Contention is abound concerning a graduated income tax proposal by Gov. J.B. Pritzker referred to as the Fair Tax.
A graduated, or progressive, income tax is when higher earners pay more taxes and lower earners pay less taxes, as opposed to a flat tax, which has all taxpayers paying the same percentage of their income. There are eight states that have implemented a flat tax, and one of those states is Illinois.
Pritzker’s Fair Tax proposal is seen as an effort to provide monetary relief to the middle class residents of Illinois and rid the annual budget of its $1.2 billion deficit. The proposal could also generate $250 million for education and infrastructure and provide a 10 percent cut in residential property taxes.
Proponents of the Fair Tax proposal believe that a graduated income tax system will protect small businesses and stimulate the economy.
“Under this system, Illinois’ could grow by $1 billion to $8 billion and generate thousands of new jobs,” Frank Manzo, policy director of the Illinois Economic Policy Institute, and Robert Bruno, director of the Project for Middle Class Renewal, wrote in an opinion for Crain's Chicago Business. “Why? Because working and middle-class families are more likely to spend their tax cuts in the economy, and additional state investments in education and infrastructure are proven tools for creating broad-based prosperity.”
But there are those who stand in opposition of Fair Tax, believing that it will fail at its purpose: one such person is Mark Glennon, founder of Wirepoints.
“[I]f Gov. J.B. Pritzker’s Fair Tax proposal becomes law, Illinoisans will quickly discover they were duped into throwing more money at a doomed effort,” wrote Glennon. “The new revenue would barely dent our problems and only further enrage the Illinoisans who are already fed up and ready to leave.”
Glennon further asserts that the $3.2 billion of debt that Manzo and Bruno purport Illinois to have, believing it is actually closer to $10 billion — $19 billion, if one factors in all of Pritzker’s campaign promises.
“Actual accrual-based losses, as shown in the state’s audited financial statements, have averaged $12.5 billion over the last 10 years,” Glennon wrote.
What about relief for the middle class?
“[P]lay with the calculator provided by Fair Tax proponents and you will see that the relief to be offered to the middle class is small – typically two or three hundred dollars. Their total tax relief would be just $180 million,” wrote Glennon.
Northwest Illinois News reached out to state representative and member of House GOP Leadership Tom Demmer (R- Dixon) for his opinion, but he declined to comment.
Alerts Sign-up