Illinois Millionaires Tax Dies, Other Tax Plans Survive

Friday, 11 Apr 2014 02:53 PM

By Benjamin Yount,

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Illinois Democratic lawmakers have — albeit reluctantly — dropped a plan to tax people with seven-figure incomes, yet two other tax plans are very much alive.

Illinois taxpayers are looking at either a graduated income tax, which takes more taxes from people who earn more, and a proposal from Gov. Pat Quinn to make permanent the 2011 "temporary" income tax.

"It depends on where you sit whether you call (keeping the temporary tax) a tax increase," Carol Portman, executive director of the Taxpayers Federation of Illinois told Illinois Watchdog. "It certainly is an increase over what you were expecting to see."

Portman and her group haven't taken a position for or against Quinn's plan, nor has it weighed in on the progressive tax pitched by Democratic state Sen. Don Harmon.

"You can have a graduated rate that is not terrible policy. A lot of states have figured out how to do it," Portman said.

But Portman did say the apparently dead millionaires tax in Illinois was unusual, as it sets tax rates in the state constitution.

The millionaires tax died when Democratic lawmakers said they couldn’t support the plan.

"Our goal should be maximizing government efficiency and job growth, not pushing high earners, and the taxes they pay, out the door," state Rep. Jack Franks said in a statement.

"With this governor, there is no taxation without misrepresentation. He would like to portray this as an issue of fairness, but I am confident that no one who is currently out of work would consider our state's tax policies fair."

Franks and another Democrat, Rep. Scott Drury, joined every Republican lawmaker in publicly dismissing the millionaires’ tax, leaving the Democrats two votes shy of the 71 they need to move it forward.

The competing — and changing — tax plans are difficult to understand.

"It's so complicated that even the people who know it thoroughly, inside and out, are struggling to come up with a serious (and) honest answer," Portman said.

Lawmakers must have a budget in place by the end of May, but the legislature may not vote on a tax increase until after the election in November, or even as late as January 2015.

"Illinois is at an economic crossroads, and our choices going forward are clear," Franks' statement said. "With income tax rates set to expire at the end of this year, Illinois' government must focus on living within our means, not maintaining a business-as-usual approach and taking more from taxpayers already overburdened by our state’s tax-and-spend policies to pay for it."

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