Labor leads off long weekend, campaign season with pitch for fair tax
125 Illinois unions with 1M members back graduated income tax
“The wealthy have been given a pass for decades now,” says IFT President Dan Montgomery on a media teleconference Thursday. (Zoom)
By Ted Cox
Union groups launched into the long Labor Day weekend Thursday with a strong pitch for the Fair Tax Amendment in the November general election.
“Our state’s tax system is not fair for working men and women,” said Steve Hughart, a West Frankfort member of the International Brotherhood of Electrical Workers, on a media teleconference organized by the group Vote Yes for Fair Tax and featuring several of the 125 unions statewide in support of a graduated income tax.
“The wealthy have been given a pass for decades now,” added Dan Montgomery, president of the Illinois Federation of Teachers.
“Workers and families need a break,” said Bill Hamilton, a local vice president with the United Auto Workers in Belvidere. “Millionaires and billionaires have used the flat-tax system to shift the burden” away from themselves and on to others, as with other regressive taxes like the gas tax.
“The current structure is wrong,” said Greg Kelley, president of the Service Employees International Union’s Healthcare Illinois division. “Our members fundamentally understand that there’s a problem with the way they’re taxed.”
“When we Vote Yes for Fair Tax, we can cut taxes for everyone under $250,000, make the wealthiest pay their share, and raise $3 billion to fund schools, health care, new infrastructure, and good jobs in every community,” said Illinois AFL-CIO President Tim Drea. “That’s why more than 125 unions with more than 1 million members in every part of our state are endorsing the Fair Tax Amendment and why we urge everyone to vote yes.”
The Fair Tax Amendment will be on top of the ballot, basically as a referendum to alter the state constitution and its requirement for a flat tax rate for everyone — currently set at 4.95 percent. Several labor leaders pointed out that’s regressive by definition, allowing low-wage and middle-class workers far less disposable income (if any) than the well-off after paying taxes. The income brackets approved by the General Assembly last year in passing the proposal would see tax rates rise for those making more than $250,000 a year, to a top rate of just under 8 percent for $1 million earners, while 97 percent of Illinois taxpayers would pay the same as before or a lower rate. Nonetheless, the requirement to amend the constitution calls for more than half of all ballots to be marked in favor, or a supermajority of 60 percent voting yes on that question alone — a high threshold, although statewide polls find public support above that level.
The Labor Day weekend is the traditional start of the fall campaign season leading up to the election Nov. 3, and union leaders pledged to get out the vote in favor even as the pandemic deters traditional electioneering methods, such as holding large rallies and campaigning door to door.
“Simply put, the old way of taxing income puts too much burden on the middle class,” Drea said, “and it doesn’t allow enough investment in our state’s core values.
“Workers who make less than $250,000 per year, whether in a union or not, deserve a break now more than ever. And that is exactly what they will get with the Fair Tax Amendment.”
Illinois AFL-CIO President Tim Drea (Zoom)
“Workers who make less than $250,000 per year, whether in a union or not, deserve a break now more than ever,” he added. “And that is exactly what they will get with the Fair Tax Amendment.”
Bob Reiter, president of the Chicago Federation of Labor, said it would “give workers relief at a time of extreme hardship,” in the midst of the COVID-19 pandemic and the economic collapse it’s caused. “Middle-class wages have stagnated,” he added, and with a flat tax “the deck is stacked against working people.” He called a progressive income tax “a structural reform that can fix things in the long haul.”
The additional $3 billion to be produced in revenue is one of the main arguments in favor for Montgomery and his state teachers’ union, with 100,000 members. The state’s historic failure to accept its constitutional responsibility to be the primary source of education funding has led to a reliance on property taxes to make up the difference, resulting in homeowners in East St. Louis paying an even higher tax rate than those in New Trier Township. With school nurses, counselors, and social workers all well below recommended staffing levels due to insufficient funding, he said, “We are cheating our children. … We can’t address it if we keep relying on local property taxes to fund education. We’ve got to have the state come through. And that’s why the Fair Tax Amendment is the right way to go. It’s doing right by the children of the state of Illinois.”
Montgomery added, “The essence is our future. If this state is going to grow and thrive and we’re going to offer a promising future to our children, we’ve got to pass the Fair Tax Amendment.”
Proponents of the progressive income tax have pointed out it’s based on taxing income where it’s growing in the state economy, not where it’s stagnant or in decline — a key to recovering from the economic calamity brought on by the pandemic. Pointing out that a graduated income tax is based on the “capacity to pay,” Reiter insisted, “This is about equity and fairness.”
“They can afford it. Sure they can,” said Nancy Alverio, a nurse at Stroger Hospital in Chicago and a member of National Nurses United. “The alternative is tax hikes for everyone or harmful cuts to basic services and jobs. That won’t get Illinois back on its feet.”
Hamilton said it was essential to “get Illinois back to work,” adding, “We can get past this to build a stronger Illinois.”
Reiter dismissed opposition to the graduated income tax based on corruption charges made against House Speaker Michael Madigan as “a distraction” and “a red herring,” labeling it a cynical attempt to “protect millionaires and billionaires … to protect right guys on the right” of the political spectrum.
Later Thursday, the Illinois State Board of Elections reported a $20 million contribution made by billionaire Ken Griffin, founder of the Citadel hedge-fund investment firm, to the Coalition to Stop the Proposed Tax Hike Amendment. According to ISBE records, Richard Uihlein, Sam Zell, and Craig Duchossois had all previously given $100,000 apiece to fund the lobbying effort to defeat the Fair Tax Amendment.
“Ken Griffin is awful in many ways, but he's a savvy investor,” tweeted former state senator and gubernatorial candidate Daniel Biss. “If you accept this report that he made $870 million in 2018, then the fair tax would cost him $26 million in a year like that. No wonder he's willing to spend $20 million to avoid paying it.”
“Uber-rich guys like Ken Griffin don't donate $20 million to fight fair tax just to line their own pockets more,” added state Rep. Greg Harris of Chicago. “It's key to the ‘starve the beast’ strategy forcing cuts to public schools and universities, Medicaid, worker pay/benefits & jobs. Riches for them. Austerity for us.”
Vote Yes for Fair Tax Chairman John Bouman issued a statement Friday saying: “Yesterday — the day that unions representing more than 1 million Illinois workers stood up to support fair tax reform — the state's richest billionaire Ken Griffin spent $20 million to protect the broken status quo. Griffin took home $1.5 billion in 2019 alone, yet paid the same state income-tax rate as teachers, nurses, grocery-store clerks, and other essential workers. That’s wrong, and it's exactly why Illinois needs the Fair Tax Amendment. To end the sweet deals for the super-rich, cut taxes for everyone under $250,000 a year, make the wealthy pay their fair share, and invest in shared priorities like education and health care, it's time to Vote Yes for Fair Tax.”
“It’s time to change the tax system in Illinois,” Drea said Thursday on the teleconference. “You talk about what’s corrupt, that’s what corrupt” — the current regressive flat tax and its demand that taxes be raised on everyone or no one, resulting in a system weighted against any significant revenue reforms.
The labor leaders agreed the issue is at the top of the ballot — and the top of their political agenda. Montgomery insisted, “This is our No. 1 priority for the fall — the fair tax.”
“This is not about politicians,” Reiter said. “It’s about working people.”