Illinois voters must support a graduated income tax in November
Numbers don’t lie. COVID-19 has had a disastrous impact on the Illinois economy. The state had reduced its carry-over deficit from over $15 billion at the end of Gov. Bruce Rauner’s term to somewhat over $8 billion last year. Since the pandemic, revenue is way down and Illinois has had to borrow $5 billion this year to meet existing obligations. By July 1, 2021, the deficit will be over $13 billion and without new revenue it will continue to grow.
For the past 20 years, legislators of both parties have not been honest about the cost of services that citizens want. They have not told the people that we need to increase taxes to fund these services. And they borrowed from the state’s pension systems by underfunding them, thus increasing the pension debt.
Illinois has a number of alternatives. One solution could be to substantially cut services. A second would be to increase the flat tax rate from the current 4.95% to 6% or beyond. But the flat tax rate means that low wage earners pay a greater percentage of their income in taxes than those who are higher wage earners, which exacerbates racial and income inequality. Illinois is one of only a handful of states with a flat income tax.
The third alternative is to begin taxing all or part of retirement income. Such an idea is not popular, but neither are the first two options.
The proposed progressive income tax will raise taxes on only about 3% of the population, those making over $250,000. As incomes rise, this tax will generate more revenue, and so revenue has a chance of keeping pace with the increasing costs of services. Such a tax will begin, albeit slowly, to address income disparity. And the risk of future tax rate increases will be no more than already exists.
The citizens of Illinois need to support a progressive income tax or be prepared to see a substantial increase in the flat tax or a huge cut in services.
I urge you to vote “yes” for a progressive income tax in November.