Fair Tax is a step in the right direction

Opinion: Columns

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Jim Schwartz

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In this election, Illinoisans are being asked to make at least two consequential decisions. One is to choose between Joe Biden and Donald Trump for President. The other is to decide whether Illinois, like 32 other states, should implement a graduated income tax — the Fair Tax. Right now, Illinois taxes all of our incomes at the same rate — the billionaire at the same rate as the family struggling to make ends meet. And at the same time, the state is struggling to meet its financial obligations. It is fair that we would turn to those who can most afford to pay — the wealthy. I have not heard anyone dispute this reasoning. 

Instead, the objections break down as follows:

"This is a license for Illinois to increase taxes further in the future." In fact, the legislature can address our debts by increasing taxes now. It's just that all Illinoisans would have to pay the increase instead of asking those to pay who can most afford it.

"We should not change the tax structure without reforming pensions, which are taking up a large portion of the state's budget." Some changes to pensions are needed. But there is no reason to tie the challenge of pension reform to the passage of a graduated tax. This would just complicate the passage of both and make both less likely.

"We cannot trust Illinois politicians with increased funds." Illinois politicians, like those in other states, have not always been responsible with the tax dollars we have sent them. The solution is not to deny ourselves the funds we need to address our debts. The solution is to vote out politicians when they have been irresponsible.

The usually unstated objection is that wealthy Illinoisans don't want to pay their fair share of taxes. And of course that is left unstated because no one wants to be seen as greedy. But I can't think of a better word for it.

The Fair Tax will not solve all of Illinois' financial problems. But we do need it to increase our revenue and begin to correct the errors of the past and set us on a better course where we can fund the social services that our residents need. 

I hope that we all vote Yes on the proposed amendment to the Illinois Constitution, which would allow us to implement fair and graduated income taxes in Illinois.

Jim Schwartz is an Oak Park resident, an educator, and a blogger at Entwining.org.

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Reader Comments

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William Dwyer Jr.  

Posted: October 23rd, 2020 9:03 PM

Well, T. Mac... for the record... Burke is a Chicago Alderman, not a state official, so he has no voice in this in any event. And he's under indictment, so no one's taking any meetings with him anyways. Perhaps you need to read a newspaper once in a while.

Tom MacMillan from Oak Park  

Posted: October 23rd, 2020 6:35 PM

Madigan and Burke also can't wait to also handle all that new Fair Tax cash. Put that in the record, little record keeper.

William Dwyer Jr.  

Posted: October 23rd, 2020 4:32 PM

For the record, Madigan and Burke handle large commercial properties worth millions of dollars. Not Oak Park condo units.

Tom MacMillan from Oak Park  

Posted: October 23rd, 2020 4:15 PM

The previous conversation on Mr Schwartz's property tax avoidance must be considered in the context of him, tearfully talking about how we need every extra penny, while he does everything he can to not pay one more penny himself. Too many people like taxes only when they know they personally won't have to pay them. Fair Tax seems to be defined as, not paid by me, these days. And to be clear, everyone should appeal their property taxes, it keeps tax appeal firms owned by Mike Madigan and Ed Burke busy after all. But Jim should appeal his and talk less about everyone else paying more.

Dave Slade from Oak Park  

Posted: October 23rd, 2020 11:18 AM

Nine of those states that don't tax retirement plan income simply have no state income taxes at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. The remaining three ?" Illinois, Mississippi and Pennsylvania ?" don't tax distributions from 401(k) plans, IRAs or pensions. Alabama and Hawaii don't tax pensions, but do tax distributions from 401(k) plans and IRAs.

Dave Slade from Oak Park  

Posted: October 23rd, 2020 11:16 AM

The tax table below will show in detail the New Jersey state income tax rates by income tax bracket(s). There are 6 income tax brackets for New Jersey. Tax brackets for individuals are provided below: For earnings between $1 and $20,000, the tax rate on every dollar of income earned is 1.4%. For earnings between $20,001 and $35,000, the tax rate on every dollar of income earned is 1.75%. For earnings between $35,001 and $40,000, the tax rate on every dollar of income earned is 3.5%. For earnings between $40,001 and $75,000, the tax rate on every dollar of income earned is 5.525%. For earnings between $75,001 and $500,000, the tax rate on every dollar of income earned is 6.37%. For earnings of $500,001 and over, the tax rate on every dollar of income earned is 8.97%.

Dave Slade from Oak Park  

Posted: October 23rd, 2020 11:13 AM

Iowans are taxed at 0.33% on the first $1,638 of their income; 0.67% up to $3,276; 2.25% up to $6,552; 4.14% up to $14,742; 5.63% up to $24,570; 5.96% up to $32,760; 6.25% up to $49,140; 7.44% up to $73,710; and 8.53% for income over $73,710.

Nick A Binotti  

Posted: October 23rd, 2020 10:41 AM

What if I told you we could have a state that ranks near the top nationally in education, health care, and infrastructure yet accomplishes this with a lower overall tax burden across all income levels. Not possible, right? Well, it's called Massachusetts. And it has a FLAT state income tax.

