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.
Answer Book 2018
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