Pritzker on progressive tax: ‘No guarantees’ against middle-class tax hikes
Gov. J.B. Pritzker has made middle-class tax relief a core promise of his “fair tax” plan. But now he says there are “no guarantees” he’ll keep it.
Gov. J.B. Pritzker began his governorship by pressing the need for a “fair” income tax at his Jan. 14 inauguration. But his promise of relief to Illinois’ middle class has aged poorly.
In an ABC 7 interview marking Pritzker’s first 100 days an office, the governor said he could not promise his “fair tax” proposal would shield those earning less than $250,000 from further income tax hikes, but that he’d continue fighting for it nonetheless.
“As you know, we currently live in a system in which the taxes can be changed at any moment so there’s certainly no guarantees,” Pritzker said. “But what I will tell you is that I am fighting for the plan that I put forward.”
This contradicts Pritzker’s promise that 97% of Illinois would not see a tax increase under the “fair tax” plan, a claim that has been repeated in mailers and TV ads by Think Big Illinois, an advocacy group that lists Pritzker among its donors.
And it’s an even further leap from the rosy promise Pritzker initially made after unveiling his proposed progressive tax rates: that 97% of Illinoisans would actually see a tax cut. Pritzker’s office began walking back that claim in March.
The ongoing revisions to Pritzker’s signature promise in selling the progressive tax should come as little surprise. Illinoisans are used to politicians breaking promises of income tax relief. They shouldered a record income tax increase in 2011, bringing the income tax rate to 5%. State lawmakers promised that tax hike would partially sunset in 2014 to 3.75%, and sunset again in 2025 to 3.25%. But they broke their sunset promise in 2017 with the largest permanent income tax hike in state history, hiking the rate back up to 4.95%.
In a state where high taxes have caused a worsening outmigration crisis, this should invite skepticism from state lawmakers. IRS data suggest Pritzker’s plan would only exacerbate Illinois’ people problem.
Moreover, the claim that a progressive income tax hike wouldn’t drive wealth out of the state is belied by the behavior of the billionaire governor himself. On April 24, WBEZ reported Pritzker, his wife and brother-in-law are the subjects of a federal criminal investigation for securing a questionable $331,000 property tax break on one of their Chicago mansions.
But Pritzker’s failure to live up to his own ideal of “fairness” is far from the only reason to reject his progressive tax plan. The nonpartisan Tax Foundation found in a report that a progressive tax system in Illinois would plunge the state’s already-hostile business climate to 48th out of all 50 states. An Illinois Policy Institute analysis that found Pritzker’s “fair tax” proposal – hiked to the level necessary to fund his spending promises – would cost the state economy 286,000 jobs.
The failure of Pritzker’s “fair tax” would not be without precedent. Take Connecticut, the only state in the last 30 years to switch its income tax system from flat to progressive. The state’s economy shed 362,000 jobs and $10 billion in the years since making that change, while watching its poverty rate soar.
Instead of pushing a flawed tax hike plan in hopes of boosting revenue, the governor should push for structural reforms that allow the state to stop squandering revenue.