Here in Illinois the Democratic nominee for governor, J. B. Pritzker, is undoubtedly one of the richest people ever to run for elective office in the United States. He’s not in Michael Bloomberg territory but he’s rich enough to make Donald Trump or Bruce Rauner, Illinois’s sitting governor, look like pikers.
He’s running on a platform of creating a graduated income tax in Illinois to “make the rich pay their fair share” (whatever that might be). Frankly, that puzzles me.
The Illinois constitution mandates a flat income tax or, more precisely, it prohibits progressive income taxes. Here’s Article IX, Section 3 of the state’s constitution:
SECTION 3. LIMITATIONS ON INCOME TAXATION
(a) A tax on or measured by income shall be at a non-graduated rate. At any one time there may be no more than one such tax imposed by the State for State purposes on individuals and one such tax so imposed on corporations. In any such tax imposed upon corporations the rate shall not exceed the rate imposed on individuals by more than a ratio of 8 to 5.
or, in other words, imposing a graduated income tax requires amending the state’s constitution which requires more than a simple majority. It it were easy we’d’ve done it a long time ago..
Illinois’s present starts with federal adjusted gross income, reduces that with several deductions, and applies a flat rate of 4.95% to that.
Now here’s what puzzles me. There are all sorts of strategies that would ensure that the rich “pay their fair share” and still pass constitutional muster. Here are to. Rather than taxing adjusted gross income we could tax based on a flat percentage of total federal income tax. Or, even better, we could tax based on a flat percentage of total federal deductions. There are any number of others.
Why wouldn’t that accomplish the purported objective?
Here’s another question. In 2016 Mr. Pritzker’s adjusted gross income was around $15 million on which he paid about $4.1 million in federal taxes. My back-of-the-envelope calculation tells me that means he took more than $4 million in deductions.
There is no law that requires anyone to tax deductions. Doesn’t Mr. Pritzker’s own behavior suggest that whatever the marginal tax rate he and those with incomes like his will take whatever deductions they can to reduce their tax liabilities? In other words the entire flat rate/graduated income tax is a red herring.
I see the unions like him, which only means he knows what they want to hear. He’ll never help them. I’ve always wondered why men so rich they can buy peoples souls want into politics. Is it to assuage their guilt? Pretending to do good? Or is it just the need for the spotlight, rubbing shoulders with the famous? Never know because they will never speak truth.
They want power.
Damn. Shoulda known that, famous Kissinger quote.
“Now here’s what puzzles me.â€
Oh, please. It doesn’t puzzle you in the least.
“Why wouldn’t that accomplish the purported objective?â€
Because the entire thing is a ruse. “Fair†is subjective and therefore undefinable, but for those advocating for tax revenue that definition is simply and perpetually “more.â€
“Doesn’t Mr. Pritzker’s own behavior suggest that whatever the marginal tax rate he and those with incomes like his will take whatever deductions they can to reduce their tax liabilities?â€
Of course, just like everyone attempts to reduce their taxes.