Analysis: 'Scare tax' is right's new boogeyman
Anti-taxers keep imagining nightmare scenarios in attempt to defeat Pritzker ‘fair tax’
The only certainties are death, taxes, and the rich trying to find ways to pay less taxes. (Shutterstock)
By Ted Cox and Ameya Pawar
The only thing worse than snow on Halloween is politicos using Halloween to scare voters.
Halloween is over now, and the early snow that hit much of northern Illinois figures to be gone soon — for a while, anyway. But the scare tactics against the “fair tax” proposed by Gov. Pritzker are only just getting started, and they figure to persist for the next year.
Exactly one year from Sunday voters will go to the polls on Election Day 2020 to elect a new president and, in Illinois, vote to amend the state constitution to allow a graduated income tax. Nov. 3 will fall on a Tuesday after an extra day is added to the calendar for Leap Year on Feb. 29.
The Center Square Illinois gave everyone a hint at what’s to come over the year in between on Thursday when it called the fair tax a “scare tax” and basically warned voters to beware the monster under their beds.
We’re not going to devote too much space to debunking scary tales about monsters that don’t even exist except in the minds of folks actually more intent on protecting the money under their mattresses, but we thought a few points needed to be made.
The Center Square op-ed column charged that Democrats were trying to “muscle through” the amendment to the state constitution allowing a graduated income tax “with all the subtlety of a shakedown.” That’s an intriguing take on democracy when voters are being asked, quite plainly and directly, to endorse a change in the constitution by voting in favor with a requisite 60 percent supermajority.
That seems pretty clear to us. If you want a progressive state income tax, just like the federal government has, you have to vote overwhelmingly in favor of it. If not, the tax increases everyone agrees are necessary will have to be shared by everyone and not just the 3 percent of top earners making more than $250,000 who are targeted in the top tax brackets already set by Pritzker and the General Assembly — another critical bit of transparency when it comes to dealing openly with voters.
The Pritzker administration even created the Fair Tax Calculator, so voters can plug in their basic information and see whether they’d pay more or less, and if so how much more or less.
Yet the rich would like to keep it the way it is now, passing the tax burden to those who have a harder time hefting it, even though it’s clearly in the interest of 97 percent of state residents to vote for change.
Those who think all taxes are bad may be venal, but they’re not stupid. They can do the math. And, in order to defeat a graduated income tax, they’re going to have to peel off 38 percent of voters and get them to vote against their own self-interest in order to get the final majority below 60 percent. And how do they do that?
They wave their arms and holler and shout and point to the monster under the bed.
The column went on to suggest that the already onerous task of changing the state constitution is just the first part of an elaborate “two-step strategy” in which taxes are going to be raised on everyone anyway.
We’re not going to go into the hooey Center Square tries to pass off as evidence of that, which basically suggests that the General Assembly is passing spending increases this year so that it will be easy to cut programs they don’t really want next year in order to bring on a crisis that will call for another tax increase. But it sure does seem as if they’re creating some sort of scenario in which Democrats are damned for cutting spending and damned if they don’t.
Instead, we’re going to repeat what we just said. The progressive tax brackets have already been set in a way that will allow 97 percent of state residents to pay the same or less in income taxes, while the top 3 percent pay more. Any additional tax increases will have to be passed by members of the General Assembly, who will have to explain that to voters.
But there’s no such thing right now, no such proposal, not even the hint of any additional tax increase. It’s the monster under the bed.
Two can play that scare-tactic game, however. So we’re going back to go back to the tried-and-true political tactic of waving the bloody shirt — the shirt covered in red ink spilled by former Gov. Rauner.
Remember what this guy did to the state? That’s genuinely scary. (One Illinois/Ted Cox)
We’re not warning about some fantasy calamity to come; we’re reminding people of what already took place the last time they listened to a Republican administration and its voodoo economics. The trick they passed off on voters was to cut taxes for the very rich, to destroy the social-safety net, to cut funding to education, social services, child care, veteran services — all things a vast majority of Illinois citizens want and in many cases need.
They brought on a crisis in an attempt to force additional spending cuts, but what they did instead was sew chaos across state government. Services for child care and home health care went unpaid. State universities saw their funding slashed or cut off entirely.
Anti-taxers warn that a tax on the rich would prompt the rich to leave the state. That’s a scary prediction for the future, but it doesn’t jibe with the past. The last time the state raised taxes, it wasn’t the rich who left. Quite the opposite, they stayed and prospered. It was low-wage workers suffering the most under the state’s regressive tax system who were forced to flee.
And you know who else left the state? College freshmen who couldn’t deal with the rising costs of an increasingly chaotic state university system — many of them, studies confirmed, never to return except to visit. That’s not some nightmare scenario; it really happened.
Now, for the moment, the state has the money to pay its bills. The $15 billion backlog in unpaid bills Rauner left the state with has been trimmed by Comptroller Susana Mendoza to just over $6 billion — not the best balance for state finances, but a significant improvement. Schools and colleges are once again funded adequately, with freshman enrollment on the rise at many of the top state universities amid signs that others are, yes, halting the bleeding.
As for the rich leaving en masse, most neighboring states already have a progressive income tax, and Iowa and Minnesota both have a higher top tax rate than what’s already been established for the Illinois fair tax. The difference in Wisconsin’s top tax rate of 7.65 percent isn’t enough to pay the moving costs.
Allow us to suggest that Illinoisans already know they pay less in income taxes than people in neighboring states — which is why they pay such high property taxes to make up the difference in funding education and other critical local government services. As Gov. Pritzker pointed out when he first proposed the fair tax, the only budget cuts to be had are in so-called discretionary spending on education, law enforcement, and social services, which would have to be slashed 15 percent across the board. Or, if a flat tax and current spending were maintained, the tax rate would have to rise for all Illinois filers from 4.95 to 5.95 percent.
Some could afford that better than, oh, say, 97 percent of the others.
Illinoisans are finally recognizing that if they want the things they want and require — including the much-needed $45 billion Rebuild Illinois capital plan — they have to find a way to pay for it. That’s what’s truly frightening to those who think all taxes are evil.