Daily Debunk: Tax foes shocked over 'new' threat

Pritzker actually warned of 20 percent tax hike in first budget address also introducing ‘a fair income tax’

Gov. Pritzker made first formal mention of “a fair income tax” in his first budget address a month into his term in office — including a warning that a 20 percent tax hike would be necessary without it. (Facebook)

By Ted Cox

Opponents of a graduated income tax in Illinois are shocked, shocked that the governor is threatening to increase taxes 20 percent if the Fair Tax Amendment fails to pass with voters.

On Monday, a Chicago Tribune editorial decried what it called “a new threat” to raise the state’s flat tax rate if the progressive income tax fails to gain a supermajority of 60 decent in the Nov. 3 general election.

That followed Lt. Gov. Juliana Stratton’s remarks in a “virtual rally” for the Fair Tax Amendment on Thursday warning that a flat tax would have to be raised 20 percent to balance the state budget. The next day, House Minority Leader Jim Durkin decried that as “intimidation and scare tactics.”

“This was a message the governor should have delivered,” the Tribune Editorial Board scolded.

Here’s the thing, though: Gov. Pritzker first warned of a potential 20 percent tax hike in his very first budget address, a month after taking office, in February 2019. In the very same speech, he spoke of “a fair income tax” as a solution. Two weeks later, he laid out his proposal for a progressive income tax, with brackets that have basically held true to that initial vision: a higher tax rate only for those making more than $250,000 a year, with 97 percent of Illinois taxpayers paying the same or less than they are now under the current 4.95 percent flat tax.

The General Assembly approved a graduated income tax that spring, sending it on to voters in the general election this fall with Pritzker’s initial brackets only slightly altered up to a top tax rate of just under 8 percent for those making more than $1 million a year. The actual Fair Tax Amendment, however, only changes the state constitution to allow a graduated income tax.

None of that has changed over the last year and a half.

Now, journalists have notoriously poor memories. Dealing with news on a daily basis tends to leave old facts and information buried under the new — especially in these turbulent times. But one might well expect better from the Tribune Editorial Board — or Republican politicians who were on site at the state Capitol for that budget address.

So here’s a little refresher for the newly outraged. Early in 2019, Pritzker laid out a structural budget deficit of more than $3 billion he’d been left by his predecessor, Bruce Rauner. Here, we’ll quote our own story from Feb. 20:

“He explained how more than half of the state’s $39 billion annual budget goes to pensions, debt, and federally mandated programs, and that the balance of ‘discretionary spending’ includes ‘the money we spend educating our children, running our colleges and universities, keeping our streets safe, preserving our natural resources, getting people to and from work efficiently, and caring for our veterans.’

“Pritzker rejected an approach that would only cut spending, saying that would result in slashing those programs 15 percent across the board. ‘This option was tried in the prior administration, and it failed,’ he said. He also rejected raising revenue only through taxes and fees under the current regressive tax structure, saying that would call for a 20 percent tax hike. Instead, he advocated what he called ‘a fair income tax,’ to ‘ask the wealthiest to pay just a little bit more,’ including himself.”

Pritzker rejected any more budget cuts after Rauner had “hollowed out” social-service programs, and a month later, when he laid out his proposal for a fair tax, he defended that position and invited Republicans to respond, saying, “I respect the rights of opponents to disagree with this proposal, but they should do so in good faith, with a specific counterproposal, not pie in the sky.”

Eighteen months later, Republicans and the Trib Editorial Board have yet to lay out exactly where they’d cut to achieve the needed cuts to balance the budget, unless you count the editorial’s reference to “lavish overhead costs that drive spending in Springfield.”

Regardless, it’s hard to be genuinely outraged over threats first made more than a year and a half ago. But it’s easy to be outraged on a daily basis over repeated claims, made again in the Trib editorial, that the Fair Tax Amendment is “not just a tax increase but a scheme of graduated rates that politicians likely will exploit — just as soon as they can — to soak middle-class taxpayers too.”

Neither the Fair Tax Amendment nor the brackets established by the General Assembly make any reference to raising taxes on the middle class. In actual fact, the governor and legislators have insisted that a progressive income tax actually works to protect middle- and low-income taxpayers. And here’s some of the fine print from those brackets: they actually cut the tax rate to 4.9 percent for middle-income taxpayers making up to $100,000.

Any additional changes to the tax brackets would have to be approved by state legislators and signed by the governor, who would then have to make the case to defend them with voters. That’s not a “scheme,” that’s the way our representative democracy functions.

That’s the simple truth. Permit us to say that any speculation beyond that constitutes real “intimidation and scare tactics.”