Endorsement: The Fair Tax

October 10, 2020 Quad-City Times

Voters in Illinois are being asked to change their state constitution this year to allow a graduated income tax. Called the “Fair Tax” by Gov. J.B. Pritzker, the change would allow state government to set different rates for different income brackets.

The idea is to raise taxes on the wealthy, bringing in an estimated $3.6 billion.

The federal government and 32 states, including Iowa, have a progressive income tax system. Illinois, on the other hand, has a flat tax. Currently, it’s set at 4.95%

Proponents of the change say the present system is not fair and that people who make more money should pay more, and with the rates approved by the Legislature only 3% of the population will pay more. They say, without it, the state could be in for big budget cuts or an increase in the flat tax.

Critics, however, say this will just drive business and people away from a state already losing population, and that there is no guarantee Springfield won’t raise the rates later on more than just the rich. After all, the rates aren’t written into the amendment on the ballot; additionally, they say, the state just can’t be trusted to use the money wisely.

This was a tough call for us. The new revenue has the potential to help an ailing fiscal situation. It could help to lower property taxes, which is a huge disincentive for the Illinois Quad-Cities.

We are not opposed to a graduated income tax on principle, and we do see its potential. However, on balance, we believe voters in Illinois should vote against this proposal.

It’s pretty clear that the people of Illinois don’t have much trust in their state government. There’s good reason for that. Springfield hasn’t demonstrated any real fiscal restraint, and the pension crisis has loomed for years with no real solution on the horizon.

We give Pritzker credit for seeking ways to fix the state’s fiscal situation. But we, too, don’t believe Springfield has earned the trust of the public for such a move.

We understand some critics of the Fair Tax are just philosophically opposed to a graduated income tax system, or they’re just trying to protect their own assets.

We are not in those camps. As with all issues, we try to see this through the prism of our community.

In the Quad-Cities, it is no secret the Illinois side of the Mississippi River is hurting economically compared to Iowa. Historically, the flat income tax has always been an advantage that Illinois has had when it comes to attracting business and population.

Lately, Iowa has been in the midst of lowering its income taxes. If Illinois goes in the opposite direction, this could eliminate one of the few advantages the state has and just tip the balance further, pushing even more people out of the state.