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Friday, November 22, 2024

Progressive tax no way forward for Illinois, tax expert argues

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Ted Dabrowski says he knows how to become the governor of Illinois next year.

"All a gubernatorial candidate would have to do is run on changing the tax rate -- lowering it for most, but promising to raise it on the rich," Dabrowski,the vice president of policy for the Illinois Policy Institute, wrote on the group’s website recently. "For example, a candidate can promise a tax rate below 5 percent for Illinoisans making less than $100,000, giving 80 percent of Illinoisans a tax break. Then, to make up for the revenue loss, politicians can hike taxes on the 'rich' through increasingly higher tax rates above 5 percent. …. but a progressive candidate's math only works out if income taxes have already gone up -- as they would under the Senate Democrats' income tax hike."

Dabrowski was referring to a budget plan passed in the Senate without Republican support just before the end of the spring legislative session. It includes an increase of the state personal income tax to 4.95 percent from 3.75 percent and expand the state sales tax to services and products previously untaxed.


Ted Dabrowski, vice president of policy at the Illinois Policy Institute

"Such a tax hike would also open the door to a progressive tax hike pitch from any candidate for governor," Dabrowski wrote. "A progressive tax structure would allow politicians to tax personal incomes at increasingly higher rates."

He said a 2013 proposal for a progressive tax would have instituted taxes of 4 percent for residents with incomes of at least $18,000 a year and higher for those making more, up to nearly 9 percent for the wealthy.

"An income tax hike to 5 percent makes a call for a progressive tax system during the 2018 gubernatorial race a much easier sell," he wrote. "That’s because the legislature would already have done the dirty work of raising taxes. In contrast, if Illinois’ rate remains at a flat 3.75 percent, politicians can’t easily raise billions in new tax revenues and at the same time promise a tax cut to most through a progressive tax plan."

The only real way for Illinois to move forward is through reform, including spending cuts -- not through raising taxes in any form.

"Illinoisans don't need a progressive tax, which exaggerates booms and busts in revenues," Dabrowski wrote. "This tax policy contributes to budget deficits and makes tax receipts more volatile. Over time, it ends up targeting the middle class. And it punishes success -- driving people away. The General Assembly should reject an income tax hike and close the door on the call for a progressive tax."

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