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2/1/2013

Ben VanMetre
Senior Budget and Tax Policy Analyst






State Rep. Naomi Jakobsson, D-Urbana, recently proposed to implement another income tax hike in Illinois - and her proposal is gaining interest across the state.

But the current proposal doesn’t include any numbers. Not including tax rates is a strategic move by lawmakers who want Illinoisans to vote on a progressive tax without telling them how much it would increase their tax bill.

Asking lawmakers to figure out the exact tax rates later on is sort of like buying a car and letting the dealer decide the interest rate on your auto loan once you've walked off the lot – you never know what you’ll end up paying.

The Center for Budget and Tax Accountability proposed a progressive income tax that would impose eight ever-higher marginal tax rates, topping off at 11 percent. But when questioned, the organization admitted their rates are up for debate.

Look no further than California to see what happens when progressive tax rates are put in the hands of legislators. Just last year, California Gov. Jerry Brown succeeded in adding three brackets to the state’s already steep progressive structure, increasing the top marginal rate to 13.3 percent.

There’s no telling how high Illinois’ rates would go if the state implemented a progressive income tax. Will the income rates go as high as Hawaii’s 11 percent? Will they follow California and push the top rate to 13.3 percent? Or will Illinois set the bar even higher?

Don’t be fooled. A progressive income tax is simply a money grab disguised as tax reform. It would destroy jobs, stifle entrepreneurship and have a detrimental impact on Illinois’ middle class. It’s a dangerous proposal in the first place, but it's doubly dangerous when voters don't even know exactly what rates will be implemented beforehand. That’s a recipe for disaster.



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