Illinois lawmakers introduce resolution to take progressive income tax off ballot

Removing the progressive tax question from the Nov. 3 ballot would give over 100,000 small businesses some certainty as they struggle to recover from the COVID-19 shutdown.

State lawmakers introduced a resolution May 18 to remove the progressive income tax from the November ballot. House Joint Resolution 123 requires a simple majority vote from lawmakers, a move that could boost the COVID-19 economic recovery.

The COVID-19 pandemic has pushed Illinois’ economy to the edge with over 1 million residents out of work and business across the state shuttered. The progressive income tax amendment on the Nov. 3 ballot would make Illinois’ economic situation significantly worse, especially for small businesses.

“This has become the worst time possible to enact an income tax hike that will severely affect Illinois residents and small business, all to fulfill a campaign promise for the governor,” House Minority Leader Jim Durkin, R-Western Springs, said in a press conference.

If the amendment passed, over 100,000 small businesses could face tax hikes as they struggle to recover from the pandemic’s impacts. A tax hike would likely force many businesses to close or leave the state, taking more jobs away from over 1 million Illinoisans idled by the pandemic and related orders.

“The progressive tax is a big joke,” said Denetta Flamingo, who owns a finesses center in Ottawa, Illinois. “[Gov. J.B. Pritzker’s] already taxed the hell out of us as it is. He’s going to take anything we all make when we’re trying to reopen? Well, he’ll get zero tax on our zero income.”

Durkin called the progressive income tax “another cash grab by the state” and said it was an opportunity for Democrats to raise taxes and break more promises.

Senate Minority Leader Bill Brady, R-Bloomington, said the question must be removed from the ballot to bring some sense of normalcy to Illinois voters. He said now is not the time for lawmakers to push an agenda surrounded in uncertainty. He said he worries voters will be misled by false promises if the amendment is left on the ballot. Brady said the progressive income tax is based on false revenue projections that will require tax hikes.

Small businesses could see their taxes increase by 47%, reaffirming this is a “blank check” for lawmakers to keep spending without regard for taxpayers’ ability to pay. The typical Illinois family would have to pay anywhere between $286 and $1,056 more under a progressive income tax if lawmakers rely solely on increased revenue to offset income tax revenue losses from the COVID-19 outbreak. Pritzker has said the pandemic has made the progressive tax more important than ever.

“The recession caused by this pandemic will turn into a never-ending depression in Illinois with the progressive tax,” Durkin said.

Economists are in near-unanimous agreement: reducing the harm of recessions requires expansionary monetary and fiscal policy. That means avoiding tax hikes while spending on the programs Illinoisans truly need.

This approach is bipartisan. In 2009, then-President Barack Obama responded to a question about evidence for hiking taxes in a recession as follows: “[The questioner’s] economics are right. You don’t raises taxes in a recession.”

“What’s left to tax,” wondered Dave Jordan, who owns The Wagon restaurant in Decatur. “You put this progressive income tax on the ballot – you don’t see how that’s going to make things better. The old saying, you can’t tax your way out of poverty … or into prosperity.”

Last spring, state lawmakers passed Senate Bill 687, which would put the graduated income tax rates between 4.75% and 7.99% beginning Jan. 1, 2021. Under a progressive income tax, the poorest Illinoisans would save just $6 annually on income taxes.  When factoring in other taxes residents pay, such as last year’s fee hikes on gas and vehicle registration, potential savings for taxpayers are more than wiped away.

“Having a progressive tax is going to do nothing but hurt people more,” said Steve Bellows, an Uber driver struggling to make ends meet during the pandemic following four surgeries.

Lawmakers just need a simple majority vote on HJR 123 to remove the progressive tax question from the November ballot. In doing so, they can support economic recovery from the pandemic and reassure taxpayers and businesses that they will not be subjected to unending tax increases to pay for the state’s lack of financial controls.