I recently had the opportunity to discuss several hot-topic issues with State Representative Jeff Keicher of Illinois’ 70th District. We covered the makeup of the State government after the 2018 election and how well they are currently working together, the proposed Graduated State Income Tax Amendment, and the Legalization of Marijuana.
Today’s article will be a detailed explanation of why Rep. Keicher opposes the proposed Graduated State Income Tax Amendment, in his own words. We will post a couple more articles in the near future summarizing his thoughts on the other topics we discussed.
The Facts about the Proposed Graduated State Income Tax Amendment
The graduated income tax amendment is a proposal to change the Constitution of the State of Illinois. What the amendment would do is alter one sentence in the Constitution that would allow for income to be taxed at various rates and tiers. As it currently stands, the Illinois State Constitution says, “All income taxed in the State of Illinois will be at a single rate from any income derived.”
The amendment passed in the State Senate on May 1, 2019 and is currently being debated in the House. It needs to pass in the House by a 3/5 majority in order to be put on the ballot for the next general election in November of 2020. The voters would then be able to decide whether they want to allow multiple rates or not, without any reference to what the actual rates may end up becoming.
“They are struggling to get the votes in the House, so there is a bipartisan concern for changing the Constitution to allow the graduated income tax hike,” said Keicher. “There is no way I would vote for this. I think it would be a horrible thing to do to the citizens of the State of Illinois.”
Why Rep. Keicher opposes the proposed Amendment:
“Here’s the challenge that we’re going to have. The Governor’s tax proposal, and he will raise the rates, suggests that we will raise $3.4 Billion. We are currently deficit spending $3.2 Billion. If that deficit spending happens again for the next two fiscal years, before this has a chance to pass, we will have accumulated potentially another $9.5 Billion of backlogged bills, on top of the $8 Billion that we have today. So there is no way that the legislature will just rest on the proposed rates that the governor has published. We’ll have significantly higher rates, and those tiers will drop down and impact good, working-class, middle-class households in the 70th District.”
“We’ve had two tax increases in the last ten years. We had one in 2011 for a temporary reason. We were going to solve our spending problems, pay down the pensions, and fix school funding. We did none of that. We did it again in 2017 and we made the same promises…[and] none of that happened.
“You cannot trust Illinois legislators to make these promises when we don’t see results. There is no proposed spending caps, alterations, or cuts. Nothing of that sort is being talked about. As a matter of fact, the week before we went on spring break, we debated on the floor of the House an additional billion-dollar-a-year spending measure. There is no tie to reality.
“We haven’t seen any willingness to engage in a discussion of looking at where we could be more efficient, where we could potentially see cuts, where we could potentially pull back. There is none of that.
“What I believe is happening is the speaker and the governor are trying to create a more dire circumstance before we hit the fall of 2020, so that during that election [increasing the tax rates] is the only choice the voters are left with. They are going to continue to squeeze until they get what they want.”
On the Fairness of a graduated income tax:
“Right now, everybody pays the same [rate]. So if you’re making $50,000 or $500,000 you are paying the same percent of your income. That is of course fair…You pay the same sales tax at the cash register, not matter whether you buy $50 worth of groceries or $1000 worth of groceries. You pay the same rate on car sales. You pay the same rate on property taxes.
“My fear is not protecting millionaires. My fear is this is a sham that will impact the middle class in just a matter of a few years. Is it fair to allow that, without forcing Illinois to change its spending habits? We can’t give an additional line of credit to a chronic shopaholic.”
What Keicher proposes:
“The first thing, in my opinion, that we need to do is [institute] a pay-as-you-go system, where we can only spend what our revenue is. And if we choose other spending priorities, that is fine, but you must identify the revenue source for where that’s coming from. So PAYGO would we absolutely critical.”
He suggested that the State needs to trim 10% from its current budget.
“I am not suggesting or advocating that we cut health, or prescriptions, or state troopers…What I am suggesting is that we need to look at everything. And if we’re not willing to look at efficiency, then we need our revenues to meet our expenses for the good of the people.”
The Bottom Line:
“Right now, we are one of the highest property tax states in the country. We are one of the highest sales tax states in the country. And this income tax hike, when you look at the amount of money they will generate, will make us one of the highest income tax states in this country. And they have done nothing in these proposals to suggest that any of the added revenue will alleviate property taxation.”
Rep. Keicher points out the “hypocrisy” of the State government wanting to change the Constitution to raise income tax rates, when they have refused to put a Fair Maps Amendment on the ballot to stop gerrymandering, despite being petitioned twice in the last ten years by the people of Illinois. The last petition was signed by 600,000 Illinois residents.
“We are saying, ‘No,’ to those people, yet saying, ‘Yes,’ to a tax increase. If we are going to open up the Constitution, let’s look at all the problem areas.
“At the end of the day, if in Illinois we have gone through a diligent process of curbing spending and insider deals and corruption, and *then* we’re out of money, I think it’s a different playing field. But right now, the folks in Illinois in the legislature have not earned the right to steal more money out of mom and dads’s paycheck in every community in the 70th District.”