By David Stanczak
One of the gubernatorial candidates (I won’t tell you which one, but he looks like he has no neck) is advocating a progressive income tax as the solution to the state’s economic problems. That’s not possible under the current Illinois Constitution. So, some time after he’s anointed, he will propose that the General Assembly vote to put a proposition on a future ballot to amend the Constitution to allow a progressive income tax, like we have at the federal level. So far, no proposed tax rates have been provided to allow voters to calculate the merits of the proposition. And it doesn’t matter because any numbers that were published would have no binding effect on the General Assembly. The question before voters on the proposition would be: should the General Assembly be able to establish different tax rates for different income levels: yes or no. If the voters say yes, the resulting rates will be established by the General Assembly. The proposition is a blank check, trusting the General Assembly to fill in the numbers.
It doesn’t take a crystal ball or any expertise in using one to predict what will happen before and after the referendum. Before the referendum, voters will be told of the dire state of the Illinois economy: how our bond rating is just one level above junk (the lower the rating, the higher interest rate the state has to pay to borrow money); how we are already paying $1 billion annually in interest on late payment of the state’s bills; how we need to fund our unfunded pensions (the debt on which is increasing at the rate of ($17 million each day); how we need to “invest” in our crumbling infrastructure; and how we need to provide for health insurance for those who can’t afford it. Before the referendum, proposed rates will show that most voters will break even or even pay less with a progressive tax, so they will view the progressive tax as a good thing. The only people losing will be those who can be characterized as “the 1%” or “the rich” or those “not paying their fair share”. A majority of the electorate will be bribed with favorable proposed rates. But, although the referendum will be sold on the numbers, those numbers have as much permanency as the Cheshire Cat in Alice in Wonderland. They are the bait in bait-and-switch, a technique illegal for all but politicians.
Once the referendum is passed and the blank check signed, the rates will be determined by the General Assembly solely based on how much money is needed and how high the rates can go and still get a majority of votes in each house. Based on the history of progressive taxes elsewhere, once enacted, three things happen. First, the politicians go into an orgasmic frenzy anticipating all the things they can do with the blank check. Second, as a result of the frenzy, the tax rates get even higher. Third, as the even higher tax fails to produce enough revenue to cover the increased expenses, the thresholds for higher rates get adjusted downward. People who don’t consider themselves even remotely rich will be classified (and taxed) as if they were.
Could such a thing actually happen in Illinois? Consider: the people who are hyping the progressive tax and saying “Trust us, it’s a good thing” are the same people who said, “Trust us, the lottery will be a boon for education”; and who said “Trust us, this income tax increase is just temporary so the state can get caught up on its bills” and who told the teachers to trust them, that they’d make good on the state’s contribution to the Teachers Retirement System right after they declared a “pension holiday” and skipped a year of payments; and who said Illinois current budget is balanced.
Last year, Illinois lost enough people to populate St. Charles. It already loses people to nearly every other jurisdiction. Surveys consistently show high taxes as the primary motivation for those who are escaping or want to. But, “trust us”, a progressive tax will solve everything. Anybody wanna buy a bridge?
David Stanczak, a WJBC commentator since 1995, came to Bloomington in 1971. He served as the City of Bloomington’s first full-time legal counsel for over 18 years, before entering private practice. He is currently employed by the Snyder Companies and continues to reside in Bloomington with his family.
The opinions expressed within WJBC’s Voices are solely those of the Voices’ author, and are not necessarily those of WJBC or Cumulus Media, Inc.