Old tactic vs. new tax plan: Divide and conquer
The fair tax isn’t about who benefits most, it’s about providing all areas of our state with the resources they require
The diversity of Illinois is its strength. (Shutterstock)
By Ameya Pawar and Ted Cox
A new public-relations offensive in opposition to the proposed graduated income tax launched Tuesday with four separate events across the state.
We’re not going to give that group any more hype than it can generate itself, except to point out that those four separate events, with messages tailored to regional grievances, share the same overarching narrative: divide and conquer.
We’ve seen the same tactic deployed in Illinois by Bruce Rauner, and now ratcheted up nationally by Donald Trump. Pit one segment of society against another, create division and animosity in an effort to incite your voting base, in a bid to get just over 50 percent of whatever electorate happens to be voting.
The situation is even more fraught as voters prepare to go to the polls Nov. 3 (or to the post office before then) to vote at the top of the ballot on the statewide referendum to pass the progressive income tax proposed by Gov. Pritzker. Endorsed by the General Assembly — which set tax brackets so that 97 percent of Illinois taxpayers will pay the same or lower taxes, while the top 3 percent earning more than $250,000 a year pay just a little bit more, up to just under 8 percent for top earners making more than $1 million a year — the graduated income tax has to be passed by a supermajority of 60 percent to formally amend the state constitution and end its regressive requirement for a flat tax rate.
Pritzker has called it a “fair tax,” and that’s exactly what it is, asking the well off to pay a little bit more, while providing relief to those struggling to pay that basic tax rate.
But 60 percent approval is a high threshold in any election, and opponents are attempting to play both sides against that considerable middle of 97 percent of Illinoisans in a bid to chip away just enough support to keep it from reaching that required supermajority.
The opposition argument is all along the same thread, but with varying degrees of playing to race and class, with some narratives more muted and some more aggressively racist than others. But what they share is a divisiveness, starting with the idea that everyone outside of Chicago should be suspicious of Chicago, should be wary of Chicago. And Chicagoans and suburbanites, in turn, should be resentful, in that they’re very much paying the bills and everyone else in the state doesn’t like them anyway.
What rubbish.
Two years ago, the Paul Simon Public Policy Institute at Southern Illinois University in Carbondale released a study, “The Politics of Budgeting in Illinois,” countering the popular perception that downstate Illinois subsidizes Chicago with its schools and public housing. The study found just the opposite: that counties at the southern tip of the state get back $2.81 for every dollar they contribute in taxes. Some 50 central Illinois counties — almost half the state total — get back $1.87 for every dollar taxed. Nine southwest counties including Calhoun, Jersey, Madison, St. Clair, Monroe, Randolph, Bond, Clinton, and Washington get back $1.42 on the dollar. And 19 northern counties outside Chicago and its collar counties get back $1.24.
By contrast, Chicago's Cook County gets back 90 cents from the state for every dollar contributed in taxes, and the five suburban collar counties get back 53 cents on the dollar. But, as the study pointed out, that didn’t make the political argument to the contrary any less powerful or pervasive.
A study released a year ago by the Governor’s Office found a progressive income tax would benefit those areas outside Chicago still more, in that those areas have fewer residents making more than $250,000. But here’s the thing: it’s not about counting up who gets more between one area or another or one taxpayer or another. It’s about how the state does as a whole, what’s best for the state and all Illinoisans.
“It’s not about counting up who gets more between one area or another or one taxpayer or another. It’s about how the state does as a whole, what’s best for the state and all Illinoisans.”
Another study conducted about the same time by the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign found that all Illinoisans would benefit from a graduated income tax, which could cut property taxes 10 percent and see the state economy grow $8 billion a year.
Understand, there are small towns across Illinois dying for investment, just as there are midsize towns like Decatur and Rockford trying to make up for disinvestment as factories and manufacturing have left. Chicago, meanwhile, needs infrastructure, as well as the same fair school funding all districts are expecting under the evidence-based formula that has already served to reform education statewide. And suburbanites would sure appreciate that property-tax relief promised in the ILEPI-UIUC study.
And the fair tax will help make sure that they get it — all of those areas in need across the state.
It’s never been about who benefits more, because if that’s the main concern we’re just in a race to the bottom, fighting for scraps in a zero-sum game — just where those divisive forces want us in our fractured political environment. We’re not fighting for scraps. We’re out to supply all areas of the state with the particular resources they need to thrive — infrastructure in the city, rural broadband in farm communities, and affordable housing everywhere.
“We’re out to supply all areas of the state with the particular resources they need to thrive — infrastructure in the city, rural broadband in farm communities, and affordable housing everywhere.”
Chicago advocates have recently cried out for rent control, but their primary issue remains affordable housing. And it’s no different in Paris, a small town of 9,000 along the Indiana border south of Danville.
“We have been very successful at growing industry in Paris, and then we hit a roadblock,” said Bob Colvin, president of the Paris Economic Development Corp., last year in lobbying for funding in a capital bill. “And that roadblock was affordable, entry-level workforce housing.” They couldn’t attract business investment without also supplying prospective workers with a place to live.
Look, the urban-rural divide is real, and it can be exploited by ruthless, self-interested politicians. And the problem is especially acute in Illinois because we have such extremes of vital high-population centers and wide expanses of fertile farmland, and because the tactic has been used at one time or another by politicians on both sides to score political points.
This time, however, the lines are more clear-cut, even though big bucks are going to be spent on both sides in an effort to sway voters over the next few months. On one side, well-to-do elements of the state are trying to figure out ways to tell us how different we are, when what we really have is a unity of purpose to improve all Illinoisans. They’re trying to deprive the state of resources and keep small towns fighting with midsize towns for scraps while claiming the big cities are hogging it all, simply so they can pay less taxes.
They’ve been playing the short game for decades, saying we don’t have the funds to invest in our own people, in our critical infrastructure, in farsighted attempts to address climate change, when really all that’s required is the resolve to do something about it, something like fairly funding the initiatives that promise progress for all.
As John Bouman, chairman of Vote Yes for Fair TaxPay, recently put it: "It's no surprise that wealthy special interests like the unfair old way of taxing income in Illinois, because it's given them a sweet deal for way too long. Working people overwhelmingly support the Fair Tax Amendment because everyone who makes under $250,000 will get a tax cut or pay no more. Fair tax reform also means fair funding for every community and the important services we need now more than ever. When wealthy people pay their fair share, our state will have $3 billion more to invest in health care, schools, human services, and jobs to rebuild our communities stronger and more fairly than before."
What’s most galling right now is the sheer hypocrisy on one side of the argument. As many media outlets, including Forbes, reported just this week, huge blocks of funding in the Paycheck Protection Program intended to provide relief to small businesses in the midst of the coronavirus pandemic went to organizations that fight the very concept of funding the government: Grover Norquist’s Americans for Tax Reform Foundation, which lobbies against taxes of any kind and “educates taxpayers on the true cost of government” and “the realities of costly government programs,” received between $150,000 and $300,000 in loans, and the Ayn Rand Institute, named after the conservative philosopher and trash novelist, which recently argued, “It would be a terrible injustice for pro-capitalists to step aside and leave the funds to those indifferent or actively hostile to capitalism,” and that it would “take any relief money offered us,” eventually pocketed a loan of between $350,000 and $1 million.
As the Rev. Martin Luther King Jr. said more than 50 years ago: “The problem is that we all too often have socialism for the rich and rugged free-enterprise capitalism for the poor. That’s the problem.”
It’s a problem we have the power to do something about this November — for the benefit of all Illinoisans.