SPRINGFIELD, Ill. – Former Illinois Comptroller Leslie Munger says no one should trust state lawmakers with a graduated income tax.
Munger claims the campaign message that Gov. JB Pritzker’s plan would only tax the wealthiest higher isn’t true. Illinoisans have seen two tax increases over the last decade, but lawmakers failed to reduce pension liability and significant state debt. Munger feels state leaders may quickly change the proposed tax rates if Pritzker’s plan passes in order to fill open holes in the state’s pocket.
“The state needs so much more money than what this tax is supposed to bring in, and they know it,” Munger said. “They’re going to go for it as soon as they’re able to allow legislators to tax somebody else’s voters.”
She pointed out Illinoisans making $250,000 or more annually will pay more under Pritzker’s plan. Munger says many two-income families and small business owners fall into that category. She emphasized those residents provide for their families just like everyone else.
Looking for the rates
Munger said voters should also look closely at the language of the ballot question. She feels there’s no protection for taxpayers from any of the proposed rates. The ballot language says the amendment would grant authority to impose higher income tax rates on higher income levels. However, it doesn’t show the rates in question.
Currently, all residents pay a flat tax rate of 4.95%. Under the proposal, those making under $10,000 annually would see the rate drop to 4.75%. Individuals making $10,001 to $100,000 would pay a 4.90% rate. Finally, anyone bringing in $100,001 to $250,000 could see the current 4.95%.
The bracket jumps to 7.75% for individuals making $250,001 to $350,000. Residents making $350,001 to $750,000 would see a 7.85% rate. Those at the top, raking in more than $750,000 could have income taxed at 7.99%.
The governor and several groups supporting the “Fair Tax” proposal say Illinois won’t tax retirement income with the plan. Still, Munger says all 32 states with graduated rates tax retirement.
“Is Illinois really going to be the only state that doesn’t tax retirement income when we have the highest amount of debt of any state in the country per capita,” Munger asked.
Instead, she believes state lawmakers should focus on pension reform, consolidating units of government, and lowering property taxes. Munger says the graduated income tax would let the state off the hook and leave these issues unaddressed.
“If they really wanted to make the tax fairer to help lower-income families, it would have been very simple for them. They could have doubled the exemptions that lower-income families get,” Munger explained. “It takes the taxable income down significantly and reduces the absolute tax even more. But that’s not their goal, it’s not about fairness. This is about taxing Illinoisans at a much higher rate.”