Riddle Me This

The editors of the Chicago Tribune, who did not endorse Gov. J. B. Pritker’s election to governor presumably at least in part in opposition to his signature campaign promise—to introduce a graduated income tax to Illinois, are critical of the Illinois Senate’s passage of the amendment to the state constitution to enable the tax:

After giving the matter seven minutes (not hours) of thoughtful deliberation, Illinois Senate Democrats voted Wednesday to put on the November 2020 ballot a constitutional amendment to impose a system of graduated income tax rates on taxpayers. No Senate Republican voted yea.

The promise from Gov. J.B. Pritzker is that under his plan, voter approval of the amendment would mean tax breaks for 97 percent of Illinoisans. But who knows, because Senate Democrats changed Pritzker’s plan, and House members could too. Senators tweaked the tax rates — and they larded up their package with two more promises: If voters approve the graduated-rates amendment, their legislation would eliminate the state estate tax. It also would freeze school district property tax rates if the state meets its school funding obligations.

The stated intent is to increase state revenues to enable the state to pay the public pensions they’ve promised.

Now riddle me this. Will the proposed legislation decrease, increase, or have no effect on state revenues? I honestly have no idea. I do not believe that any serious study has been done of the matter. Certainly not during the seven minutes of debate the Senate gave it. IMO it is quite possible that the proposed legislation will actually reduce state revenues significantly in the name of increasing them.

If you decrease state income tax for 97% of taxpayers whether you increase or decrease revenues by increasing taxes on the other 3% depends on how deftly they avoid the increase or whether they remain in place to shoulder the tax. If the measure actually decreases revenues it could be a real disaster given the state’s present lousy credit rating.