Let’s make Pritzker and Rauner pay more—a lot more—in state income taxes | Bleader

Tuesday, March 20, 2018

Let’s make Pritzker and Rauner pay more—a lot more—in state income taxes

Posted By on 03.20.18 at 05:00 AM

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click to enlarge Billionaires Bruce Rauner and J.B. Pritzker's taxes would go up, up, up under a progressive income tax. - SUN-TIMES PHOTOS BY RICH HEIN, ASHLEE REZIN
  • Sun-Times photos by Rich Hein, Ashlee Rezin
  • Billionaires Bruce Rauner and J.B. Pritzker's taxes would go up, up, up under a progressive income tax.
While your attention may have been diverted by the circuslike governor's primary, activists have been methodically working behind the scenes to deal with the biggest state issue of our time: fair taxes.

The activists are members of the Responsible Budget Coalition, a collection of roughly 300 community groups and social service agencies throughout the state.

Their goal is to convince state legislators to put a referendum on the ballot asking voters to approve an amendment to the state constitution that would give Illinois a graduated income tax.

Uh-oh. Amendments, constitution, taxes—I can see eyes glazing over already. Focus, readers, focus.

I realize this isn't half as interesting as, say, Governor Rauner's curiously Nixonian aversion to legalizing recreational marijuana, as though it’s a demon weed driving our country crazy.

But I think the time has come to pay attention to the boring stuff, like finding the money to pave streets, police communities, operate schools, and otherwise continue with this experiment known as civilization. So without further ado . . .

Our problem is we don't have enough money to pay for all the things we need from our government.

I know that's hard to believe when you consider how much you pay each year in one tax or another. But it's a reality underscored by the fact that Illinois has more than $15 billion in unpaid bills.

We can go in one of two directions. We could cut government, privatize schools, and basically give up on helping the ill and indigent—as Rauner and his allies apparently want to do.

Or we could search for progressive ways of raising taxes and implement a fair tax, as the responsible budget coalition would put it.

Right now our system of taxation in this state is regressive. That means that generally the poorer you are, the higher the percentage of your income that goes to taxes.

I'm not saying that poor people literally pay more each year in taxes than, say, a Rauner or Pritzker. No, it just means a greater portion of their income goes to taxes.

Fairness really means flipping the switch so rich people like the Rauners and Pritzkers pay a more proportionate amount of taxes.

There’s two ways to go with that, sales tax and income tax. Let’s take sales tax first. In Illinois, we don’t have a sales tax on services. So, for instance, if you buy a lawn mower to mow your lawn you pay a sales tax on the purchase. But if you hire a lawn service to mow your lawn, you don’t pay a sale tax on that service.

Of course, any proposal to raise the sales tax would raise a huge ruckus. We learned that last year when Cook County Board president Toni Preckwinkle imposed a soda pop tax. The county board rescinded that tax after a grassroots rebellion, which was largely underwritten by Big Soda.

Now, Big Soda had a point—words I never thought I’d write. The soda pop tax was regressive since it taxed the poor and rich at the same rate.

You could try to slap a sales tax on services that only rich people tend to use. But I have a feeling there’d be a great uproar no matter what sales taxes were raised. So perhaps it would be politically more realistic to pass a progressive state income tax.

At the moment, the state constitution mandates a flat tax, meaning all people, regardless of income, pay the same: 4.95 percent.

The Responsible Budget Coalition is proposing to amend the constitution to allow for a graduated income tax, meaning the more money you make, the greater the rate you pay.

They’ve yet to figure out the details. But conceivably, you could lower the rate for people in the lower tax brackets, raise the rate on the Rauners and Pritzkers, and still have more money flowing into the state coffers.

Unless, of course, the Rauners and Pritzkers hide their money in offshore tax shelters. Another story for another time.

Amending the constitution requires that a statewide referendum be put to the voters. To get that referendum on the ballot requires a vote of 60 percent of legislators in both the house and senate. In this case, they would be putting a referendum on the ballot asking voters if they want to adopt a graduated income tax.

If they want to get that referendum on the ballot in time for November’s election, both houses have to pass the resolution by May 8.

And what a legislative battle that will be. Let’s take just the house—where it requires 71 votes to pass the resolution. There are only 67 Democrats—so they’ll need four Republicans to pass it. And that’s if all the Democrats vote for it.

If the past is a indicator of the future, you can bet house speaker Michael Madigan will look to protect Democratic legislators in swing districts from having to vote for any tax hike—no matter how progressive—that might leave them vulnerable to a barrage of Rauner-funded mailings blasting them as tax-and-spend liberals.

Hey, man, no one said doing the right thing is easy.

“This is one of the most important things Illinois can do to stabilize long-term and short-term finances,” says John Bouman, president of the Sargent Shriver National Center on Poverty Law and a member of the coalition. "It brings much-needed stability. It gets Illinois to a place where it can pay its bills and keep its promises to its people."

On March 27 the coalition will hold a noontime rally at the Thompson Center. In the coming weeks, the action will shift to Springfield, where the real wheeling and dealing will begin.

Who knows? Before all is said and done this could be as entertaining as Rauner’s shifting stance on marijuana. v

The Ben Joravsky Show airs from 2 to 5 PM Monday through Friday on WCPT 820 AM.

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