By Bob Skolnik
Thirteen months from now, Illinois voters will decide whether to amend the state's constitution to enact a graduated state income tax, which would tax higher incomes at higher rates.
On Oct. 6, former state Senator Daniel Biss, who finished second to J.B. Pritzker in the Democratic primary for governor last year, came to Riverside to make the case for the proposed amendment. The Illinois constitution mandates a flat state income tax rate, which is now set at 4.95 percent.
Biss' appearance at the Riverside Township Hall was sponsored by the Indivisible West Suburban Action League and drew a sparse crowd of only 16 people on a warm, sunny Sunday afternoon when the Chicago Bears were playing. The event was also streamed on the group's Facebook page and can be viewed there.
Now a senior fellow at Americans for Financial Reform, Biss said that a graduated, or progressive, income tax, which supporters have dubbed the "Fair Tax," is the fairest way to tackle Illinois' chronic budget problems, which include a backlog of just over $7 billion in unpaid bills.
"If we don't want middle class taxes to go up, this is the way," Biss said, noting that only those who earn more than $250,000 a year would pay more to the state than they do now.
Biss and other proponents of a graduated income tax say 97 percent of all Illinoisans would pay the same or less in state income taxes than they do now. Lindsay Morrison, a leader of Indivisible West Suburban Action League, said that 95 percent of Riversiders would pay the same or less under the rate structure the General Assembly approved.
The state's legislature has approved a plan for six tax rates ranging from 4.75 percent on the first $10,000 of income to a top rate of 7.95 percent for those whose make more than $1 million a year to go into effect if the state income tax referendum passes in November 2020.
Opponents of the amendment warn that the rate structure could be changed at any time and is not part of the proposed constitutional amendment. They say that it is just a matter of time before higher taxes hit the middle class and that higher tax rates will worsen the business climate in Illinois.
"Given Illinois' dire financial position, it's impossible for a progressive income tax to cut taxes for 97 percent of residents while paying down billions in debt and funding billions more in new spending on services," said Adam Schuster, the budget and tax research director for the Illinois Policy Institute, a libertarian-orientated think tank and advocacy group, in an email.
Biss admitted that a graduated income tax will not immediately solve all of Illinois financial problems, noting that underfunded pensions are a serious issue, but said that is a good start.
"If you change the constitution you don't fix everything, but you begin to make the problem solvable," Biss said.
Biss said that the bottom 20 percent of Illinois earners pay more than they would in any other Midwestern state. He said that poorest 20 percent of Illinoisans pay about 14 percent of their income in state and local taxes while the top 1 percent pay a little less than 8 percent.
"If you're poor you pay a greater share of your income than the rich," Biss said.
Biss said that Illinois is only one of four states in which a graduated income tax is unconstitutional. He added that the state's tax system should be a matter for the people and their elected representatives to decide and not be enshrined in the state's constitution.
Nationwide, 35 states have some form of graduated state income tax, 8 have flat-rate income taxes, and seven states have no income tax at all.
Also speaking Sunday was Jeremy Rosen, who represented the Responsible Budget Coalition, representing more than 300 organizations supporting the proposed constitutional amendment.
Rosen emphasized that groups supporting and opposing the constitutional amendment are expected to spend millions on television ads. Rosen said that the TV ads will likely balance each other out and the result could be determined by which side has the better ground game.
One purpose of the event Sunday was to begin to recruit people who will go door to door to campaign for the amendment and talk to neighbors and friends about it.
"We want to make sure people are hearing from trusted community leaders," Rosen said.