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Millionaire tax proposal advances

Published: Friday, March 28, 2014 1:15 a.m. CDT
Caption
(AP)
Illinois Speaker of the House Michael Madigan, D-Chicago, speaks to lawmakers during a House Revenue and Finance committee hearing at the Illinois State Capitol Thursday in Springfield. Madigan is proposing to place an additional tax on millionaires in Illinois.

SPRINGFIELD (AP) – The day after Illinois Gov. Pat Quinn called for making Illinois’ temporary income tax increase permanent, a proposal to impose an additional tax on millionaires was sent to the House floor Thursday.

The House Revenue and Finance Committee’s 6-4 vote in favor of the Democratic House Speaker Michael Madigan’s proposed constitutional amendment came along party lines, an indication that a tax policy debate will ramp up at the state Capitol this spring ahead of November’s general election.

The proposal would tack a 3 percent surcharge onto income of $1 million, which Madigan says would raise $1 billion a year for elementary and secondary education – about $550 per student. The money would be distributed to the state’s public schools based on the number of students they serve.

His plan comes as the governor’s race is heating up between Republican candidate Bruce Rauner, a wealthy private-equity investor, and Quinn, the Chicago Democrat. They’ve presented starkly contrasting visions of how to fix the lagging economy and improve state finances.

Madigan, who also doubles as the state’s Democratic Party chair, says Illinois’ wealthiest residents “are better equipped than others to support education.”

Quinn hasn’t said outright if he supports the plan, but told reporters Thursday that lawmakers should take a careful look.

“I’m happy to hear that it passed committee ... It’s a good opportunity for the Legislature to examine that issue,” he said.

Republicans pushed back against Madigan during the committee meeting, arguing the proposal would unfairly penalize Illinois’ most successful residents.

“The state of Illinois has a difficulty convincing the job creators, the people who take the risks to start companies and create jobs that Illinois is ... friendly place for them,” state Rep. David Harris, an Arlington Heights Republican, said. “Those folks who start businesses and hope to become millionaires are saying, ‘Illinois is not a place I want to be.’”

Illinois Manufacturers’ Association President Greg Baise told the panel that the amendment was “bad policy and bad form.”

The amendment must be approved by a supermajority in both chambers of the Legislature before securing a spot on the November ballot, where voters would decide whether to change the constitution that currently calls for taxing all income at the same “flat” rate.

Also Thursday, the committee also voted down Urbana Democratic state Rep. Naomi Jakobsson’s plan to place a constitutional amendment on the ballot that calls for a graduated tax system. While a similar amendment sponsored by Democratic state Rep. Don Harmon of Oak Park is gathering momentum in the Senate, the panel’s move made it clear the House isn’t ready to support such a proposal.

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The legislation is HJRCA51

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Associated Press writer Sophia Tareen in Chicago contributed to this report.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
 

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