To the Editor:
It seems the opponents of Gov. Pritzker’s fair tax proposal center their opposition on the argument that a progressive tax will allow the legislature free reign on raising our income taxes. The legislature’s ability to change tax rates has been a fact since our current state constitution was first enacted.
The prevailing opposition argument isn’t that the proposed tax rates aren’t fair. The argument is that our elected representatives in Springfield will have a free reign on raising the income tax rate in the future; which is exactly what they’ve had the legal right to do since day one.
An historical review shows the following tax rates: 1990- 3%; 2011- 5%; 2015-3.75%; 2017- 4.95%. in the last 30 years, taxes have been raised and lowered; nothing new.
Under the current flat tax calculation, everyone pays the same rate; currently 4.95%. Flat tax calculations have an unequal economic impact on people with lower incomes.
For those struggling to make ends meet, 4.95% of disposable income has a huge impact on their ability to buy groceries, pay for housing, pay for health care, and to put gas in the car.
Let’s be honest, for higher income earners those choices aren’t on their radar screens. As an individual filer with earned income above $250,000, and a couple filing jointly with income above $500,000 a 4.95% rate is a bargain.
Keep in mind our federal income taxes are calculated on a progressive basis as are 32 other states. We need to remind ourselves that rates are bracketed and calculations are made on each bracket.
So for the 97% of us that file jointly and report adjusted gross income on line 11 of form IL-1040 below $500,000 our taxes will actually go down.
For the 3% state wide above the $250,000/500,000 amount, your taxes will go up to the maximum percentage from dollar one. I’m willing to bet that represents less than 2% of the citizens of McHenry County.
Calculating our taxes to a progressive rate is the fair thing to do for everyone.