. Unless you believe $25,000 is rich, know that the spenders in Springfield are coming for you too, sooner or later.
Proponents of the progressive tax know something they don’t want to tell you. Taxing millionaires will in no way meet their appetite for state spending. There simply isn’t enough money at the higher income levels to satisfy their demands. Tax rates will go up and tax brackets will reach lower and lower incomes.
Proponents of the progressive tax claim their plan will raise $3.6 billion, assuming all the millionaires actually stick around to pay the tab. But Illinois’ backlog of unpaid bills is still nearly $7 billion and state pension payments are scheduled to increase by nearly $1 billion this fiscal year. Liberal think tanks routinely talk of a multibillion-dollar “structural deficit” in state finances.
Clearly, that $3.6 billion won’t go very far.
And more and more people are sure to get invited to the tax increase party.
Consider the experience of Connecticut, the last state that went down this path. Connecticut started with an effective flat tax, with all income above $10,000 taxed at 5%. But after the first tax on wealthy individuals passed in 2009, legislators decided that more revenue was needed. Just two years later, Connecticut increased taxes on all income above $50,000. From 2009 to 2015, the Connecticut legislature enacted three tax increases, leaving Connecticut with an additional five tax brackets and higher rates on all income above $50,000.
What’s more, Illinois’ progressive tax plan is not tied to any funding priorities. Not education, not property tax relief, not paying down debt or shoring up our pension system, which is the worst-funded in the nation. This plan is simply a giant bag of cash left at the Legislature’s door to do with as it pleases.
Other states already are benefiting from the outmigration of Illinoisans and their money. Illinois passing the progressive tax is exactly what they are hoping for.
Todd Maisch is president and CEO of the Illinois Chamber of Commerce.
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