DuPage House GOP: Graduated Tax Threat to IL Jobs, Families

Glen Ellyn, IL – State Representatives Sandy Pihos (R-Glen Ellyn), Dennis Reboletti (R-Elmhurst) and Darlene Senger (R-Naperville) joined members of the Illinois House Republican caucus today to announce their unanimous opposition to the graduated income tax proposal introduced by legislative Democrats. The plan, currently filed as HJRCA 33, would replace the state’s current flat tax with a graduated income tax system, with rates to be determined by the General Assembly.

“Regardless of how some are trying to portray it, a graduated income tax is all about increasing revenue by raising taxes,” said Pihos. “Illinois does not have a revenue problem; the state has a serious spending problem. Enacting a graduated income tax would have a direct impact on job creation and threaten economic development in our state and in our communities. Instead of raising taxes on hardworking families and businesses, we need to do more to manage our budget responsibly.”

Democrats argue that under their so-called “progressive” tax system, only the rich will pay more. However, the House Democrats’ plan includes seven tax brackets and a top rate of 9 percent, raising taxes on all income over $18,000. Under a graduated tax system, as taxpayers’ incomes rise with inflation, lower and middle income families are subjected to higher tax rates – commonly referred to as “bracket creep.”

High taxes are already causing employers and families to leave Illinois. According to the 2013 United Van Lines Migration Study, Illinois has the second-highest record of out-migration of any state. Nearly 278,000 Illinoisans left the state in 2012.

“Cutting spending has always taken a back seat to imposing new taxes in Illinois,” said Reboletti.  “A graduated income tax system would open the door for the Democrat majority in Springfield to raise taxes at their discretion, costing Illinois families and businesses who have already been struggling for years under Illinois’ sluggish economy. A recent study estimated a graduated tax system in Illinois could result in the loss of 88,000 jobs; this at a time when Illinois’ unemployment rate is the 4th highest in the nation. Now is not the time to put another tax burden on the middle class.”

The non-partisan Tax Foundation’s analysis of the proposed graduated income tax found that:

1. Illinois’ “State Business Tax Climate Index” score could fall to 44th from its current 31st ranking if the proposed progressive income tax passes;
2. Illinois already fell from 17th over the last few years with several rounds of tax increases, which did not succeed in alleviating Illinois’ financial situation or improve the economy; and
3. Higher and more progressive income taxes generally contribute to worsening economic performance.

“A graduated tax system would give a blank check to the Democrat majority in Springfield to set the rates,” said Senger. “Under their plan, as taxpayers’ incomes rise with inflation, lower and middle income families are forced into higher tax brackets, eating away at hard-earned family savings and adding financial to strain to families struggling to avoid foreclosure, pay for a child’s education, or care for an aging parent. Plain and simple, a graduated tax would threaten job creation, weaken our economy, and hurt Illinois families.”

Approval of a measure to amend the Illinois Constitution in favor of a graduated tax would require a three-fifths majority vote of the Illinois House and Senate. In the House, where Democrats currently hold 71 seats, a three-fifths majority equals a minimum of 71 votes. All 47 House Republicans joined House Republican Leader Jim Durkin (R-Western Springs) today in opposition to a graduated tax.