Poll shows support for progressive state income tax in Illinois

From Illinois Business Journal news services

Three-fourths of registered voters in Illinois would support a 3 percent “millionaires’ tax” on income above $1 million, according to the latest release from a statewide poll by the Paul Simon Public Policy Institute at Southern Illinois University Carbondale.

Further, two-thirds would support a constitutional amendment to impose a graduated, progressive state income tax to replace the state’s current “flat” tax structure.

However, these tax policies would require amending the state constitution — a difficult proposition while a number of other measures, which could be instituted by legislation, face less favorable political winds.

The statewide poll of 1,000 registered voters was conducted Feb. 28 – March 10 by the Paul Simon Public Policy Institute at Southern Illinois University Carbondale. The survey has margin for error of plus or minus 3 percentage points. The live-interview survey’s sample included 30 percent cell-phone respondents.

“The results of this survey don’t reveal a magic bullet for raising revenues to fix the budget gap,” said Charlie Leonard, a Paul Simon Institute visiting professor who helped supervise the poll. “The so-called millionaires’ tax and the graduated income tax system are widely popular, and would bring in significant revenue, but they would require a constitutional amendment.”

The survey also found:

*Illinois voters are evenly divided on the question of expanding the list of services subject to the state sales tax. There are 48.3 percent who favor this idea and 47.4 percent opposed. There are 4.3 percent who don’t know.

*A majority of respondents (53.4 percent) said they would favor or strongly favor expansion of legalized gambling. A plurality (48.3 percent) said they favored or strongly favored an expansion of the sales tax to cover services as well as goods, virtually tied with opposition to the measure (47.4 percent).

“Expanded gambling has majority support, but it would not significantly fill the hole—and gambling brings with it social ills that might offset some of its benefits,” Leonard said. “The rest of the items would be a tough sell to voters. The sales tax expansion might have the best hope.”

*Only about a third of respondents (34.6 percent) favored or strongly favored a proposal to restore the recently expired temporary state income tax increase from 3.75 percent to 5 percent.

*Even fewer respondents (23.8 percent) favored or strongly favored taxing retirement income. However, in a follow-up question asked of those who opposed the measure, an additional 45.7 percent said they would favor taxing retirement income if it was restricted only to income above $50,000.

But, Leonard said, “If we add the percent who favored taxing retirement in the first question to those who, in the follow-up question, favored taxing retirement income above $50,000, we get a majority favoring taxing retirement income at some level.”

*Least popular was a proposed 10 cent per gallon tax on gasoline (26.1 percent favor or strongly favor). A gas tax has been proposed as a solution to Illinois’ infrastructure needs, and some have suggested that when gas prices are low, voters might accept a gas tax, though this result suggests otherwise.

Partisan differences in support of revenue enhancement

As might be expected, these proposals to enhance revenue meet with different receptions, depending upon respondents’ politics. For example, clear majorities of Democrats (86.4 percent) and Independents (72.1 percent) favored the so-called millionaires’ tax, compared with a smaller majority (63.6 percent) of Republicans.

Also, almost eight Democrats in 10 (79.9 percent) favored or strongly favored the proposal to create a graduated income tax structure, compared with two-thirds (65.3 percent) of Independents and just half (50.3 percent) of Republicans.

There was less partisan variation in response to the proposal to expand the sales tax to cover services. Half (50.2 percent) of Democrats and Republicans (50.7 percent) favored or strongly favored this proposal, as opposed to 46.3 percent of Independents.

Similarly, majorities in each group favored or strongly favored an expansion of legalized gambling: 54.1 percent for Democrats, 54.4 percent for Independents, and 50.3 percent among Republicans.

Applying the income tax to retirement income—before an income threshold is introduced—was unpopular across the board, favored by only 28.1 percent of Democrats, 21.6 percent of Republicans, and 16.3 percent of Independents. Among opponents of this idea, taxing retirement income only above $50,000 raised favorability to 50.2 percent of Democrats, 40 percent of Independents, and 43.9 percent of Republicans.

Restoring the income tax rate to 5 percent did not even reach half among Democrats (45.2 percent), and did even worse among Independents (27.9 percent) and Republicans (24.7 percent).

Only about a third of Democrats (34 percent) favored a ten-cent-per-gallon tax on gasoline, followed by a quarter of Independents (25.2 percent) and even fewer Republicans (17.8 percent).

“The state faces a current budget shortfall so the millionaire’s tax or a progressive income tax isn’t going to help because they’d take a long time to enact,” said David Yepsen, director of the Institute. “Policy makers might have better luck with voters by expanding the base of the sales tax or taxing retirement income on people earning more than $50,000 year or expanding gambling. However those three ideas wouldn’t raise enough to plug the entire gap.”

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The Simon Institute Poll interviewed 1,000 registered voters across Illinois. It has a margin of error of plus or minus 3 percentage points at the 95 percent confidence level. This means that if we were to conduct the survey 100 times, in 95 of those instances the results would vary by no more than plus or minus 3 points from the results obtained here.

Live telephone interviews were conducted by Customer Research International of San Marcos, Texas. Cell phone interviews accounted for 30 percent of the sample. The survey was paid for with non-tax dollars from the Institute’s endowment fund. Crosstabs for the referenced questions will be on the Institute’s web site, paulsimoninstitute.org, or directly at www.simonpoll.org.