Illinois is facing a constitutional amendment to change the way Illinois citizens are charged taxes. Historically, Illinois has had a flat tax system where everyone pays the same rate. This does not imply that everyone pays the same taxes. A 4% flat tax equates to $40,000 on earned income of $1 million, but only $2,000 on earned income of $50,000.
But Illinois is in bad fiscal condition right now, and our Governor thinks that a change to Illinois’s tax program is the ticket he needs to buy the state out of trouble. This is the second installment in a series of why a graduated tax rate is bad for Illinois.
I don’t know if you have been paying attention, but machine politicians in Illinois have figured out how to corrupt just about everything. For years, they promised higher pay to public unions in return for organizational support. When wages could not rise any higher, they sweetening pensions, and when those benefits got too sweet, they eliminated employee contributions.
Recently, with union pensions under public scrutiny the Machine managed to negotiate a COMED contract “on our behalf” which funneled millions of dollars into Democratic slush funds that then supported compliant candidates around the state. All of these are examples of buying votes with taxpayer dollars.
Until now, Illinois’ constitutionally mandated flat tax, has been the one thing that the politicians could not put their hands into and muck up. But this constitutional edit eliminating the flat tax requirement will change that. Sure, the Governor and other proponents promise that regular Joe’s taxes will go down this year (about $25 a year), and both Scrooge McDuck’s and the Monopoly Guy’s will go up, but next year, all bets are off. This constitutional amendment allows the Machine to change the gradient of the tax code anyway they want. There is now nothing preventing them from cutting sweetheart deals with special interest groups to reduce taxes at one level and sticking it to adversaries in return for support of machine candidates.
The pro-graduated tax group points out that most states have done away with flat taxes and it might work in a well-run state, but Illinois is the worst run state in the nation. The legislature in Illinois has a terrible track record of avoiding corruption when opportunities for buying votes with taxpayer dollars are available. Arming them with the ability to graduate taxes willy-nilly will ultimately increase corruption, further the State’s economic woes, and ultimately reduce tax revenue.
To loosely quote Grandmaster Melle-Mel, “Now I’m broke and it’s no joke.
Don’ t buy it!”