For about a year, Democrats have been calling for a “Fair Tax” that would raise more money for our dead-broke state and schools by soaking the rich.
Well, I may be the only one who phrases it quite that indelicately.
But despite nearly universal Democratic support, it looks as though the fair tax movement is dead.
That is—there will be no vote in this legislative session to get the measure on the ballot in November’s election, as many backers had hoped. That means it couldn’t be put on the ballot until, at the earliest, 2020, the next statewide election.
Instead, we’ll make do with hearings on a nonbinding, largely symbolic resolution that castigates our current system as unfair without actually doing anything about it.
Except for holding a hearing. Hey, no one said democracy was easy.
At the moment, we have a flat tax in which everyone pays the same tax rate regardless of income.
So the richest of the rich—like Governor Rauner and Democratic nominee J.B. Pritzker and, oh, hip-hop superstar and Donald Trump backer Kanye West—pay the same 4.95 percent of their incomes as, say, a janitor working for the Chicago Public Schools. (I figure Kanye’s fair game, what with him getting so political and everything these days.)
The only fair way to adequately fund government is to raise the rates on the Rauners and Pritzkers and Kanyes, while lowering the rate on the janitors. Hence the name: fair tax.
That’s what progressive Democrats have been proposing for the better part of a year.
To create a fair tax, we have to amend the state constitution. That necessitates a statewide referendum.
To get the referendum on the ballot, you need to get approval from a three-fifths majority in both the house and the senate. Fair tax advocates were hoping to have the legislators vote on the matter before May 8, so it would come before voters in November’s gubernatorial election.
The Democrats have the votes in the senate. But in the house it’s another story.
There, they need 71 votes to pass the measure. But there are only 67 Democrats. Thus, the fair tax needs four Republicans to vote yes. And right now every single Republican politician in the state has vowed to fight like hell to keep rich people happy and keep the tax rate flat.
In fact, the Republicans introduced HR 975, their own nonbinding referendum, resolving to stand “united in opposition to any measure that would allow the creation of a graduated income tax” in Illinois.
As you can see, not a lot of room for compromise.
So house speaker Michael Madigan faces what he calls “a strategic decision.” He could call the measure to a vote in the hopes that he could round up four Republicans to support it. Yeah, right.
He could call it for a vote knowing it will lose anyway, in the hopes of embarrassing Republican legislators who vote no.
However, I suspect this bunch is beyond embarrassment. Moreover, that would probably backfire by putting Democratic legislators from downstate swing districts in a bad position. Vote against the fair tax, and they’d piss off their progressive base. Vote for it, and they’d alienate the conservative swing voters they need to win reelection.
And just in case those swing voters aren’t paying attention, you can be sure Governor Rauner’s campaign machine will pay for mailings and commercials to remind them all about it.
To protect his members, Madigan has decided not to introduce the referendum proposal.
Instead he sponsored House Bill resolution 1025 which, among other things, says opposition to a progressive income tax “stems from a desire to protect the status quo for the wealthiest members of society.”
Hard to argue with that.
The house’s Revenue Committee will hold a hearing on the resolution at 2:30 PM Wednesday, May 2, at the Michael A. Bilandic Building, 160 N. LaSalle.
The biggest challenge for Democrats in crafting a fair tax proposal is where to draw the income line on who gets socked with a higher tax rate, and what that rate will be.
Obviously, this is going to take some legislative finessing. It’ll probably have to be linked to a property tax freeze. Clearly more time is needed—at least to get past the upcoming election in the fall so it doesn’t turn into a campaign issue in those swing districts.
Of course, there’s always an upcoming election, meaning whenever it comes up it could have repercussions.
The bottom line is that the Rauners, Pritzkers and Kanyes of the world will pay the same rate as the CPS janitors—for at least another two years.