Income tax debate finally taking center stage

When launched in November 2012, we knew that an effort to change the Illinois constitution and start a sliding-scale, progressive income tax system likely would be one of the biggest issues of the two years to come.

It's taken a few months, but the progressive tax issue this month has entered the news cycle in a big way. What to do about the state income tax after 2015 also been firmly established as the top issue in the 2014 race for governor.

So far, there's been little support for amending the state constitution to allow lawmakers to consider adopting a progressive system. (We've posted op-eds by supporters here and here.)

The Chicago Tribune, which, for better or worse, often is responsible for placing issues on state lawmakers' radar, sounded off in its July 7 editorial:

"(I)mposing a progressive tax rate scheme on this economically teetering state is all about lifting more money from Illinois employers -- especially small business operators and farmers -- and from other taxpayers too," said the Tribune editorial board.

The Tribune sounded what has in the few weeks since become a familiar theme: After leading the state into the biggest financial disaster in state history, our representatives in Springfield now say the solution is to give them more money?

And this at a time when the state is collecting more in income taxes than ever.

But the opposition hasn't just come from expected sources like the traditionally conservative Tribune.

Here's State Rep. Jack Franks, D-Marengo, from an interview with Reboot's Madeleine Doubek.

"In Illinois, I don't think we have a revenue problem; I think it's a spending problem. I don't think we should be asking taxpayers for more money when we don't spend what they give us wisely," said Franks.

He explained that he did not oppose a graduated-rate income tax on principle, but that Illinois needs to get spending discipline before thinking of wholesale changes to its income tax system. "We've never had higher revenues than we have now, but we have larger fiscal problems. You have 35 states who are debating whether they should cut their tax rates. Our only question is how much higher should we be charging our citizens. It's the wrong debate to be having."

And here's Eden Martin, Chicago attorney, Sun-Times columnist and Democrat, writing on the progressive tax debate this week:

"(T)he point -- the entire purpose -- of the proposal is to raise and spend more money. Graduated rates would make it far easier -- less politically risky -- for legislators to satisfy the eternal itch to make themselves popular with constituents and donor groups by spending more of the taxpayers' money," Martin writes.

Like Franks, Martin believes the new system would take all pressure off of lawmakers to fix the fundamental problems that got Illinois into its financial morass.

"More revenue means less pressure to control other costs of government, or to negotiate more balanced collective bargaining agreements. Instead of the 'last resort,' raising more tax revenue would become the 'first resort.'"

But it's not just the Chicago media taking notice. Chuck Sweeny, political editor of the Rockford Register Star, sounded a warning this week against what he believes is a tax increase in disguise.

"I believe Democratic legislators and Gov. Pat Quinn are simply going to raise taxes. First, they'll move to make the 'temporary' 2 percentage point income tax increase, due to expire in 2015, permanent. They might raise 'sin' taxes again, and they might slap a sales tax on haircuts and other services.

"And I think they'll put an amendment to the state constitution on the 2014 ballot to allow them to implement a graduated income tax instead of the currently mandated flat tax. They will sell it to us with the slogan, 'Vote yes, make the wealthy pay their fair share.' But it could end up raising taxes on most of us who don't yet know we're wealthy."

We're already on record voicing concern with the open-ended nature of the various progressive tax bills. You can read that view here.

We're sure that as this issue heats up, supporters will become more vocal. For now, though, the progressive tax skeptics are controlling the conversation.

Want to learn more about the progressive vs. flat tax debate? Join us in Springfield on Aug. 15 as Ralph Martire of the Illinois Policy Institute and Ted Dabrowski of the Illinois Policy Institute discuss the pros and cons, respectively, of changing Illinois' income tax. Reboot editor Matt Dietrich will moderate the forum, which is co-sponsored by the Citizens Club of Springfield. For information, click here.

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