SPRINGFIELD, Ill. (May 1, 2019) – The Illinois Senate today passed Senate Joint Resolution Constitutional Amendment 1, despite evidence from all 50 states proving progressive income taxes hurt job growth and fail to reduce income inequality.

The amendment would eliminate Illinois’ flat income tax protection, allow lawmakers to pass new types of income taxes on the same dollar earned, and open the door for the nation’s highest tax on business income.

The nonpartisan Illinois Policy Institute testified against the bill during its Senate Executive Committee hearing and was the first to find the governor’s tax revenue projections fall at least $1 billion short.

Adam Schuster, budget and tax research director at the Illinois Policy Institute, offered the following statement:

“As the progressive income tax proposal passes the Senate, Illinois lawmakers are not only walking the plank blindfolded – they’re taking their constituents with them.

“Lulled by the misleading ‘fair tax’ label, Illinois senators overlooked all the evidence proving the state’s economy and its taxpayers would suffer under a progressive income tax structure.

“Given the history of state spending and the looming public employee pension crisis, a progressive income tax in Illinois is a bridge to higher taxes. Evidence shows this experience in all other states that have adopted a progressive income tax structure: the tax structure is frequently revised so middle-income families see their taxes rise.

“Recent Illinois history shows the importance of our state’s flat income tax protection. Many Illinois lawmakers resigned or were voted out of office following the 2017 flat income tax hike, highlighting the political barriers to hiking this tax. But a progressive income tax structure allows lawmakers to skirt backlash from voters despite hiking taxes more frequently. By segmenting small sections of the population to increase taxes on one group at a time, lawmakers can gradually raise taxes on everyone.

“This politically expedient and unfair trick on taxpayers has been detrimental for most states’ economies. Since the end of the Great Recession, states with highly progressive income taxes have seen their economies, wages, employment and labor forces grow slower than the national average. Further, states with the most progressive income tax codes see higher income inequality. Meanwhile, states without a progressive income tax have seen their economies grow faster.

“Taxpayer trust is already low. As the governor pushes his so-called ‘fair tax,’ he’s also facing a federal investigation for not paying his own fair share. Pritzker has already walked back his promise of providing tax relief to 97% of Illinois taxpayers, and that’s only the beginning of this scheme.

“Lawmakers must instead pursue bipartisan reforms already filed in the General Assembly that fix a broken pension system and align growth in spending with what taxpayers can actually afford. Only then can middle-class Illinoisans begin to trust that they will not see further income tax hikes.

“Don’t let your state representatives tax their way out of Illinois’ problems without fixing any of the things that got us here. Tell them to vote ‘no’ on a progressive income tax.”

To read about the economic effects of a progressive income tax in Illinois, visit: illin.is/fairtax

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