The Illinois General Assembly has green-lighted a proposed constitutional amendment that would allow the legislature to lower income tax rates for those making less and raise rates for the wealthiest Illinoisans.
The Illinois House on Sunday approved the Senate Joint Resolution Constitutional Amendment 1 — the so-called Fair Tax Amendment — that would change the income tax structure by removing language from the Constitution requiring a flat tax, allowing for the tax to be graduated.
Illinois is one of only nine states in the country to impose a flat tax. The question of whether to amend the Constitution will now be placed on the ballot in November 2020. It will take effect if 60 percent of voters approve it.
The Illinois House voted 73-44, with the vote falling along party lines. Republicans are strongly against the measure, which they say will sending a negative message to business. Democrats said the measure will ease the tax burden on those less able to afford it.
As part of what he has been calling the Senate’s Fair Tax package, Pritzker and a group of House and Senate leaders also announced the creation of the Property Tax Relief Task Force, designed to make recommendations aimed at property tax relief.
The Property Tax Relief Task Force would be created through an amendment to the fair tax rate legislation, and the group would be required to report back to the governor and the General Assembly by Dec. 31, 2019. An initial report will be due 90 days after the law takes effect.
The Property Task Relief Task Force will be charged with using a racial and economic equity lens to identify the causes of increasingly burdensome property taxes across Illinois, review best practices in public policy strategies that create short- and long-term property tax relief for homeowners, and make recommendations to assist in the development of short- and long-term administrative, electoral, and legislative changes to create short- and long-term property tax relief for homeowners.
The group will include two appointees from the Office of the Governor, as well as members of the House and Senate appointed by their chambers’ leaders.
Here are statements issued on the latest developments
Gov. J.B. Pritzker
“For years, Illinoisans have been fighting to make our income tax system more fair to middle class families and those striving to get there, and this monumental vote in the General Assembly means that voters will have the right to decide our system for themselves in November 2020. Together, we will continue our fight to make sure that 97 percent of Illinoisans will pay the same or less in income taxes and only those making more than $250,000 pay more.
“For far too long, families across Illinois have struggled under too-high property tax burdens and an unfair income tax system that protects the wealthiest. This task force is a commonsense addition to the fair tax, which aims to protect the middle class and those striving to get there while those making $250,000 and above pay more.”
Americans for Prosperity-Illinois State Director Andrew Nelms
“We’re disappointed lawmakers are asking taxpayers for a blank check. This graduated income tax scheme would give Springfield politicians more power to increase taxes on families, small businesses, and job creators. Making matters worse, everyday Illinoisans are being left in the dark about what the tax rates would be. We thank those lawmakers who stood together with beleaguered Illinois taxpayers and voted to ‘Keep Illinois Flat.’ Voting to ask Illinoisans for a blank check and then turning their attention to other tax increases, fee increases, and the creation of a whole host of new taxes should reinforce for taxpayers that Springfield has failed in their responsibility to be good stewards for hardworking Illinoisans.”
State Rep. Monica Bristow, D-Alton
“My commitment to the people of the Metro East is and has always been to fight for lower taxes for the middle class, resources that prepare people in our community for high-wage jobs, and affordable health care. Cutting through all the spin on both sides, the truth is the middle class bears too much of a burden under our current tax system, and the Fair Tax offers modest tax relief for the vast majority of people in the Metro East. That’s an important first step. There is so much more work to be done, and I’ll continue working to strengthen the middle class by making taxes fairer, our economy stronger, and health care more affordable.”
State Rep. Katie Stuart, D-Edwardsville
“Throughout my time as state Representative, I have fought against all new tax proposals, and voted against the income tax hike that took effect in 2017, because I know that local families are being crushed by an unfair tax system. Working families in the Metro East are struggling, so I supported a Fair Tax as a necessary first step in building a stronger Illinois by building a stronger middle class.
“I supported the Fair Tax Amendment to give local families a say in whether we should continue the status quo of our regressive tax structure, or if we should address our unfair tax system, and call on millionaires and billionaires to pay their fair share.
