By: Mark Glennon*
As Chairman of a group called Vote Yes For Fairness, Quentin Fulks is a point man in favor of the progressive income tax increase that’s on the ballot for voters in November.
Opponents are misleading you, he claimed in a Friday Chicago Tribune article, when they say a yes vote would grant “new power to levy taxes when the opposite is true.”
He went on:
And despite the fearmongering opponents are relying on, only small businesses making more than $250,000 a year in profit will pay more under the graduated tax, which means at least 95% of small businesses in Illinois will either pay the same or less in taxes.
It’s Fulk’s who is misleading.
To see why, it’s essential to understand something that much of the public is still confused about.
Understand that raising taxes progressively is a two-step process. First, voters will be only be asked in November whether to change the Illinois constitution to permit higher income tax rates for different income groups. A yes vote would mean Springfield could set whatever rates it wants, on any income group, whenever it wants. Today, in contrast, the constitution requires that income taxes be set at the same percentage rate for everybody.
That’s all voters will be asked: Yes or no, should progressively higher rates be allowed, changeable at any time?
But to actually raise taxes, a law has to be passed by Springfield — the General Assembly and the governor. They’ve already done that, setting new, higher rates for higher earners that will go into effect on January 1 if the ballot referendum wins.
But once the constitution is changed, Springfield would then be free to increase those rates on any income group at any time, with no constitutional limits set.
That’s why Fulks is misleading when he wrote that only those making more than $250,000 a year will pay more under the graduated tax. He leads you to think those initial rates are part of what you will be voting on. In fact, those rates are about as permanent as the initial subscription fees Comcast offers you. You are at their mercy once you sign up.
That’s what opponents of the progressive tax fear, and it’s why they’ve labeled the ballot referendum a “blank check.”
They are right to be afraid, first, because of experience in other states that have progressive income taxes. Many of them tax the middle class as heavily as the top new rates that the wealthy in Illinois would immediately pay under the law already passed by Springfield. We gave you the facts last week here.
Second, we know that the new revenue that would be collected from the initial “teaser” rates doesn’t come remotely close to closing Illinois massive budget hole or paying for all the promises made by those in power. Those numbers, too, are in our article last week. A yes vote would unleash Springfield to fill the remaining hole with higher rates on the middle class.
And as for Fulks’ claim that the amendment wouldn’t give Springfield new power to levy taxes that it doesn’t already have, why, then, do we need the amendment? Of course it does.
Year after year, for decades, Illinois voters have been duped into agreeing that higher taxes will solve the state’s financial problems. Demand reforms that fix the underlying problems instead of tax increases. Recognize the progressive tax proposal for what it is – just another tax increase, initially on high earners, attached to a blank check they want you to sign at the ballot box.
*Mark Glennon is founder of Wirepoints.