How many times over can they count that $3.4 billion?
Hardly a day now passes without supporters of the Fair Tax – a graduated income tax for Illinois – adding to the list that supposedly would be covered by its additional revenue. That new revenue is optimistically estimated at $3.4 billion. Salute to whomever on Twitter was first to compare it to the story of Jesus feeding multitudes with fives loaves and two fish, because it sure fits.
Aside from plugging the $3.2 billion budget deficit claimed by Pritzker Administration, endless messaging from supporters says the tax would also provide for investment in schools and health care, tax relief for 97% of Illinois taxpayers, fixing our crumbling infrastructure, creating thousands of jobs, “paying off the Republican Party’s old bills,” assuring that domestic violence shelters are kept open, helping stabilize our pensions, putting us on a path to fiscal stability and more.
The reality is the $3.4 billion wouldn’t come remotely close to filling just the true budget hole, which is more like $10 billion if nothing gets reformed. Or that amount could instead go entirely into pensions but their unfunded liabilities would continue to soar. Or twice the amount of the tax could go to schools and they would still be short on the amount they say is needed for their new school funding formula. Tax relief? Big earners seeing an increase in taxes would pay 20x more dollars than would be cut for lower earners. We’ve been documenting all those numbers repeatedly here.
It’s no different than the last tax hike we were told would “save the state.” An establishment focused entirely on taxes as our salvation will be back for much, much more – and quickly. Even the $3.4 billion of estimated revenue won’t last long because more Illinoisans will flee, though the effects may take a few years to show up.
The solution, instead, is a long list of reforms we’ve advocated here at Wirepoints, including the big one – a constitutional amendment to allow for real pension reform. Only reform would restore confidence.
Reform by Illinois’ establishment, however, would take a miracle indeed.
-Mark Glennon, Founder, Wirepoints