When the next Illinois General Assembly is seated in January, there could be debate on whether the state should have a progressive income tax — one that has higher rates for higher income brackets.
Among the issues being pushed in the November gubernatorial election by Democrats is their demand for a progressive or graduated income tax, which would be a departure from the state's flat income tax of 4.95 percent for all income levels.
Making the change would require an amendment to the state constitution.
According to a poll released in March by the Paul Simon Public Policy Institute, 76 percent of respondents in Illinois supported a “millionaire’s tax” which would impose an extra 3 percent tax on income above $1 million. The same poll found 72 percent of respondents would favor a amendment to the state constitution allowing for a graduated income tax.
Republican state Reps. Charlie Meier, of Okawville, and John Cavaletto, of Salem, have both signed on as co-sponsors to a Republican resolution opposing a graduated income tax.
“More taxes will not solve Illinois’ spending problem,” Meier said. “People are leaving our state as a result of having the highest tax burden in the country. We need to do more with less while growing our economy. More jobs, spending less, and no more taxes is the common sense approach my colleagues in the legislature should follow.”
Democrat state Rep. Jerry Costello II, of Smithton, signed on as a chief co-sponsor to a separate House resolution opposed to a graduated income tax.
Republican state Sens. Paul Schimpf, of Waterloo, and Kyle McCarter, of Lebanon, have also signed on as co-sponsors to a Senate resolution opposing a progressive income tax.
McCarter is not running for re-election and Schimpf is not up for re-election in November.
Republican Gov. Bruce Rauner is against the idea calling it on Twitter "another money grab that will make things worse in Illinois, not better."
Rauner's Democratic challenger, J.B. Pritzker, has been in support of a progressive income tax, but has not said what he wants to rates to be.
"I think what's important is the principle that the middle class should pay a lower rate than those who make more," Pritzker said.
State Rep. LaToya Greenwood, D-East St. Louis, has signed on as a co-sponsor of a house resolution which supports a progressive income tax in Illinois.
State Rep. Jay Hoffman, D-Swansea, who serves as the Democrat Majority Conference chairman in the state House, said he supports a progressive income tax.
“Thirty-three other states have a progressive tax where the rich pay their fair share," Hoffman said. "With the current tax system in Illinois many millionaires, multimillionaires and billionaires don’t pay the state taxes. I’m in favor of making sure we reduce the middle-class tax burden on middle-income families and have the rich pay more, and the progressive income tax would do that.”
The divide is mainly along party lines.
Republican Dwight Kay, who is a former state representative seeking his old seat in the 111th House District held by Rep. Katie Stuart, D-Edwardsville, said he has been against the idea of a progressive income tax for years.
"It’s not a wise plan because whenever they talk about a progressive tax, they never talk about tax brackets that go with them for business or individuals," Kay said. "That’s always the gimmick side of a progressive tax. We know the higher income earners will pay more, but you don’t know how much because you don’t know what the tax brackets are.”
He said a progressive income tax would penalize the high-income earners, who are the “job creators.” It would encourage people to leave the state, he said.
"The progressive tax is just an invitation for those people who are on the border, on the edge, who say they could do better somewhere else to reconsider those thoughts, and a progressive tax just pushes them out the door,” Kay said.
Stuart said she has agreed to be a co-sponsor of a resolution supporting a progressive income tax and says it's something the state needs to do. But she said she wants to see details before agreeing to vote for any proposal that may come forward.
“I have to see the actual rates and brackets that are set up, but with some proposals I’ve seen put forward, really for anywhere between 90 and 98 percent of people across the state of Illinois, there’s going to be a savings on their taxes," Stuart said. "I don’t see how there could be anything wrong with that, and for some it's significant. I’ve seen some in the $495 to $500 mark a year, which that is a significant amount of money for a family to save.”
She added, “You can’t just say a blanket yes, because somebody could claim a progressive income tax with two brackets and make the rate extremely high for families who make $30,000 or more. That, to me, is not a progressive tax. You have to take into account real incomes and what middle-class families really need, and make sure the numbers are there.”
Hal Patton, who is seeking Sen. Bill Haine's Senate seat as a member of a third-party, Downstate United, and has the backing of local Republican leaders, said he's against a progressive income tax.
"If J.B. (Pritzker) wants to pay more in taxes, he should just do that," Patton said. "On the very last line of the tax return there’s a slot that says yes, I like to pay more in taxes because it’s all going to great use. If he believes that, I would encourage him to do that with his billions. "
Patton added, "My position here in Edwardsville is, grow the economy, grow the number of businesses and grow the amount of people and investors so you could keep the amount of taxes low and still have the amenities people are looking for."
His opponent, Democrat Rachelle Aud Crowe, has indicated she would support a graduated income tax.
"Working families deserve a tax cut. The tax burden on middle-class and lower-income families is disproportionately high in Illinois," Crowe said. "Our state should provide relief through a fairer tax code. I would support a graduated income tax structure as long as lower-income and middle-class families receive a tax cut and our state dollars are being allocated responsibly."
Haine, D-Alton, who is not seeking re-election, said he wouldn't weigh in on the debate.
“It’s not going to come to a vote this year. This is an election year, and it will be thoroughly debated and I’m going to listen to the debate, pros and cons. This will be something for my successor to face," Haine said. "There are strong arguments for it and against it. I do find the debate to be interesting because it shows, after all the rhetoric from the governor and his allies about raising income taxes., our income tax rate is the lowest of any neighbors with the exception of Kentucky. And they all have graduated taxes.”
Where other candidates and legislators stand:
- Mike Babcock, Republican running in the 111th House district — Opposed
- David Seiler, Democrat running in the 107th House district — In favor
- Blaine Wilhour, Republican running in the 107th House district — Opposed
- Brian Stout, Democrat running in the 54th Senate district — In favor
- Jason Plummer, Republican running in the 54th Senate district — Opposed
- Jason Madlock, Republican running in the 114th House district — Did not respond to request for comment
- Doug Jameson, Republican running in the 113th House district — Opposed
- David Friess, Republican running in the 116th House district - Opposed
- Tanya Hildenbrand, Republican running in the 57th Senate district — opposed
- Chris Belt, Democrat running in the 57th Senate district — In favor
- Sen. James Clayborne, D-Belleville — Did not respond to request for comment
- Rep. Monica Bristow, D-Godfrey — Did not respond to request for comment