Print Friendly, PDF & Email

There’s a simple reason why Illinois Democratic candidates for governor don’t get specific about the progressive income tax they all want: The numbers immediately expose why it’s not the magic bullet their reality-challenged progressive supporters imagine. Just as we saw with the recent income tax hike, we’d just be putting more money into a bottomless pit.

Some light emerged on this topic last week. Bob Dailber is a downstate Democrat running for governor you never heard of. He, alone, got specific, proposing a tax cut for everybody earning less than $150,000 per year and progressively higher rates on higher earners.

Resulting revenue? $1 billion, claims Dailber. Whoopee. That’s just a ripple. Even with the recent tax increase of $5 billion that Democrats claimed balanced the budget and saved the state, next year’s budget is already on course to be unbalanced by at least $3 billion.

We detailed why last month. Spending grows year after year far faster than revenue thanks to our pension system, the new education bill that requires another $350 million each year, health care costs and more. And that’s using phony government budget accounting that vastly understate true losses.

Jim Dey has a nice article today on Dailber’s proposal, pointing out that revenue actually would be lost under it, contrary to Dailber’s claim.

But Dey is wrong to say that Ralph Martire from the union-funded Center for Tax and Budget Accountability has a more “realistic plan” that would raise $2 billion. Again, $2 billion just doesn’t solve anything unless spending is addressed, even if you believe Martire’s numbers, and you shouldn’t.

Martire and all Democrats scoff at the idea of “dynamically scoring” tax rate increases when predicting how much revenue they’ll raise. That’s fancy talk for the concept that, in the long run, people and employers leave because of higher taxes. They’re asking Illinoisans to reject what they see and hear with their own eyes and ears.

Then there’s the matter of when any revenue from a progressive income tax would materialize. The necessary constitutional amendment wouldn’t even get on the ballot until at least 2020. Revenue wouldn’t show up until 2022. We’ll be watching the dirt getting thrown on Illinois’ grave by then.

Jim Dey used the right phrase. It’s all a “bait and switch.” To really get the revenue Dems want, they’d have to use the constitutional amendment for a progressive tax to levy a massive increase across the board. True, and that would accelerate the death spiral, leaving spending growth unchecked. Illinois’s total state and local tax burden is already worst, or nearly worst, in the country.

If you think a progressive tax would be fairer, fine. But if you think it will do much to solve our fiscal crisis you’ve been suckered.

-Mark Glennon is founder and Executive Editor of Wirepoints. Opinions expressed are his own.

Update: This entry on Twitter was made along with this article:

I am a financial adviser in Wheaton, Illinois. 80% of the clients with whom I have met over the last 3 years regarding retirement, are leaving

newest oldest most voted
Notify of
Rick

Wouldn’t a progressive tax include retirees? Or would they exempt a retired school admin who happens to have a $200,000 pension?

bruce

why do they always start with the supposed answer – taxes? Let’s start with what the bills are and how much do these idiots need. As stated below, yeah let’s calculate everything it would take. What? Maybe $45B per year to pay for everything and some reasonable way to pay the unfunded pensions? $50B? Then let’s use that number and derive a progressive rate. We know about how many people make how much…what’s the result? Maybe even throw in 1% cap on property taxes to see what the State should really pay to drive down property taxes. Tax services, tax… Read more »

Jeff+Carter

I think that if we are going to have a Democratic governor in Illinois it should be Dan Biss. He is a crackpot. I want him to put the transaction tax on the finance industry, and load up Illinois with taxes, user fees and socialism. Let’s get it over with.

nixit

I’ve seen Martire’s tax plan mentioned here. The effective tax rate on $200K would put us in the highest 10 states nationwide, higher than NY and CT. At $500K, we’re in the top 5. Since Martire’s plan doesn’t have a separate bracket for married filing jointly like most states, it’s hard to determine the actual household impact. If there’s only one bracket, it’s a lot worse. But the argument for a progressive income tax always forgets one important point: property tax. We’ve been told for decades that our property taxes are high because income taxes are low. Per Wallethub, here’s… Read more »