With clock ticking, Harmon pushes progressive income tax

Vote must come this week to make Nov. referendum possible

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By Bob Skolnik

Contributing Reporter

This week State Senator Don Harmon (D-Oak Park) will try to put on the November ballot a constitutional amendment which would allow Illinois to have a graduated income tax.

To get on the November ballot the proposed constitutional amendment must pass each house of the Illinois General Assembly with at least a three-fifths majority this week. 

"It has to pass this week," Harmon said. "We are up against the deadline, but we are deadline driven people." 

Harmon, the chief Senate sponsor of the so called "Fair Tax" amendment, intends to call for a vote Tuesday in the state Senate on the proposed amendment. If the amendment gets the necessary votes in the Senate the House would take up the issue on Wednesday and vote on Thursday Harmon said.

Prospects look promising for the amendment in the Senate which has 40 Democrats, four more than the 36 needed to get the three-fifths vote. 

But prospects are more iffy in the state House of Representatives where the Democrats have exactly a three-fifths majority. One Democrat, Rep. Jack Franks (D-Woodstock), is already on record saying he will not vote in favor of the amendment and a number of other Democrats have not taken a position.


Steve Brown, the spokesman for powerful House Speaker Michael Madigan, gave a cautious assessment of the amendment's prospects in the House. 

"I don't do predictions but a version of that proposal was in the House Revenue Committee several weeks ago and didn't get out of it," Brown told Wednesday Journal last week. 

Harmon believes that he will get enough Republican votes in the House to put the proposed amendment on the ballot. 

"There are Republicans in the House who will vote for this," Harmon said. "This is good for their district. It's a tax cut for 95 to 96 percent of their constituents and it offers a way to preserve the services that their constituents demand."

Harmon said that if it appears that the proposed amendment would not pass the House he would not call it for a vote in the Senate.

If the proposed amendment does get through the state legislature it will become part of the Illinois Constitution if it is supported by a simple majority of all voters who vote in the November general election or by 60 percent of those who actually vote on the amendment.

The current Illinois Constitution requires that any Illinois income tax be a flat rate tax, the same rate for all individuals. Harmon's proposed amendment would allow the state to tax different levels of income at different rates.

"It's a tool that almost every other state that imposes an income tax has, it's a tool the federal government has," Harmon said. "It allows us to be more strategic and nimble in tax policy, but most importantly it allows us to lower the tax burden on middle class families and still provide the critical services that Illinoisans expect from state government: education, health care, human services, public safety. Progressivity in the income tax code is critical in large part because it offsets the incredibly regressive nature of the sales tax and the property tax."

Out of the 43 states that impose an income tax only eight have a flat tax. 

Harmon is also introducing a companion piece of legislation that would set three income rates if the proposed constitutional amendment is approved by voters in November. Harmon is proposing a 2.9 percent tax rate on the first $12,500 of an individual's taxable income, a 4.9 percent rate on the next $167,500 of taxable income and a 6.9 percent rate on any taxable income more than $180,000.

Of course if the amendment is ultimately adopted the legislature would be free to set whatever rates it chose.

Harmon said that a family of four earning less than $211,000 would pay less in state income tax under his plan than they do under the current 5 percent flat rate. But the breakeven point would be much lower if the flat rate drops to 3.75 percent as it is scheduled to do next year if the legislature takes no action. 

Harmon said that his proposed rate structure would yield $23 million less in revenue than the current flat 5 percent rate. 

"This is not a big tax increase," Harmon said. "We're not raising billions of dollars more than we did last year. We're simply trying to replace the revenue that we will lose when the current temporary income tax (rate) expires." 

Backing the "Fair Tax" is a coalition including the League of Women Voters, progressive groups and labor unions.

Reader Comments

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Posted: April 29th, 2014 4:07 PM

@Bob-The state has collected an additional $18 BILLION over the past few years due to the tax hike. At the time, the state had unpaid bills totaling $8.5B. That amount is now $9B. They could have easily paid down that debt but chose not to. IL doesn't have a revenue problem, it has a spending problem. To think you'd advocate the state mishandling more of taxpayers' incomes is unfortunate.

Bob Simpson from Oak Park, Illinois  

Posted: April 29th, 2014 3:09 PM

A small step in the right direction. Our skyrocketing wealth inequality is destroying the economy and peoples' lives along with it. We need more public investment in economic development and good paying jobs as private enterprise is doing so poorly in this regard.


Posted: April 29th, 2014 8:35 AM

The problem is suckers in places like Oak Park who elect populist quacks like Harmon. This has no chance of passing and is designed solely to fire up the Dem base.


Posted: April 28th, 2014 9:42 PM

Harmon and those like him won't stop until they drive every working person out of the state. Illinois is not a business friendly state to begin with, and this will just make it worse.


