By CARL GREEN
Would boost taxes on rich, cut middle-class taxes
Springfield, IL – The Illinois AFL-CIO and AFSCME have endorsed Illinois Gov. J.B. Pritzker’s Fair Tax plan, which has passed the Illinois Senate on a party-line vote.
“Under Governor Pritzker’s fair tax plan, millionaires would pay more while working people pay less,” said Roberta Lynch, executive director of AFSCME Council 31. “Public services and schools would get needed reinvestment and the state could pay its bills.
“Raising needed revenue from those who can afford to pay a little more –while cutting or keeping taxes low for 97 percent of filers – is the fair tax reform that’s long overdue in Illinois.”
The Senate vote was 40-19, with all Democrats voting to advance the measure, and all Republicans voting no, showing once again the GOP’s fierce determination to protect their wealthy donors.
The legislation now moves to the House, where approval would place it on the 2020 general election ballot for voters to decide. The House vote is expected to be close, particularly among members representing more conservative districts. Assuming all House Republicans vote no, at least 71 of 74 House Democrats will need to approve the plan for the measure to make it to the ballot.
Illinois is one of only eight states still saddled with a flat tax, under which the wealthiest billionaires pay income taxes at the same rate as the poorest hourly earners.
As a result – after calculating the impact of property taxes and other local taxes – the lowest-income earners in Illinois pay the highest percentage of their income in taxes, while the richest pay the lowest.
At least 60 percent of voters participating in next November’s general election will have to approve the plan for the Fair Tax to be enacted.
OTHER UNION ENDORSEMENTS
The Fair Tax plan also has been endorsed by the Illinois Federation of Teachers (IFT), Illinois Education Association (IEA) and the Illinois State Council of Service Employees International Union (SEIU).
Tom Balanoff, president of the SEIU State Council, said the time has come for a change.
“Illinois’ current tax code puts undue burden on the working people of our state, making it harder for them to put food on the table for their families and get ahead,” he said.
“The janitors, health-care and home-care workers, security officers and more of SEIU support Gov. Pritzker’s fair tax plan, which will make Illinois a better, more equitable state for working families.”
IFT President Dan Montgomery said the Fair Tax is a good plan for working families.
“It’s no secret that Illinois’ dire financial situation has taken decades to develop and was made exponentially worse in recent years,” he said.
“Solving our problems will take both time and real structural change. The governor’s proposal asks the wealthy to pay their fair share so we can invest in schools, higher education, and vital services – and that is something the IFT supports.”
IEA President Kathi Griffin said legitimate surveys show a strong majority supporting the fair tax.
“It is imperative that we redirect Illinois to a path of economic recovery that will help our students access the tools and resources that will allow them to reach their full potential,” she said. “This will strengthen our institutions of higher education, allow our public schools to thrive, and strengthen communities throughout Illinois.”
MOST WILL GET A TAX CUT
Republicans have called the Fair Tax a “middle-class” tax increase, but studies show the only people would be paying higher taxes would be the top three percent of earners.
Everyone below that threshold would get at least a small tax reduction. The additional revenue – by the Pritzker administration at $3 billion a year – would help deal with the state’s daunting financial situation, which grew worse under Republican Governor Bruce Rauner.
All three of the southern Illinois and Metro-East Democratic senators voted for the tax plan – Andy Manar of Bunker Hill, Rachelle Crowe of Glen Carbon and Christopher Belt of Cahokia. Each of the southern Illinois Republican senators voted against it.
“Anyone who makes less than $250,000 a year will get a tax cut under this plan. That’s nearly every single taxpayer I represent,” said Manar, one of the chief sponsors of the bill, and three accompanying bills which also passed the Senate. “This is the right thing to do for people who find themselves working harder but taking home less. Those who have benefited from a robust economy can pay a little more to help bring stability to the state of Illinois.”
One of the three companion bills would set the new tax rates if the constitutional amendment is approved.
Another would block school districts from raising property taxes if the state provides its promised formula funding and pays for state-mandated programs.
The third would eliminate the estate tax, allowing families to keep more of their accumulated wealth – a longtime Republican Party goal.
PROPOSED TAX RATES
Under the plan, the tax rates for individuals would be:
- 4.75 percent for people making up to $10,000.
- 4.9 percent for those from $10,000 to $100,000.
- 4.95 percent for those between $100,000 and $250,000.
The current flat rate is 4.95 percent. The new, higher rates for those earning more would be:
- 7.75 percent for $250,000 to $350,000.
- 7.85 percent for $350,000 to $750,000.
- 7.99 percent for $750,000-plus.
- The corporate rate would rise from seven percent to 7.99 percent.
Married joint-filers would pay an adjusted rate to avoid creating a so-called “marriage penalty.” The lower rates would be the same, but at the higher rates:
- 7.75 percent would apply to couples with a combined income between $250,000 and $500,000.
- 7.85 percent would apply to those earning between $500,000 to $1 million.
- 7.99 percent rate for those with income over $1 million.
The new rates would not be part of the constitutional amendment, so they could be changed in future years.
A PACKAGE DEAL
Manar sees it as a package deal, combining fair tax rates, property tax relief based on adequate state school funding, and an end to estate taxes.
“It’s time to turn off the spigot of property taxes and make state funding the predominant source of support for schools,” he said. “This is the next step toward bringing true equity to the funding of schools while acknowledging that the property tax burden has to be reduced over time.”
Union activists and other supporters held a Fair Tax lobby day on April 30 to show their support for the plan.
CALL YOUR REPRESENTATIVE
AFSCME has set up a hotline to contact your state representatives and voice your support for the plan.
Call the AFSCME legislative hotline at 844-236-5649 to reach your state representative and tell them to vote YES for the fair tax that Illinois needs to thrive.