A coalition of Illinois business groups is launching a new campaign against the graduated income tax constitutional amendment voters will consider on November's ballot.
Groups opposing the plan touted by Gov. JB Pritzker and Democrats to shift away from the state's current 4.95% flat individual income tax to a multi-bracketed tax structure imposing progressively higher rates on higher earners, are banding together under the banner, "Vote No on the Progressive Tax Coalition." They include the Illinois Chamber of Commerce, Illinois Farm Bureau, Technology and Manufacturing Association, and the National Federation of Independent Businesses (NFIB) Illinois.
Cindy Neal is chair of the NFIB Illinois Leadership Council and owner of the Peoria franchise of Express Employment Professionals, a staffing agency.
"Make no mistake. This isn't about creating more equitable terms. It's about raising taxes to fund Springfield's out-of-control spending addiction," Neal said Tuesday at a press conference at LeFleur Floral Design & Boutique in Washington.
Neal said she believes the current flat tax is fairer than a graduated tax because everyone pays the same rate under the flat tax structure. Pritzker has criticized the current tax structure for shifting a greater share of the overall tax burden to lower-earning workers, arguing that higher earners should pay a larger chunk.
Neal said the graduated tax also would hurt small businesses already negatively impacted by the COVID-19 pandemic.
The Chicago-based Institute for Illinois' Fiscal Sustainability at the Civic Federation says those who earn $250,000 or less would pay the same or a slightly reduced rate under Pritzker's graduated income tax proposal.
Those earning more than $250,000 a year would pay progressively higher rates on that additional income, with single earners over $750,000 or families earning over $1 million a year paying a flat, 7.99% rate on all of their income. Corporate taxes also would go up by about a percentage point, from 7% to 7.99%.
But former Republican state Sen. Steve Rauschenberger warned the proposal was a "bait-and-switch." While Illinois Chamber of Commerce President Todd Maisch said many middle class earners would save about "the price of a cup of coffee" in annual tax payments initially, it would eventually lead to a slippery slope of everyone ponying up more in taxes--not just the wealthiest.
Pritzker recently gave $51.5 million out of his own pockets to the Vote Yes For Fairness campaign that backs the new tax structure.
Maisch declined to disclose how much money the groups are willing to spend, but said it's not necessary to go dollar-to-dollar with the governor once the graduated tax concept is successfully explained to voters.
"This is an unpopular idea. If the proponents were so certain they had this in the bag, would they have written a $51 million check? I don't think so," Maisch said.
Quentin Fulks, chairman of the Pritzker-backed Vote Yes for Fairness, said the press conference hosted by business groups was "filled with lies from start to finish."
“Now more than ever, we need to change our tax system from one where our essential workers pay the same tax rate as millionaires and billionaires to one that finally makes the wealthiest Illinoisans pay their fair share," Fulks said in a statement. "It’s clear from today’s press conference that opponents of the Fair Tax can only use desperate lies to try and mislead Illinois voters to keep the status quo in place, and Vote Yes For Fairness won’t let them go unanswered.”
Fulks said 97% of Illinoisans would see either a tax cut or an unchanged rate under Pritzker's constitutional amendment.
The Pritzker administration estimates about $3.6 billion more a year in revenues would be raised under the proposed graduated income tax.
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