TAX BATTLE RESUMES
Pritzker’s push for ballot initiative on graduated rates to be met by opposition ads
Bankrolled by an astounding $51.5 million contribution from Gov. J.B. Pritzker, a committee pushing a graduated income tax ballot initiative launched a series of digital ads on Tuesday — just as an opposing group announced grass-roots efforts to fight the tax change that would pound high-income earners in the state.
The high-stakes awareness campaigns come four months before voters will decide whether the state changes its income tax rates to more heavily tax those who make over $250,000.
To Pritzker, a billionaire whose own income will be impacted by a change in the income tax structure, the progressive income tax has been a focal point since even before he took office.
To the business community and to millionaires and Pritzker’s fellow billionaires in the state, a bump in the tax rate will take up a big chunk of their earnings. And that personal financial hit is worth fighting against.
They also claim there’s no reason to trust Democrats with tax changes, arguing the proposal opens the door to further upticks to pay off the state’s massive debts.
The messaging isn’t as simple as one would think. Voters are typically leery of tax changes and math questions on a ballot — even if 97% of taxpayers will see either no change to their taxes or a slight dip, according to Pritzker and the pro-“Fair Tax” group.
With the COVID-19 pandemic grinding much of everyday life to a halt in 2020, the groups have the benefit of reaching out to taxpayers via television and Internet ads in an unprecedented setting that has millions of people working from home and glued to their screens.
Via Facebook, Hulu, YouTube and several news sites, Vote Yes for Fairness is launching seven digital ads on Tuesday. Most are short and to the point, arguing that the tax change is “fair” and will help 97% of taxpayers. One 15-second ad specifically speaks to essential workers: “It’s not fair to force our essential workers to pay the same tax rate as millionaires and billionaires,” the ad reads.
Under the proposed change, incomes between $250,000 and $500,000 would be taxed 7.75%. It would maintain the current tax rate of 4.95% on incomes between $100,000 and $250,000. Income from $500,000 to $1 million would be taxed 7.85%, while income over $1 million would be taxed 7.99%. For those earning incomes of $100,000 or less, the rate would dip down to 4.9%.
Pritzker’s own net worth was estimated at $3.4 billion last year. He and his wife reported $5.5 million in taxable income for 2018. Trusts benefiting the Prtitzkers paid $5.3 million in Illinois taxes at a rate of 6.45% and $29 million in federal taxes.
The pro-graduated income tax group did not specify how much it was spending on the ads but confirmed that the committee will be doling out money for TV ads ahead of the November election. The digital ads will also be running full steam until the election.
Pritzker on June 26 contributed $51.5 million to the Vote Yes for Fairness committee, according to campaign finance records. He previously kicked in $5 million in December. Pritzker donated a record-setting $171.5 million to his own gubernatorial campaign.
Vote Yes for Fairness spokeswoman Lara Sisselman said the ads are not in response to critical TV ads paid for by the dark money group, Illinois Rising Action. She said efforts by her group have been stalled by the pandemic.
“We felt the most important thing we could do as an organization was get information out to Illinoisans on the resources out there and safety precautions they should be taking,” Sisselman said. “If you take a look at our social media channels, you’ll see the overwhelming majority was COVID-focused over the last 4 months.”
The group also launched IllinoisVotes2020.com and IllinoisVota2020.com to encourage voters to vote-by-mail in November.
“VBM [vote-by-mail] is a key part of our campaign, and this site was the start of our efforts, which will eventually include spending across digital platforms,” Sisselman said.
On the other side of the issue, the Vote No on the Progressive Tax Coalition planned to hold four news conferences across the state on Tuesday to announce its grass-roots plans to get its message out. The Illinois Chamber of Commerce and other pro-business groups are scheduled to participate.
The group is also using the pandemic as a messaging strategy.
“Illinoisans are overtaxed. Families, workers, seniors, and small business owners struggle under the weight of the highest overall tax burden in the entire country. Now politicians in Springfield want to raise our taxes yet again with a progressive tax that will do nothing to address sky-high property taxes, will cost Illinois even more jobs and hurt workers, and will end up raising taxes on the middle class and the working poor,” the group said in a statement ahead of Tuesday’s news conferences. “Illinoisans can’t afford another tax hike, especially as working families and small businesses struggle to recover from COVID-19.”
If voters approve the constitutional amendment, the new tax rates would go into effect Jan. 1, 2021.
Gov. J.B. Pritzker (left) gives his daily update on the coronavirus in March; at right is Todd Maisch, president and CEO of the Illinois Chamber of Commerce.