A Fair Tax for Illinois and Illinoisians

Now that the Fair Tax will be on the November 2020 ballot, here are a few things you should know.

 

By Beverly George,
ACE Leader

 

On May 14, I attended a Fair Tax Town Hall in Palatine with former State Sen. Daniel Biss presenting strong arguments for the amendment. Biss used a slideshow presentation prepared by the Responsible Budget Coalition, a nonpartisan alliance of 300 organizations across several different sectors, including human services, health care, civic organizations, pre-K through 12, higher education, and faith communities. A math professor, Biss was thorough in his explanation of the Fair Tax and how it would affect Illinois.

His presentation included the following points:

  • a review of how Illinois’ economy got into this budget hole over many years;
  • why the Flat Tax is unfair in structure and application to Illinoisans, as well as being a constitutional albatross around the state’s economic neck;
  • a comparison of the current Flat Tax structure and formula with tax plans used in other states;
  • how the Fair Tax would affect Illinois taxpayers; and
  • how the proposed Fair Tax would be a positive step forward in turning Illinois’ fiscal ship of state around.

Here is the slideshow. Please read and study the numbers for yourself. FairTax.final

How the Illinois economy got this way

From FY2000 to FY2019, there were several years when the state tried to operate without any budget. This overlapped in part with a period when the country was in a recession, so what was bad to begin with became worse over time. Like a family experiencing a job loss, a rising cost of living, and unpaid bills, routine but necessary maintenance projects, such as infrastructure, went undone as well. One slide shows how critical services lost significant funding from 2000 through 2019.

The Flat Tax as both a fiscal and constitutional albatross on the state’s economy

The Flat Income Tax was written into the state constitution in 1970 as a means to raise revenue. At that time, it seemed like a good idea to the legislators to tax all citizens at the same rate, but in 1970 the economic disparity between the lowest income earners and the highest income earners was far, far less than it is today.
Fast forward 49 years and times have changed, more funds are needed to pay down debt and deliver services. However, to raise more money, the general assembly can only raise the Flat Tax rate with the same rate falling across the backs of rich and poor alike.

How the Fair Tax will affect Illinoisans

Wait! It’s not alike at all, you say. Raising the tax rate 0.5 or 1% would be felt more acutely by the working poor through the middle class. Most Illinois taxpayers believe the top earners (over $250,000 per year) should pay a higher rate, and earners making $1M or more per year, should pay an even higher rate. The Fair Tax will increase income tax on the top 3% of Illinois earners and also provide some modest income tax relief to the bottom 97% who earn less than $250K per year.
Seven states have no state income tax, eight states have a Flat Tax policy, and only four mandate a Flat Tax in their constitutions. The federal government, the remaining states, and the District of Columbia all have graduated tax laws.

In those states that have a flat tax without the constitutional mandate, if voters want to raise revenue by moving to a graduated tax formula, they can vote for candidates running on the promise to enact that policy and bring change by election. However, in Illinois, voters wanting change and/or candidates promising change are ineffective because the Illinois constitution has to change with a new tax amendment.

Here’s the two-step process for change to the Fair Tax:

1. With a vote of 60%, both the state senate and house must pass a resolution to put it on the ballot for November, 2020. (Done.)
2. Once it’s on the ballot, we need 60% of voters to vote in favor of the ballot question, or, because many voters arrive uninformed on resolutions and choose not to vote on them at all, we need more than 50% of the people who vote to vote in favor of it.

And finally, the resolution will propose both the graduated tax structure and that it no longer be constitutionally mandated.

Finally and most importantly, if it gets on the ballot, we all have to sell it. This is a good plan. There will be plenty of money spent to defeat the Fair Tax, and the anti-Fair Tax messages will be false, intimidating, creative—perhaps even ridiculous—persistent, and ubiquitous.

So engage, get informed, and speak out.

 


ACE Leader Beverly George also is a member of Indivisible, the Naperville League of Women Voters, and the Citizens Climate Lobby. She also volunteers with her parish PADS group. A former chemist, George worked in clinical chemistry and hematology research at the Centers for Disease Control for six years and taught chemistry and freshman science at Naperville North High School for 20 years.