Judge blocks restraining order against Pritzker’s graduated income tax plan
A Cook County judge on Friday denied a conservative group’s request for a temporary restraining order in its bid to block Gov. J.B. Pritzker’s graduated income tax initiative from the ballot in next month’s election.
Allies of the Democratic governor claimed it as a legal victory for what they’re pushing as the “Fair Tax,” but the right-leaning Illinois Policy Institute says its lawsuit is ongoing in the bitter battle against what the think tank insists is a tax hike.
“We are committed to prosecuting our claims in court and will continue to fight for Illinois voters’ right to fair and accurate information on the ballot and in state-issued pamphlets,” the group’s marketing vice president, Austin Berg, said in a statement. “We look forward to our next opportunity to argue on behalf of voters and retirees.”
Quentin Fulks, chairman of the “Vote Yes For Fairness” committee that’s championing the initiative, said that Friday’s decision affirmed “what we already knew to be true — the Illinois Policy Institute’s frivolous lawsuit was nothing more than a desperate and egregious stunt to try to mislead voters and trick them into thinking the Fair Tax has anything to do with retirement income.
“As the court has made clear today, the Fair Tax does not tax retirement income, and will not make it any easier to do so,” Fulks said in a statement. “We hope this ruling today settles this issue once and for all, and that opponents will stop with this outright lie.”
Three retirees are also listed as plaintiffs in the suit, which claims a pamphlet released by Illinois Secretary of State Jesse White’s contains “misleading statements” about the initiative that are intended to “conceal the threat of taxes on retirement income.”
State law — which could be changed by legislators without a constitutional amendment — currently bars taxation of retirement income. The state constitution— which is what the initiative would amend — currently decrees that the income tax “shall be at a non-graduated rate” and does not mention retirement income.
The graduated income tax battle pits the billionaire governor against a billionaire Chicago hedge fund magnate— with each claiming to be looking out for the little guy.
Pritzker has dumped $56.5 million into efforts supporting the amendment, arguing it’ll make sure the uber-wealthy such as himself pay their fair share.
Ken Griffin, for many years the richest man in Illinois, has pumped $46.7million into the fight against it, arguing that it opens the door for legislators in the fiscally mangled state to hike up taxes down the road.
If voters do approve the initiative Nov. 3, the current flat income tax rate of 4.95% for all would be thrown out in favor of rates already approved by the General Assembly, which would go into effect New Year’s Day.
The tax rate on incomes between $250,000 and $500,000 would rise to 7.75%, jump to 7.85% for incomes between $500,000 and $1 million, and further up to 7.99% for incomes over $1million.
The rate on incomes between $100,000 and $250,000 would stay the same at 4.95%. Rates would be lowered to 4.9% on incomes between $10,000 and $100,000, and lowered further to 4.75% for income up to $10,000.