SPRINGFIELD — Admitting it will take two years to see any new revenue from a progressive state income tax, Fair Economy Illinois has ideas for raising money in the meantime.
Joined by several lawmakers, including House Majority Leader Greg Harris, D-Chicago, the progressive advocacy group had a news conference Wednesday to lay out plans for raising $433 million in new state revenue.
The first plan, sponsored as House Bill 2085 and Senate Bill 1115 by Rep. Harris and Sen. Heather Steans, D-Chicago, would curb some loopholes in offshore tax havens. The group estimates this could bring in $318 million.
“Illinois right now is losing $1.3 billion in taxes that corporations or wealthy individuals have managed to shelter in other countries,” Harris said. “The bill I’m introducing is a step toward reclaiming some of that revenue.”
The bills specifically address “water’s edge” tax reporting, a way of shifting a domestic business’s or individual’s profits to an offshore entity where different taxes apply.
According to Harris, 11 other states have closed similar loopholes.
Fair Economy Illinois’ second plan is to eliminate the “retailers’ discount” tax break, which is estimated to bring in $115 million.
Rep. Will Gazzardi, D-Chicago, is sponsoring House Bill 2079, which he says covers an “obscure provision” in Illinois law from more than 100 years ago that has gotten out of control.
According to Gazzardi, Illinois collects sales tax dollars from retailers, but rebates a portion of those dollars to help cover a business’s cost of calculating the sales tax.
“This was passed [back] when calculating the sales tax was a very labor-intensive and difficult process — using slide rules and [an] abacus,” Gazzardi joked.
But the consequences of the law are serious. Walmart, according to Fair Economy’s release, retains more than $8 million a year through this provision.
“Big box retailers are doing hundreds of millions of dollars of business in our state,” Gazzardi said.
He added that they don’t need millions in tax breaks for something that can be “done by a computer” with “relatively affordable software.”
The bill would, however, keep the sales tax calculation rebate for small businesses — up to $1,000.
With this cap in place, the bill would not affect 85 percent of the businesses in Illinois, according to Sen. Omar Aquino, D-Chicago, who is sponsoring the Senate version of the bill (SB1132).