Perfectly progressive
by Kristina Rasmussen Illinois’ flat tax is one of the few bright spots in our state’s tax code. It’s simple, fair and good for growth. And, as NRO’s Kevin Williamson puts it, a flat tax is perfectly progressive: One’s income-tax liability is perfectly proportional to one’s income: At 10 percent, that means $10 on $100 in income, and...
Illinois’ flat tax is one of the few bright spots in our state’s tax code. It’s simple, fair and good for growth. And, as NRO’s Kevin Williamson puts it, a flat tax is perfectly progressive:
One’s income-tax liability is perfectly proportional to one’s income: At 10 percent, that means $10 on $100 in income, and $10 million on $100 million in income. Income taxes progress proportionally to income.
In 2009, the top 14 percent of income earners in Illinois paid 56 percent of the personal income tax collections. Viewed another way, the taxes paid by the top 1 percent of taxpayers is roughly equivalent to the amount sent in to state coffers by the bottom and middle thirds of filers. It’s more than a stretch to claim that the state’s flat tax lets the well-to-do off without paying their fair share.
Yet earlier this week state legislators of both parties voted to erode our flat tax with an expanded earned income tax credit, otherwise known as the EITC.
Illinois’s flat income tax rate is protected by the Illinois Constitution, hence the need for finding a backdoor workaround. Indeed, Democratic Sen. Heather Steans wrote in her newsletter that “I voted for this bill since it adds a measure of progressivity to our state income tax…”
Inexplicably, some Republican legislators went along with the Democrats’ attempt to have their tax cake and eat it too. Democrats get to spend the revenue culled from hiking everyone’s taxes earlier this year, but they also benefit politically from steering “relief” to favored groups. Never mind that a middle-class family of a husband and wife with two kids making $50,000 in household income will see just $10 in “relief” even as they’re paying over $800 in higher taxes.
Pairing this bit of tax code social engineering with state officials’ unchecked spending habits and an exploding pension payment, and the stage has clearly been set for another round of tax hikes. Whether pursued outright or under the guise of “tax reform,” make no mistake: taxpayers are at risk.
Hold on to your piggy bank.