SPRINGFIELD — Democratic lawmakers said Thursday the only alternatives to a graduated income tax the state has are to make cuts across the board, including to schools and social services, or raise the income tax by 20 percent on everyone.
Sen. Don Harmon, an Oak Park Democrat, said over the next several weeks, lawmakers will begin moving a resolution through the House and Senate to put a referendum on the ballot in 2020 so voters can choose whether to change the Illinois Constitution to allow for a graduated income tax.
“I am confident, as I was two years ago and four years ago and six years ago, that the voters will support that,” Harmon said.
He pointed to a recent poll done by the Paul Simon Public Policy Institute that found 67 percent of respondents favoring the graduated tax plan.
Gov. JB Pritzker's initial version of his graduated income tax plan would raise taxes on those earning more than $250,000 a year. People earning more than $1 million or more per year would be taxed at the top rate of 7.95 percent. The current income is 4.95 percent for all individuals, regardless of income level.
Pritzker's office has said that 97 percent of Illinois taxpayers will pay the same amount or less in income taxes with a graduated income tax.
Additional data released by the Pritzker administration on Thursday shows that less than 1 percent of filers will pay more in more than half of Illinois’ 102 counties.
In Peoria County, in the 2016 tax year, 97.32 percent of the county's 81,025 tax filers made $250,000 or less, meaning they wouldn't see an increase, Pritzker's office said. About 0.22 percent, or 178 people, in the county made more than $1 million and would be taxed at the highest rate.
Sen. Andy Manar, D-Bunker Hill, said those who have been doing well in the state’s economy need to “step up and pay their fair share” to help state government.
“As the chair of the Appropriations Committee, I’ve been watching what opponents of the fair tax plan and what Republicans that we serve with have been saying, to not just to media but people around the state, and they’ve been painting a picture of a budget that can be balanced without the fair tax plan,” Manar said. “I challenge not just Republicans, but opponents of the governor’s plan, to produce that budget. I think they’re obligated to do it.”
Rep. Mike Zawleski, D-Riverside, said without fair tax reforms, there will be a 15 percent cut across the board to balance the budget.
Sen. Toi Hutchinson, D-Olympia Fields, said cuts are something the state has seen before and not something it should repeat again.
“We are committed to making sure when we turn this state around, that we do it in the most fair, balanced way that’s possible,” Hutchinson said. “Saying no to a fair tax right now is literally saying no to working families, it’s saying no to schoolchildren, it’s saying no to our social services safety net, it’s saying no to the people that we came here to protect.”
Opponents of a graduated income tax warn that the system will make it easier for lawmakers to raise income taxes on upper-income levels, as well as middle-income taxpayers.
Earlier this week, Senate Republicans filed a proposal that would require the House and Senate to approve any kind of tax increase by a two-thirds vote. That is higher than the three-fifths standard that lawmakers need to override a veto by the governor or even to put the proposed graduated tax amendment on the ballot.
“One of the concerns we have is, there simply is not significant protections to ensure that tax rates or tax structures in the future are not going to be jacked up,” Sen. Dan McConchie, R-Hawthorn Woods, said Tuesday.