Rauner: Freeze property taxes, cut income tax, create service tax

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Republican gubernatorial nominee Bruce Rauner said he could find $600 million in new revenue by taxing select services in Illinois, but he also proposed freezing property tax rates and lowering the state income tax by 2 percentage points over four years.

In a Thursday campaign announcement, Rauner also said he wants to force all local governments to hold a referendum every time they want to raise property taxes.

Rauner also attempted to steady his position on the minimum wage, saying he would back a $10-an-hour minimum wage — only if the increase is paired with substantial business reforms.

Rauner outlined the proposals at a news conference at Quality Float Works in Schaumburg.

The campaign blueprint indicated $600 million more in revenue could be raised from taxing services such as attorneys, chartered flights, trailer parks, golf club membership fees and armored car services. Rauner proposed taxing certain services while allowing others to remain exempt, including day care centers, animal care and barber shops.

Gov. Pat Quinn’s campaign quickly blasted the plan as one that would send the state into a deeper hole than the estimated $6 billion deficit that will face the next governor. The camp also criticized the multi-millionaire candidate for proposing a sales tax expansion, saying it would hurt working families and small business.

“Only someone with nine homes would propose taxing trailer parks,” said Quinn spokeswoman Brooke Anderson.

Rauner also said that new TV ads that attack him for wanting to tax Social Security and other retirement income are false. The ads were launched Wednesday by Illinois Freedom PAC, an outside group funded by a coalition of unions that opposed Rauner in the Republican primary.

“Gov. Quinn is creating another false spin. I have never, ever said I want to tax Social Security, that’s baloney,” Rauner said. “And as you can see from our plan here, we have no plan to tax retirement income. They are trying to create a false argument.”

In a debate during the primary campaign, Rauner had said he didn’t yet have a position on whether retirement income should be taxed and that he wanted to overhaul the entire tax system in Illinois.

Rauner said he would also phase in a decrease to the state income tax, bringing it down from 5 percent to 3 percent over four years.

Quinn’s campaign blasted Rauner’s rollout on Thursday, saying it would dig Illinois into a deeper hole, creating a potential $10 billion shortfall and calling some proposals undoable and others unfair.

Quinn has said a permanent increase in the state income tax — to 5 percent — is vital to filling that gap and to provide an adequate boost education across the state.

When Rauner was asked how he would pay for education while cutting the income tax, he responded:

“We give control to local parents in the local school districts on where they want their taxes to go and where they want their budget priorities met. We need to empower local voters, local property owners, local parents.”

Rauner also said he believes there should be an expansion to the state contribution to education and said a separate plan on education was coming.

Forcing home rule state governments to back off their ability to raise taxes could take a change in the Illinois constitution. Rauner said legislation would be needed to make the change and that he would get that accomplished. The Legislature in the past has agreed to property tax caps for Cook County.

The Quinn campaign dubbed the proposed tax on services a “Rauner tax” and said his program would mean taxing small businesses. Rauner countered that his administration would not seek to extend the 67 percent income tax increase passed under Quinn. Right now, that increase will sunset next year, and lawmakers would not support an extension in the last legislative session.

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