Early voting: What to know about the ‘fair tax’ ballot language

September 22, 2020

Illinois Policy Institute experts are available to discuss how to make an informed decision on the progressive tax amendment

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ILLINOIS POLICY INSTITUTE

MEDIA CONTACT: Rachel Wittel (312) 607-4977

Early voting: What to know about the “fair tax” ballot language 
Illinois Policy Institute experts are available to discuss how to make an informed decision on the progressive tax amendment

CHICAGO (Sept. 22, 2020) – Starting Thursday, Illinoisans have their first opportunity in 50 years to vote on how their income is taxed. But state-issued ballot guides hitting Illinoisans’ mailboxes ahead of early voting contain misleading arguments about Gov. J.B. Pritzker’s progressive tax, which are then repeated in the ballot description for the amendment.

The description of the “fair tax” question states it targets higher-income earners. That is not so: the amendment gives lawmakers the ability to charge any rate for any income group, not just high-income taxpayers. That inaccurate ballot language potentially violates the “free and equal elections” clause of the Illinois Constitution.

Experts from the Illinois Policy Institute are available to explain the misleading progressive tax arguments featured in its ballot description.

Top misleading claims:

  • “This amendment would make Illinois’ tax system fair.”
    Any relief proposed by Pritzker’s progressive tax would be wiped out by the 20 tax and fee hikes he passed last year. The “fair tax” fails to lower Illinoisans’ property taxes, which are second-highest in the U.S., and leaves the poorest Illinoisans paying the nation’s third-highest overall tax burden. While it might sound fair to tax higher incomes at higher rates, the amendment itself does not set rates, allowing lawmakers to change and target income groups with a simple majority vote.
  • “This amendment does not tax retirement income.”
    Across the nation, 32 states have a progressive income tax system. They all tax some form of retirement income. This amendment would enable Springfield to begin taxing retirement income above a certain level, but then gradually lower the exemption threshold to raise additional revenue, slowly adding more Social Security and pension income to the tax base.
  • “This amendment will help small business owners.”
    The governor’s introductory rates would raise taxes up to 47% on more than 100,000 small business owners, organized as “pass-through” entities. This would devastate the state’s biggest job creators just as they’re trying to recover from COVID-19. The initial rates would also raise Illinois’ corporate tax rate to the second highest in the nation.
  • “The federal government and most states use the graduated tax system.”
    While both the federal government and 32 states allow for progressive tax powers, half those states charge the same maximum tax rate to billionaires as they charge the middle class, or people earning around Illinois’ median family income of $79,168. That means working people such as nurses, first responders and grocery clerks would be left paying the same top rate as Pritzker.

Quote from Adam Schuster, senior director of budget and tax research at the nonpartisan Illinois Policy Institute:

“Proponents of a progressive tax in Illinois have long used misleading claims about fairness, but official government documents mailed at taxpayer expense and ballot explanations should be free of factual errors and contextless claims. Eliminating Illinois’ flat tax will neither make its tax system fairer nor relieve overtaxed businesses and working families. Its only real offer is $6 back to low-income Illinoisans who already pay about $1,800 in state and local taxes – a higher share of their income than residents in all but two states.”

To learn more about the progressive tax ballot language, visit: illin.is/misleading.

For bookings or interviews, contact media@illinoispolicy.org or (312) 607-4977.