Pritzker’s income tax battle heats up with warnings of tax hikes, verbal exchange of ‘scare tactics’ vs. ‘a number of lies’

The debate over Gov. J.B. Pritzker’s top November election priority shifted into high gear Friday as the Democratic governor warned that rejecting his graduated income tax proposal would mean either steep budget cuts or a 20% income tax increase for all taxpayers.

House Republican Leader Jim Durkin, R-Western Springs, said Pritzker and the Democrats have resorted to “intimidation and scare tactics” to pitch the proposal, which they said offers no prospect for financial reform or spending cuts.

The Pritzker administration’s new emphasis on the threat of an across-the-board tax increase in the discussion of the governor’s coveted “Fair Tax” amendment sparked a verbal duel Friday between Pritzker and Republicans opposed to his proposal to allow different tax rates for different income groups.

Pritzker pushed back, calling the arguments from Republican leaders “a lie.”

“They’ve perpetuated a number of lies here,” Pritzker said. “There’s nothing different after this amendment other than that wealthier people can pay more and middle-class, working-class people can pay less.”

The governor added that Republican lawmakers “have not proposed anything” of their own in terms of income tax reform.

“They’re the ones that are proposing annihilating the working class and the middle class in Illinois because they have no solutions,” Pritzker said.

The flurry of warnings and rhetoric came after Lt. Gov. Juliana Stratton’s public warning of the potential 20% tax increase on Thursday.

Stratton said on a video call Thursday if voters reject Illinois’ graduated income tax proposal, then the Legislature will be compelled to consider a 20% increase for all taxpayers. She made the comment while speaking to a rally of supporters of the so-called Fair Tax amendment, which is on the Nov. 3 ballot.

“To adequately address the budget crisis under our current tax system, lawmakers will be forced to consider raising income taxes on all Illinois residents by at least 20% regardless of their level of income,” Stratton said in the video, which the Vote Yes for Fairness group posted on Facebook.

Anthony Vazquez/Sun-Times file

“We all know that our middle- and lower-income families cannot withstand a 20% tax increase, and it will only serve to deepen the dramatic inequities that we already see across the state,” the lieutenant governor said.

Pritzker has previously warned if voters reject the amendment, the state, facing budget deficits worsened by the pandemic, will be forced to consider dramatic cuts. Stratton’s scenario of a 20% tax increase as the most likely alternative appeared to mark a new tack in the administration’s push for the change.

Addressing reporters at an unrelated news conference in Englewood Friday, Pritzker said the state’s “structural deficit” has left Illinois voters with three choices: swallow a 20% across-the-board tax increase; accept a 15% cut in state government that would reduce education and public safety funding; or vote to pass the graduated income tax amendment.

“To cover that structural deficit … under a flat-tax system would mean that kind of an increase,” Pritzker said. “And I do not think that’s the right way to go.”

Durkin, at a hastily arranged video call with reporters just before Pritzker’s event, accused Democrats of threatening a tax increase “with a smile on their face.”

“The intimidation and scare tactics against Illinois citizens — employers, employees, retirees — are a clear sign of desperation” from the governor and House Speaker Michael Madigan, Durkin said. “This is just more money for Democrats to spend based on their own whims of the day.”

Screen image from BlueRoomStream.

Deputy Minority Leader Tom Demmer, R-Dixon, accused Democrats of pushing a “false choice” of tax increases without offering meaningful financial reforms.

lllinois applies a tax rate of 4.95% to all incomes. A 20% increase would bring it to 5.94%.

New graduated rates are not spelled out in the proposed amendment, but the Legislature has adopted rates that would apply if the amendment is ratified. Pritzker has said 97% of all taxpayers would see no change or some relief.

Rates higher than 4.95% would apply to incomes greater than $250,000 a year. Those making less than $100,000 a year would pay a slightly lower rate.

Illinois is one of nine states with a flat income tax, according to the Federation of Tax Administrators. Its data show nine other states don’t tax earned income, while the rest vary their rates so higher earners pay a higher percentage rate.

The issue has caused a pitched battle in TV ads, with Pritzker pouring $56.5 million of his family fortune into the Vote Yes for Fairness campaign, while hedge fund mogul Ken Griffin has backed the opposition with $20 million. Opponents label the proposal the “blank check” amendment and contend voters should not trust Democrats to provide middle-income tax relief.

While Stratton’s comments brought new attention to the issue, proponents of the graduated income tax openly have argued that if the amendment is voted down, the cash-strapped state could be forced to raise income taxes across the board.