“Instead of supporting tax hikes and other outrageous proposals like a mileage tax, I supported a Fair Tax plan that will cut taxes for 98.2 percent of families here in our local communities. The Fair Tax plan I fought for is a critical first step to help balance the state budget, invest in a growing economy that creates high-wage jobs, and move Illinois forward after four years of partisan gridlock.”
Illinois Chamber of Commerce President and CEO Todd Maisch
“The graduated income tax is a very bad idea, proposed at the wrong time. It sends the message to job creators that the General Assembly believes there will never be enough revenue to meet their appetite for spending.
“Our current flat tax provided $1.5 billion more than internally projected for April 2019. These revenues show that it is not the tax structure, but the spending structure that is the problem.
“Additionally, little notice has been given to the fact that the amendment also repeals a critical taxpayer protection: the constitutional ban of more than a single tax on income. Future general assemblies will be allowed to tax the same dollar of income over and over.
“Other states’ experiences clearly show a graduated income tax will unfairly target small businesses and, over time, more and more of the middle class. Unfortunately, with this vote, the General Assembly is sending yet another clear signal that Illinois is not open for business.”
Illinois Policy Institute CEO John Tillman
“The Illinois House voted 73-44 today to pass Senate Joint Resolution Constitutional Amendment 1, an amendment that would eliminate Illinois’ flat income tax protection, allow lawmakers to double or triple tax the same dollar earned, and open the door for the nation’s highest tax on business income.
“It is universally acknowledged that the state of Illinois is in a financial and economic crisis. What’s even worse is the crisis of confidence among our citizens.
“Perhaps the best indicator of this crisis is a recent Census report that showed Illinois losing population in every metropolitan area, including Chicago. Illinois is one of the only states to lose population every year over the past five years.
“When we first started highlighting the Illinois exodus, one person left every 10 minutes. Now, after the 2011 and 2017 tax hikes, one person is leaving every 4.6 minutes. The growing wave of Illinoisans leaving the state will become a tsunami if a progressive tax is implemented in Illinois.
“Politicians call the progressive tax ‘fair,’ but omit that it would actually mean a middle-class tax hike to pay for pensions.
“They have failed to disclose what tax rates Illinoisans will end up paying.
“They have yet to present the abundance of fiscal reforms available to fix Illinois’ perpetual budget crisis, leading the people to believe there are no alternatives to save this state.
“A multimillion-dollar fight for the future of this state begins today. But we already know everything we need to know: Income inequality remains higher in states with progressive income taxes, suggesting that progressive taxation hasn’t been any more effective at combatting rising income inequality. The gap between the rich and the poor remains unchanged regardless of whether or not a state has a progressive income tax.
“On the other hand, states without progressive income taxes and a lower income tax burden enjoy a higher living standard. They see lower unemployment rates and less inequality. It is not surprising they have been able to attract Americans from high-tax states like ours.
“For decades Illinois politicians have promised us that higher taxes, more government spending and increased debt will solve our state’s fiscal nightmare. But today our debts are higher and the state’s budget crisis is worse than ever before. No matter how much money we give the politicians, they always want more. Only the people can stop them by saying no to the progressive tax in November 2020.”
Illinois Republican Party Chairman Tim Schneider
“It’s disappointing, but not surprising, to see Democrat lawmakers decide that a blank check from Illinois taxpayers is the solution to our financial issues. It’s not surprising because it’s been their agenda for years. Raising taxes yet again and asking for more from the most overtaxed group of people in America is not a solution to our problems, it unfairly punishes taxpayers for problems they did not create. We need to reform the way we do government in Illinois before ever thinking about taking more from our hard working families.”
Illinois Federal of Teachers President Dan Montgomery
“It is an historic day in Illinois. With today’s vote to approve the Fair Tax proposal, we finally have the chance to fix our state’s broken tax system that places the burden on working families.
“By asking the wealthiest Illinoisans to pay their fair share while giving 97 percent of us some relief, Illinois will generate much-needed funding for public schools, higher education, and state services in a responsible way.
“Our schools need more resources. Our communities need reliable human services. And our students deserve the best. This Fair Tax makes all that possible.
“We are grateful to Governor Pritzker for championing this measure, and to the lawmakers who voted for the future we all deserve. In the months leading up to the next election, the IFT and our members will work tirelessly to educate our neighbors and help make the Fair Tax a reality.”