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By: Ted Dabrowski and John Klingner

Newly-minted Illinois Gov. J.B. Pritzker boxed himself into a corner when he delivered his inaugural address on Monday. He promised to balance the budget, spend billions more on programs and spare Illinois’ middle class from an income tax hike all while keeping the state’s core spending drivers intact.

What he promised isn’t possible. Even after relying on what he might get from new sources like marijuana and gambling, his promise to hit the wealthy with a progressive tax won’t bring in enough revenues. There simply aren’t enough millionaires in Illinois to do what Pritzker wants.

Since Pritzker has never released a concrete tax plan, Wirepoints calculated what a realistic progressive tax could look like under his spending proposals. We took spending estimates from media reports they range from $10 billion to $18 billion and combined it with the Illinois Department of Revenue’s income tax data to derive the tax brackets.

No matter how you run the numbers, the progressive tax rates needed to fund Pritzker’s billions in promised spending would be destructive to Illinois. They’ll punish the wallets of both the middle class and wealthy and push even more residents over the border.

A progressive tax hike on the middle class

The reality is Pritzker can only get all the revenues he wants by hitting middle-income Illinoisans. To achieve his minimum spending targets, Wirepoints’ found that the middle class with incomes of $50,000 and above would have to be hit with higher taxes.

Under the above scenario, an Illinoisan with $75,000 in taxable income will pay nearly $900 more in taxes, up 24 percent compared to the current flat tax of 4.95 percent.

And for two married, career teachers earning a combined $138,000 in taxable income (the average Illinois teacher salary is nearly $71,000 according to COGFA), the progressive scheme would hike their taxes 50 percent, to $10,270 a year, up from their current $6,831 bill.

And an Illinoisan that makes $1 million will see their tax double, growing to $100,000 a year from the $50,000 they currently pay under the flat tax.

Wirepoints also ran tax scenarios that avoided hitting the middle class. We found that if Pritzker’s progressive taxes only raised rates on the “truly” wealthy, then Illinois’ top tax rate would have to reach absurd levels. For full details, read Wirepoints special report: What Pritzker’s progressive tax rates will probably look like.

Focus on reforms, not a progressive tax

Wirepoints’ tax math is actually kind to Pritzker. It doesn’t take in account the reality that many wealthy and middle-income residents will leave Illinois rather than pay far higher taxes.

Illinois outmigration has been on the rise for years. A near-record 114,000 residents left the state in 2018 alone. In all, more than 1.5 million people have left the state since 2000, taking a part of the state’s tax base with them.

Higher taxes will only accelerate the rate at which Illinoisans flee.

The governor is stuck in a corner of his own design – he’s made promises that are impossible to keep.

Pritzker would do far better to focus on “embracing hard choices,” another promise he made in his inaugural speech.

Making hard choices means enacting structural reforms Illinois so desperately needs – including a constitutional amendment for pensions.

That would serve Illinois far better than impossible tax and spend promises.

For full details about the Pritzker’s potential tax hikes and Wirepoints’ progressive tax scenarios, read Wirepoint’s special report: What Pritzker’s progressive tax rates will probably look like.

 

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Rick

But Pot sales, gambling and more strip clubs are also in the plan! Companies may have to stop pee testing, its hard enough already to find employees that can pass a drug test. When pot is legal or may be impossible. Maybe a retirement income tax? There’s a whole lot of revenue to be taken from pension and 401k checks untapped yet. The future is sure looking bright.

Bob Out Of Here

An Illinoisan making $1 million would actually see their taxes decrease to zero, because they will leave the state entirely. Rauner can run his investment firm from Houston, as can the rest of them.

Suzanne

These rates would have millionaires leaving like rats following the Pied Piper!

There is a point, a number, where you can’t afford to leave – even if you want to. Know that number.

Brian

Anyone in the millionaire club would almost certainly move to Nashville, Las Vegas, Florida, Texas, etc…Or at least make Illinois not their home state. This should be blatantly obvious. What it will hurt is everyone making 50-100k who is stuck in Illinois. Totally ineffective this will be. But Illinois of course will proceed with it.

K L

The perennial “hard choices,” along with the equally tired “cant afford not to” merely signal BAD news for taxpayers.
That he incentivized top aides by doubling their pay with his personal funds, well, what more proof that they’ll support his destroying us?

P M

Fear not, we may get lucky and fat boy may keel over soon…it would be kind of funny actually and chubby’s best way out. He obviously is not use to being weighed and in Illinois politics the governor is weighed and measured every day. This should be hilarious.

Frankly I enjoyed watching Rauner “the lame” stumble around, it was hilarious.

Suzanne

Rauner was not lame. he was suffering from Munchausen’s by proxy. Madigan was the parent determined to make him look ill.

nixit

No state with such progressive brackets used in this example have our outrageous property taxes. NONE. Oregon, Minnesota, and California have property tax rates less than half what we pay. Hell, Oregon doesn’t even have a sales tax.

Bross

Watch out! J.B. is bringing his political will to this fight. If you don’t agree with him he will crush you. In other words…my way or the highway.

Wally the Wise

Democrats (now) truly own the state. Let’s see how create their excuses will be.

Andrew Raffety

If any GOP memebers vote with them, they’ll say their policies are “bi-partisan”

P M

You can count on the buffoon Brady to vote with them. He has no principles.

Mike Williams

All my Illinois friends were just saying over the holidays that Illinois would be paradise if only taxes were higher on the middle class. They also mentioned that they would never, ever consider leaving the state no matter how high the taxes because of the year round perfect weather, superior schools, and non existent crime.