Graduated income tax would give working families a fair shake

The other day, a sentence from Jane Mayer’s book “Dark Money” jumped out at me:

“Before Congress instituted the federal income tax in 1913, following the passage of the Sixteenth Amendment to the Constitution, America’s tax burden fell disproportionately on the poor.”

It makes sense once you stop to think about it. Pretty much all other government revenue sources besides income taxes — sales taxes, property taxes, liquor taxes, and so forth — fall disproportionately on lower- and middle-income people.

Therefore, in the pre-Depression era, a time when Americans were concerned about economic inequality and the growing struggles of middle-class families, the federal government instituted an income tax that asked the highest earners to pay a greater rate than the lowest earners.

Around the same time, Wisconsin became the first state to institute an income tax, and it devised the same system, charging the wealthiest people a higher rate than everyone else.

During the 20th century, almost all other states enacted income taxes, mostly following this model: to rein in economic inequality, and, because other sources of revenue disproportionately hit working families, the income tax asked higher earners to pay a higher rate.

But economic circumstances gradually changed, and by the late 1960s when Illinois was finally preparing to create its income tax, economic equality was at a high-water mark. The middle class was growing.

Against that backdrop, there wasn’t much concern about creating a fair tax system. Policymakers weren’t so worried that Illinois’ tax burden, like America’s in 1913, fell disproportionately on working families.

As a result, Illinois became one of a tiny handful of states whose constitutions prohibit a fair tax — dictating that lower- and middle-income people must pay as high a rate as the wealthiest among us.

None of our neighboring states have this in their constitutions. In fact, only three other states do. That’s why Illinois has one of the most unfair tax systems in the whole country.

On average, middle-class Illinoisans are forced to pay almost 13 percent of their income in state and local taxes. By contrast, the top 1 percent only pay around 7 percent. Illinois has a more millionaire-friendly tax system than most of our neighboring states, but we’re much tougher on the middle class.

That’s why the fight about whether to amend our Constitution to allow a fair tax is so important. It’s a fight about whether we start doing what most other states already do: create a fair income tax, and stop disproportionately burdening working families.

This brings me back to Mayer’s book, which is a scholarly and sobering study of the hidden influence of self-interested right-wing billionaires on American politics.

These same billionaires have already cranked up their noise machine to distort the debate about the fair tax. They want to change the discussion and make sure we talk about everything but the real issue.

They want to make this about whether we should blindly trust all politicians (spoiler alert: no) or whether the Illinois budget has historically been managed well (also no) or whether a single policy change will somehow magically fix each of our state’s problems while also having no downsides (you guessed it, no).

These are all perfectly interesting subjects, but they have nothing to do with the question before us. That question is simple:

Should Illinois continue to accept a tax system that disproportionately burdens working families, or should we change our Constitution to allow what the federal government and Wisconsin realized was a good idea more than a century ago and tax people fairly?

In other words, should we continue to have a tax system written for millionaires and billionaires, or should we finally give working families a fair shake? Something tells me that no amount of dark money will change the way most Illinoisans feel about that one.

Daniel Biss was a member of the Illinois Legislature from 2011 – 2019.

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