Martwick Reviving Graduated Income Tax
Sen. Robert Martwick (D-Chicago) says he will introduce legislation to put a graduated income tax constitutional amendment question on the 2024 ballot.
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Voters rejected a change in the constitution in 2020 to replace the state’s flat income tax with a graduated income tax by a result of some 53%-47%. 26 months later, the issue is about to come back.
Sen. Robert Martwick (D-Chicago) confirmed to me yesterday he will introduce legislation this spring to put the graduated tax question back on the ballot in 2024.
But, Martwick says, it won’t be the same plan voters rejected in 2020.
“This is going to be heavily focused on middle class tax relief,” Martwick said.
The northwest side lawmaker said he had research done a few years ago showing existing commitments and expected tax revenue would blow a $250 billion hole in the budget by 2045.
“Talking about the graduated income tax is a way of saying here is a different tax structure that can solve a lot of problems,” Martwick said. “It can lower taxes on the middle class, which is already overburdened. It can put us on a better trajectory. Does it solve all of our problems? That depends on how aggressive you want to be.”
Martwick hasn’t yet identified a structure or rates for the graduated tax under his plan, but said he would consider an idea to keep revenue neutral while shifting the burden from middle and working class individuals to those that make more money.
But even with wide supermajorities in both the House and Senate, passage of the idea isn’t a given. When asked about the idea last week, Governor JB Pritzker pushed it aside.
“That’s not something that I’m focused on this session,” Pritzker said. “We’ve done important work to balance the budget and closed corporate loopholes. We’ve enhanced revenue in the state. We also cut $700 million of expenditures.”
Pritzker says he wants to find a way to lower taxes.
“We need to focus on how we can address bringing down property taxes and making some permanent change to some of the tax rates in Illinois,” he said. “That takes running surpluses so that we can talk about how [to] apply that across the board to lower everybody’s taxes.”
Martwick says he understands the public is skeptical of Democratic promises to trust them to enact fair tax rates.
“They absolutely should not [trust us,]” Martwick said. “It’s about trusting the institutions that we have and what the people who follow me are going to do. People voted against it [in 2020] because they didn’t trust that government would solve the problem. We have to make sure the language isn’t open ended and gives the legislature the ability to spend money any way they want.”
Republicans, of course, oppose the plan.
Speaking for our Wednesday podcast and Livestream, Rep. Jeff Keicher (R-Sycamore) says government doesn’t need more money. He says Democrats shouldn’t ask for more money while they spend higher than expected revenues from the current tax rate.
“During the first year after it didn’t pass [in 2020], the state of Illinois took in the added revenue that [Pritzker’s graduated income] tax would have brought in, and we continued to spend,” Keicher said. We continue to have growth in our dollars and we continue to spend it We haven’t acted like adults. We haven’t acted like fiduciaries in the eyes of the Illinois taxpayer. So, how dare we ask for more of that. We cannot ask for more money than we already take.”
Martwick says its time for the state to do some long term planning.
“Our problem in Illinois is that we have exceptionally short term thinking,” he said. “If we balance the budget at the end of May, we all go home and play golf and go to baseball games and [think] the world is great. But we’re still on pace for a future catastrophe for the next generation.”
Martwick says he wants to dedicate some of the increased revenue to tackling major problems, like paying down pension debt and providing property tax relief.
“Let’s acknowledge what the future is going to bring if we don’t do something about it,” he said. “But let’s start a legitimate discussion on how we avert that catastrophe for the next generation.”