Flashback: What Illinois lawmaker’s progressive tax plan looked like 5 years ago

Here's what the progressive tax looked like nearly five years ago when state lawmakers were pushing a plan to tax Illinoisans $3.6 billion more, starting with those making $17,300.

State Sen. Robert Martwick, D-Chicago, just floated the idea of again asking voters to scrap the Illinois Constitution’s flat tax guarantee so lawmakers could set rates through a progressive state income tax. Here was Martwick’s plan from five years ago when he was a state representative.

Originally published March 7, 2018

Proponents of scrapping Illinois’ constitutionally protected flat income tax say they just want to hike taxes on the rich. But a proposal in Springfield lays bare the true intentions of a progressive tax in Illinois: hiking taxes on the middle class.

A progressive income tax proposal introduced by state Rep. Robert Martwick, D-Chicago, would constitute a tax hike for a vast majority of Illinois taxpayers, starting with individuals earning as little as $17,300 (for a single filer with no dependents). The proposal has been assigned to the House Growth, Reform and Fairness Subcommittee, which is scheduled to meet March 8.

House Bill 3522 – known as the Fiscally Responsible Illinois Entering New Days and Leaving Yesterday, or FRIENDLY, Act, proposes the following income tax rates:

• 4 percent for income between $0-$7,500
• 5.84 percent for income between $7,500-$15,000
• 6.27 percent for income between $15,000-$225,000
• 7.65 percent for income above $225,000

This plan, which is estimated to raise an additional $3.6 billion, is a 21 percent income tax increase.

Under Martwick’s proposal, the lowest paid public-school teacher in the state – making a base salary of $26,768 – would see his or her income taxes increase by $124, a 9 percent hike.

The median family in Illinois with two kids, making $73,714 according to the U.S. Census Bureau, would see their income tax bill go up an additional $665. Don’t forget that same family shouldered the largest permanent income tax hike in Illinois history last summer, which increased their income taxes by $789.

Instituting this progressive tax plan would require an amendment to the Illinois Constitution to scrap the state’s constitutionally protected flat tax. Three proposals currently in the General Assembly would to do just that.

Not only would Martwick’s proposal take money out of middle-class pocketbooks, it would also do damage to the state’s already-weak economy. The economic impact of adopting this progressive income tax proposal would likely be similar to the impact of the 2011 and 2017 tax hikes.

The 2011 income tax hike cost Illinois’ economy $56 billion and 9,300 jobs. And the quality of jobs available declined due to decreased investment.

Further damage to the state’s economy will only fan the flames of Illinois’ outmigration crisis, leading fewer Illinoisans to shoulder the cost of out-of-control spending in Springfield. This runaway spending is what led to the 32 percent income tax hike in 2017, and why lawmakers such as Martwick are now proposing raising taxes yet again.

Instead of saddling taxpayers with a higher income tax burden, lawmakers need to rein in the growth of government spending with a spending cap. State Sen. Tom Cullerton, D-Villa Park, and state Rep. Allen Skillicorn, R-East Dundee, have both filed constitutional amendments tying growth in state spending to growth in the state’s economy: SJRCA 21 and HJRCA 38.

Adopting these proposals will avert the need for future tax hikes, and put the state on a path to pay down its backlog of bills and eventually to provide real tax relief to all Illinoisans.

If lawmakers fail to rein in spending, taxpayers will continue to see cruel proposals such as the FRIENDLY Act.