Daily Debunk: General Assembly has the power — no more, no less
Springfield legislators already control tax policy
All roads run through the state Capitol and the General Assembly when it comes to raising taxes in Illinois. The Fair Tax Amendment doesn’t alter that. (One Illinois/Ted Cox)
By Ted Cox
Today’s Daily Debunk concerns the third of the Illinois Policy Institute’s recent “7 Misleading Progressive Tax Claims Public Unions Are Telling Illinois Members,” and it’s one of the most-often-repeated pieces of misinformation.
Misleading claim No. 3: The progressive tax won’t give lawmakers any more or less power to increase taxes than they’ve always had.
That’s in fact the case. The General Assembly has the power to raise taxes, and the Fair Tax Amendment on top of the ballot Nov. 3 doesn’t give it any more power to do so than legislators have already. But the IPI once again argues at cross purposes with something of a non sequitur.
Reality: It is easier to raise taxes under a progressive income tax than it is under the current flat tax.
That’s nothing about the power to do something; it’s about the ease of actually doing it. And on that note we have to once again allow that the IPI is correct — as long as you reconsider the context.
The IPI takes two factual statements and places them side by side, suggesting that one argues against the other. Fact is, they bolster one another.
The IPI accurately points out that, under the state’s current mandate for a flat tax rate, set the same for all taxpayers, “it’s all or nothing; they raise income taxes on everyone or no one. And that encourages political accountability through public outcry.”
As we’ve stated before, for 50 years that’s made it next to impossible to raise taxes in Illinois, with the consequence that state government has not been sufficiently funded. That anti-tax dynamic, needing additional revenue without being straight with voters about where it comes from, led directly to the General Assembly adopting the so-called pension holidays — endorsed by bother major political parties — that put public pension funds in arrears.
You want to know the main culprit for the state’s underfunded pensions? The regressive flat tax is Public Enemy No. 1.
The Fair Tax Amendment is going before the voters needing a 60 percent supermajority to pass because it’s altering the state constitution just to allow a graduated income tax. Both houses of the General Assembly already did the same last year, sending the matter on to voters for final approval. The tax brackets set separately by the General Assembly last year establish a system in which 97 percent of Illinois taxpayers will see their taxes cut or remain the same as the current 4.95 percent flat tax, while only those making more than $250,000 a year pay more, up to a top bracket of just under 8 percent for those earning more than $1 million.
Now, the IPI likes to argue that if the General Assembly can slice off the top 3 percent of wage earners to take the hit this time, it can slice off 10 or 20 or even 49 percent in the middle class next time, and — here’s where it gets comical — it cites the 2018 election as proof.
We’ve said it before, we’ll say it again again: the Fair Tax Amendment gives the legislature no more power to raise taxes than it already has. The key word here is “accountability.” Legislators, representing their constituents, remain accountable for the votes they cast. But the “political accountability through public outcry” the IPI mentions doesn’t always play out the way the anti-tax organization would like.
The blog post cites that “about 30 percent of the lawmakers who voted for the 2017 tax hike were either forced to retire or voted out of office” two years ago. It conveniently ignores that many of those were Republicans who voted to override then-Gov. Bruce Rauner’s veto to increase the flat tax from 3.5 percent to the current 4.95 percent in order to pay for the new “evidence-based” school funding formula adopted by the same legislature, which better balanced education funding across the state to the benefit of the public schools in those very same Republican districts.
Let’s recall how that played out at the ballot box. The state Senate increased its supermajority for Democrats, the state House attained a Democratic supermajority, and J.B. Pritzker, running on a platform including the adoption of a progressive income tax, soundly defeated Rauner and his anti-tax austerity administration.
That sounds like a pretty clear voter endorsement, and basically the other shoe drops on that mandate to adopt a graduated income tax this fall. Voters simply have to follow through on the direction they put the state in last time.
And, last time we checked, the legislators running for reelection this fall seem pretty comfortable with the votes they cast on the Fair Tax Amendment and the tax brackets set last year. We think they’re more than ready to be held accountable, and we’ll see how things shake out Nov. 3.
Here’s what the IPI isn’t telling voters, however. A study published by the Government Finance Research Center at the University of Illinois at Chicago earlier this year found that graduated income taxes were actually much more stable and less likely to be tinkered with than regressive flat taxes. The study results, published in a UIC blog post, found that actually for the decade of the 2010s graduated state income taxes were more stable than flat-rate income taxes. And, in the rare instances that progressive tax rates were changed, they were actually more likely to be lowered and not raised.
Now, we only hope that the IPI will somehow be held accountable for the lies and misinformation it’s spreading on the Fair Tax Amendment. That responsibility would appear to fall to us at One Illinois.