The same politicians who voted for the Fair Tax graduated tax initiative for the 2020 ballot last week are basically the same individuals who also voted for a 67% income tax increase in 2011 promising to keep the new rate of 5% until the mid-2020s when the tax rate would then go back to 3.25%. Fat chance.
Since the 67% tax increase in 2011, the state of Illinois' credit rating from Moody's has gone from A+ to the country's worst at Baa3. The residents of Illinois have the highest borrowing cost of any state in the nation for general obligation debt. Congratulations to all the politicians who voted for this thinking — it has been the cure-all to our state's woes.
Governor Pritzker's motto for the tax increase initiative has been "Let the people vote." Food for thought. If Senator Harmon wants to do some real heavy lifting when the next legislative session opens up, why doesn't he propose we change the constitutionally protected pensions that are completely blowing state and local finances?
As the Governor suggests, "Let the people vote." The tax increase if passed, might bring in a few billion dollars a year in extra revenue. However, the state's underfunded pension liability is over $130 billion. If you think the graduated tax rate, which will be close to or over 7% for the wealthiest in our state will stay at that rate, think again. Once the amendment is passed to a graduated rate, don't be so sure that rate won't increase again in the very near future. California has a state income tax of over 13%, which I'm sure makes Springfield drool.
No, the tax increase that will be coming is not the golden ticket that will cure our state's ills. We need an amendment that will allow the people of Illinois to put a stop on the incredibly dysfunctional pension system that has pummeled our credit rating into this Baa3 mess.
To quote the Governor, "Let the people vote." We have until next May to put this on the ballot.
Answer Book 2019
To view the full print edition of the Wednesday Journal 2019 Answer Book, please click here.
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