This election cycle is the most bitterly polarizing in recent memory. The life-altering impact of a global pandemic and civil unrest arising from racial injustice have magnified our divisions as a nation in unprecedented ways.
In Illinois, the question of whether to amend the state's constitution to allow for a graduated income tax is, unfortunately, no exception. In Southern Illinois, dueling yard signs, both pro and con, tell the story in our residents’ front lawns. You can bet Biden/Harris signs adorn the same lawns as many of those “vote yes on the Fair Tax” signs, while anti-Pritzker signs are often staked along with the others.
But there is evidence showing the tax could unite some of us.
The amendment would repeal Illinois’ flat income tax of 4.95% and instead tax variable rates dependent on income. The federal income tax is graduated, as are the state income taxes of most states.
It makes little sense to split ourselves according to party lines on this issue. This past February, Southern Illinois University’s Paul Simon Public Policy Institute polled 1,000 registered voters and found they favored a graduated income tax by a 2-to-1 margin, and 55% of downstate voters supported it. The institute asked a similar question the year before and ended up with similar results.
As John Jackson, a visiting professor with the Simon Institute, said of the poll results in The Southern last week, “It’s been very consistent way before all of this got going with the governor’s backing.”
Jackson, of course, is referencing Gov. J.B. Pritzker’s support of the proposal, which was a major component of his successful campaign for governor. The governor’s connection to the ballot initiative is a surefire way to ensure downstate voters are suspicious of it.
Opponents of the graduated tax argue the change in the income tax system would allow the Democratic-majority General Assembly to spend irresponsibly. The term “blank check” is a common one in opposition arguments. Opponents say the change in tax structure would open the door to taxing retirement income. They also claim higher taxes on higher income earners would drive Illinois population loss.
Tax increases at some point in the future remain a possibility, and the old adage that taxes are one of the only two sure things in life certainly applies. Taxing retirement income will remain unpopular — graduated system or no — and the amendment itself would not change whether retirement income could be taxed.
In Southern Illinois, the vast majority of taxpayers would see a decrease in their income tax bills under the amendment — or would pay the same rate we’re paying now. A great majority of our households sit below the $250,000 threshold at which rates would go up under the graduated system.
Southern Illinois would undoubtedly benefit from a graduated tax system in more ways than our tax bills. We receive more financial support from Springfield than we pay into state coffers. The wealthiest residents in northern Illinois would help to fund downstate local school districts, universities, community colleges and prisons — all of which drive downstate jobs and breathe life into our local economy.
The budget picture in Illinois isn’t pretty. We have billions in unfunded pension liabilities. We still in many ways are reeling from the two-year budget impasse — a partisan fight that saw stoppages in local services. On top of it all, the COVID-19 pandemic is walloping state budgets across the country. Illinois is no exception.
There are political problems here, no doubt. The graduated tax is not a magic wand that fixes them. We all use services that are funded by income taxes, and someone has to pay the bill. But the graduated system provides some relief for those of us who need it, and ensures those who can afford it are helping to lift us all up.
Southern Illinois only stands to gain from a graduated tax structure, and deserves the strong consideration of local voters.