HomeBudget & Tax NewsPritzker, Illinois GOP Respond to Threat of 20 Percent Tax Hike if...

Pritzker, Illinois GOP Respond to Threat of 20 Percent Tax Hike if Voters Reject Progressive Income Tax

Illinois Gov. J.B. Pritzker (D) said his second-in-command’s threat of a 20 percent income tax hike is just one of the options the state may see if voters refuse to approve a graduated income tax amendment in November.

Lt. Gov. Juliana Stratton, the final speaker of a Thursday video conference call held by supporters of the progressive income tax amendment, said Illinois lawmakers would have no other choice but to hike the state’s income tax by 20 percent if voters didn’t approve of Pritzker’s signature initiative in November.

“To adequately address the budget crisis under our current tax system, lawmakers will be forced to consider raising income taxes on all Illinois residents by at least 20 percent regardless of their level of income,” Stratton said. “We all know that our middle and low-income families cannot withstand a 20 percent tax increase and it will only serve to deepen the dramatic inequities that we already see across the state.”

Pritzker was asked about Stratton’s comments.

“There are three choices that people have,” Pritzker said. “Either you’re going see a 20 percent increase meaning one full percentage point increase in order to cover that structural deficit, by the way, that structural deficit was there under my predecessor a Republican Governor Bruce Rauner. Either that, or you’re going see a 15 percent cut in government, in our budget, which would significantly reduce education funding at the state level, increase property taxes in the state, and would reduce public funding for our safety, all of which we need to address … The best direction that we need to go is to make sure that we’re asking those who are most able to step up to pay to do so.”

Illinois Republicans pounced on the ultimatum, saying voters aren’t sold on Pritzker’s signature achievement and his administration is getting desperate.

“The intimidation and scare tactics used yesterday against Illinois citizens, employers, employees, and retirees are a clear sign of desperation by the governor, the lieutenant governor, and Speaker Mike Madigan because their tax hike amendment is failing and the election is around the corner,” said House Minority Leader Jim Durkin (R-Western Springs). “To threaten Illinois citizens, with a smile on her face, saying ‘if you don’t pass this tax amendment, we’re going to impose a 20 percent income tax increase against you. We will punish you for not following us’ speaks volumes about how this amendment is failing and Democrats are getting desperate.”

As of September 25, lawmakers haven’t filed any legislation that would explicitly raise the personal income tax rate by 20 percent.

An income tax increase of that magnitude would put the state’s income tax rate at 5.94 percent. This would also be the highest personal income tax rate in Illinois history. In 2011, lawmakers increased the income tax to 5 percent and allowed it to sunset before raising it again to 4.95 percent in 2017.

Despite knowing the pandemic would dent the state’s revenue, Pritzker enacted a $43 billion budget that relies upon bonds to cover debt and the uncertain prospect of federal aid.

If approved, the progressive income tax amendment would allow lawmakers to tax incomes at different rates, even tax the same dollar more than once via things like surcharges.

Lawmakers approved an initial plan, should the amendment pass ballot muster, to increase taxes on those earning more than $250,000 to 7.75 percent. It would scale up to 7.99 percent at income over $1 million, also retroactively taxing all lesser income at that higher rate once the filer earns that much.

 

Originally posted on The Center Square. Republished with permission.

Cole Lauterbach
Cole Lauterbach
Cole Lauterbach reports on Illinois and Arizona government and statewide issues for The Center Square. He has produced radio shows for stations in Central Illinois and created award-winning programs for Comcast SportsNet Chicago.

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