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Column

GUEST COLUMN: Three arguments against the progressive income tax

Brian Stewart
Brian Stewart

Well, it happened. The Illinois Senate voted to approve a constitutional amendment to authorize a progressive income tax. It’s in the House now, and we’ll have to see how that shakes out.

I’m sure many of you could guess that I voted “no.” I want to thank the hundreds of people who sent emails or called my offices in Springfield, Dixon, or Freeport. Now the fight moves over to the Illinois House. Be sure to call your representative, and the offices of the representatives who are on the fence. History tells us that The Machine will hit pause when enough people raise their voices.

I’d like to share three of the reasons I voted “no” on the progressive tax amendment. First, the progressive tax amendment has nothing to do with protecting working-class families. In 2018, then gubernatorial candidate J.B. Pritzker promised that a progressive tax system would not raise taxes on 98 percent of people in Illinois. In his budget address earlier this year, Pritzker told us, “Workers deserve an income tax cut and a property tax break.”

Two years ago, income taxes increased 32 percent for waitresses and waiters, gas station attendants and call center operators, business owners and construction workers, and everyone else in the state. The progressive tax amendment does nothing to restore tax rates for working families to 2017 levels. It does nothing to make sure The Machine’s tax man doesn’t take even more money from the middle class down the road.

And the governor all but walked back his promise to cut your taxes. A few weeks ago, he told ABC 7, “As you know, we currently live in a system in which the taxes can be changed at any moment, so there’s certainly no guarantees.”

Other states

We could have had guarantees. They could have been added to the amendment, and despite numerous calls for the Senate to do so, they weren’t. While we can guess, we still don’t know why.

Here’s what we do know:

Data from the Tax Foundation notes that over the last 20 years, states with flat taxes have reduced taxes 21 times and increased them only four times – two of those four increases happening in Illinois. Over the same period of time in states with graduated income tax structures, brackets have shifted leading to 24 income tax increases.

Here’s how you sell a progressive tax – by promising it will soak the rich and cut taxes for working families. Middle class voters in Connecticut were sold that line in 1996, when they became the first state in more than 30 years to implement a progressive tax.

What happened? Income taxes for working families in Connecticut have increased 13 percent, while property taxes have increased 35 percent. Surely, the new revenue meant the state was in a better financial position and was able to incentivize business growth, right? Wrong. Connecticut’s economy lost $10 billion and more than 360,000 workers lost their jobs, while the state has run budget deficits 12 times in the past 15 years.

What property
tax freeze?

Now there are some folks who will want me to tell you about the property tax “freeze” that the Senate passed along with the progressive tax amendment. I put freeze in quotation marks because it doesn’t mean your property taxes won’t go up. It only applies to school district property taxes. And it has loopholes for school districts to increase property taxes when the schools’ state mandates aren’t funded by the state. While the new formula has sent more money to schools that need it, they haven’t sent enough to cover the existing mandates, much less any new ones. Another major loophole is the exclusion of debt and pension payments from the property tax freeze.

Second, it’s clear that the “return to bipartisanship” is subjective. Republicans in the Senate filed legislation requiring any new progressive tax legislation receive a two-thirds majority vote. It didn’t even get assigned to a committee. Republicans called for the rates to be guaranteed for low- and middle-income workers. That’s not bipartisanship.

Cut spending
to fix revenues

Last, the progressive tax amendment doesn’t give us a choice about how to solve our revenue problem. It presents us with a choice about how we are governed. The Senate also passed its own tax rates with Senate Bill 687. This bill increases taxes on the top bracket and lowers the bracket by $250,000 for single filers. Even with the increase, it still falls $175 million short of our budget deficit. Their own tax rates do not fill the gap.

As I’ve said many times, we cannot begin to address our revenue problem if we do not address our spending problem and reform government. I’m not alone in this analysis.

I have spoken to you of the taxes (some corporations) pay, and that leads me to the consideration of the taxes all of us pay toward the cost of government of all kinds. For 3 years, I have been preaching that government costs too much. The wastefulness, the inefficiency, the unnecessary functions and the overlapping constitute a vast charge upon our credit system that is not necessary for proper government. Here, too, we need a program – a program not merely of deep cost cuts, but of extensive reorganization, based on a comprehensive picture of all government.

It seems that our country’s situation in 1932 was similar to Illinois’ situation today, and I agree with Franklin D. Roosevelt – we need to reform our government.

State Sen. Brian Stewart, R-Freeport, represents the 45th District. He can be contacted via email at his website at senatorstewart.com.

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