A coalition of progressive groups is beginning to coalesce around a proposal to create a progressive income tax in Illinois. Under their plan state income tax rates will increase as one reaches higher incomes, up to a top rate of 11 percent for incomes over $1 million. This plan would leave Illinois with one of the highest income tax rates in the country, increase Illinoisians tax bills by more than $8 billion, and would most likely drive entrepreneurs and jobs from the state.
And if one digs beneath the surface of this plan, one finds government employee unions as a major source of money for supporters of the tax.
Among the earliest advocates of this tax has been the Center for Tax and Budget Accountability and its executive director Ralph Martire. Martire has been a regular on the policy lecture circuit, hawking the progressive tax as the best way to solve what he considers a funding shortfall in Illinois state government. According to union financial reports filed with the Department of Labor, CTBA has been a major beneficiary of union largess, taking in $75,000 from AFSCME District Council 31, $30,000 from the SEIU Illinois State Council, and another $25,000 from SEIU Local 73 — all of that in 2011 alone.
Citizen Action Illinois is another group that is pushing for a “soak the successful” tax plan, and it has also benefited from a $100,000 donation from AFSCME.
The government employee union interest is plain: Illinois budget is in a crisis, largely thanks to exploding government employee pension and health care costs. The unions want to avoid any restructuring of the benefits, and are terrified of the prospect that the state might reduce its workforce, which would among other things, reduce the number of workers from whom they can collect dues. Naturally the unions would prefer that Illinois deal with its budget problems by increasing revenues.
Whether or not Illinoisians will support a progressive income tax remains to be seen, but the unions are on board already. Savvy voters will keep in mind who stands to pay, and who stands to gain.