Posted: April 28th, 2014 9:38 PM

It's all semantics with Harmon. "Replace the revenue we will lose" instead of saying "bonus revenue we had gained" that the state collected for the past 2 years. Tax cuts of .1% on the EXPIRING rates. So much double-talk from the man. The state will not implode with cuts. I'm willing to accept less services while the state gets back in better financial standing. A realistic pension plan could solve the problem, but he's not interested in that. Cut away...I call your bluff!

Oak Park CPA from OP  

Posted: April 28th, 2014 5:00 PM

To amplify my earlier comments, I do not see what is so terribly wrong with the current flat tax system in Illinois. Everyone pays the same rate. If you earn a little, you pay a little. If you earn a lot, you pay a lot. Keep in mind that the system does have another issue in that seniors pay absolutely no tax on retirement income. No one wants to touch that one.

Brian from Oak Park  

Posted: April 28th, 2014 3:54 PM

Oak Park CPA - no, not really. I think he just doesn't care - my opinion. The problem with all the different tax jurisdictions is they are single purpose entities. There's no coordination. Just like here at the local level, the Park District debt has soared over 350% over 10 years. Meanwhile, each jurisdiction has increased by single, or more often by double-digits annually. Quinn campaigned on eliminating tax jurisdictions (Illinois having the most per capita in the US). Went no where.

Bill from Oak Park  

Posted: April 28th, 2014 3:51 PM

Bob Skolnik. The math doesn't add up here. 2.9% on first $12,500. 4.9% on next $167,000, 6.9% on $180,00 and above. $12,500 plus $167,000 is $179,500. Should it have been next $167,500 or is Harmon et. al., in a such a hurry that they put out the wrong numbers?

Bridgett from Oak Park  

Posted: April 28th, 2014 3:34 PM

@Ned, yes, the problem is also current journalism. Here is a 765-word story, and the 3.75% rate isn't mentioned until after word number 650.

Busy spring  

Posted: April 28th, 2014 3:32 PM

Sincere best of luck to Sen. Harmon on passing this. It's a busy spring session with the minimum wage increase, making the temporary tax permanent, and more. Thank you for sponsoring this.

Oak Park CPA from Oak Park  

Posted: April 28th, 2014 3:25 PM

Having just gone through the most recent tax season, one in which many Oak Parkers got hit with higher tax bills at the Federal level, I am wondering if Harmon understands that many OP and RF folks (ie. his constituents) will be head hard by the progressive tax.

Brian from Oak Park  

Posted: April 28th, 2014 3:19 PM

Deli - actually no they are not. All Democrats in the state want this. Just like the 67% tax increase in 2011, this deal will be done in the lame duck session when our "Leaders" can be most under cover of voter fatigue - after the election and before a new governor is sworn in. Plus, unions love this and will rally because it allows politicians to increase or adjust rates in each proposed bracket in the future giving more money for future contracts or need to voter approval.

Bill from Oak Park  

Posted: April 28th, 2014 3:17 PM

I wouldn't oppose a temporary increase to fix things, but the rates aren't tied to any promise to balance the budget, cut spending or fix the pension mess. Give the Dems the money first and they might fix the fiscal state of the state. Or maybe not. The temporary 5% raise did nothing to improve Illinois. The 4.9% rate was chosen to allow a 0.1% decrease from the temporary rate so the drones will go along. One has to hope no Republicans go along and Rauner is elected in November.

Ned Ryerson from River Forest  

Posted: April 28th, 2014 3:09 PM

3.75% or 4.9%; the optics are only clear if you read the comments or the Tribune Editorial from this past Sunday. It is sad that the state said they needed the extra $$$ to pay their bills; then did not do it, and now are raising taxes again. Its like they have not looked at any neighboring states at all.

Bridgett from Oak Park  

Posted: April 28th, 2014 2:24 PM

"It's a tax cut for 95 to 96 percent of their constituents..." How is 4.9% a tax cut, when the rate is supposed to go down to 3.75% on January 1st? To state the obvious: 4.9% is higher than 3.75%. More than 30% higher. Not 1.15% higher. Just like going from 3% to 5% for the temp tax hike was a 67% increase, not a 2% increase as was repeated, and defended repeatedly. I am so irritated with these non-factual statements (involving basic math!) with the intent on misleading people.


Posted: April 28th, 2014 2:16 PM

Isn't Harmon screwing with Quinn here? This is the kind of thing that will motivate Republicans to vote against it more than it will motivate Democrats to vote for it (the core value of the GOP is cutting taxes), so won't that mean more Bruce Rauner voters come to the polls?

Brian from Oak Park  

Posted: April 28th, 2014 1:59 PM

What Mr. Harmon doesn't acknowledge is except for those states with no income tax. Plus for most people, income taxes would increase above the rate that Democrats have already written into state law for 2015. And the "temporary" tax was to pay down past due bills. Instead they are still at over $7.1B, and spending has increased each year. What should have paid all past due bills, did not. Who can trust these guys? The record is reward cronies, at the cost of jobs, credit-rating, etc. Phoey

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