Ramona Lopez  

Posted: October 23rd, 2020 10:25 AM

@ Jim. You speak in such vague terms like "our state doesn't collect enough tax money to provide the kind of services that our people need". Specifics matter Jim. So precisely how much is needed and then reverse engineer that number and let us know precisely what tax rate would get to that number. You have all the data readily available. Nobody is suggesting that people should keep all the money they earn. That statement by you is an egregious mischaracterization. Since "fair" is very subjective. What is "fair' to me may not be "fair" to you. I find it amazingly ignorant to leave the interpretation of "fair" up to our elected officials in Springfield.

Tom Clarkson  

Posted: October 23rd, 2020 12:04 AM

Jim - 'the fact that our state doesn't collect enough tax money to provide the kind of services that our people need.' Are you aware that Illinois already ranks 9th in personal tax revenue collected per capita - perhaps it's not the collection part that's the problem and perhaps you should define the 'services that we need' better. Are you talking about bloated pension obligations for past services because that's not a very compelling argument for value added services for future payers. As we sit at the top of the list in terms of net migrations from a state, how do you think a more onerous tax burden will work out for this trend and our state's ability to attract individuals and business that pay taxes? I think might find the general population trend dwarfs the added income from the very high earners. I just think that taking a sound bite approach to liking the current proposal without truly understanding the numbers and economy is reckless..

Jim Schwartz  

Posted: October 22nd, 2020 2:58 PM

Nick & Ben -- I think our differences on this issue come from our differences in how we approach the issue. You both seem to approach it from the standpoint that a government levying taxes -- especially the Illinois government -- is an unbridled negative, that people who have earned money should be able to keep it all. I'm approaching the issue from the fact that our state doesn't collect enough tax money to provide the kind of services that our people need. Will the Fair Tax Amendment bring us all the revenue we need? No, but we need to take this step to set up the system to be fair. No, our state's situation is not completely analogous to any other state's situation. That doesn't change the fact that graduated income tax is a more fair system than allowing wealthy people to pay the same rates as poor and middle-class people. And I don't really understand what the issue is with a government levying one income tax, or more than one income tax -- the issue is the cumulative burden on individuals who can pay more or less. I don't believe that he language change that you cite, Nick, makes any difference in what the cumulative burden would or would not be.

William Dwyer Jr.  

Posted: October 22nd, 2020 2:21 PM

Of course it is, Kurt. I pay a tiny part of everyone else's lowered RE taxes- so appealing was always just a simple matter of financial self defense. T. Mac seems to think it's some dastardly scheme to evade one's fair share. I have to wonder what he'd think about PTAB, if he even knew what that was. That's where large property owners, i.e., commercial and industrial, recover huge amounts of RE taxes years after the fact.

Kurt Roskopf  

Posted: October 22nd, 2020 10:47 AM

William Dwyer -- Yes, a successful property tax appeal lowers the amount you pay. However, dollar for dollar the "savings" is paid by someone else.  Tom MacMillan -- All property owners have the right to use the appeal process to ensure their assessment is correct and they are paying the correct amount. Not appealing an incorrect assessment is foolish -- regardless of which side of this issue you are on.

Nick Polido  

Posted: October 22nd, 2020 6:29 AM

Mr. Schwartz, Mr. Binotti is addressing the content of your argument. Illinois is NOT like any other state!

Robert Zeh  

Posted: October 21st, 2020 7:45 PM

I love how Illinois gets compared to the states with graduated income taxes, but not to the states without any income tax at all.

Ben Venuti  

Posted: October 21st, 2020 6:32 PM

There are not enough millionaires and billionaires to make a dent in the pension and other debts. Guess what happens next? The 97% not affected next year become affected the year after. And on and on down the line, as the "Fair Tax" gives the same people in Springfield that brought you decades of fiscal irresponsibility the power to change rates and categories at will. A vote yes gives the foxes absolute reign in the hen house.

Nick A Binotti  

Posted: October 21st, 2020 4:34 PM

Yet another Fair Tax advocate citing that "32 states have a graduated income tax" as a reason to vote yes, yet fails to mention each and every one of those states also taxes retirement income. Not to mention most of those 32 states index their tax brackets to inflation and/or have married tax brackets double what single filers have, neither of which is offered by the Fair Tax. How can one argue we should to be like everyone else when the Fair Tax is unlike anything else?

Nick A Binotti  

Posted: October 21st, 2020 4:25 PM

This constitutional amendment removes the clause "At any one time there may be no more than one such tax imposed by the State for State purposes on individuals..." Still no explanation from our elected officials as to why this was necessary. You are not just voting on a graduated tax, you are giving the sate authority to levy multiple taxes on your income. Astonishing all these so-called experts on the Fair Tax side really don't know understand this beyond "Yay, I'm in the 97 percent."

Jim Schwartz  

Posted: October 21st, 2020 2:27 PM

Tom -- I'm wondering why, instead of engaging with the content of my argument, you are rehashing an old issue that has already been discussed and addressed. What are your reasons why the Fair Tax is not good public policy?

Dave Slade from Oak Park  

Posted: October 21st, 2020 2:17 PM

Not a chance does this get a "Yes" vote without concessions on pensions. And, yes, an option on these issues is to vote out politicians when they have been irresponsible. I'd love to send Don Harmon on his way, but he rarely has an opponent during primaries, and we never hear of any opponents during the state vote. I'll still vote against him no matter who it is against him. Same with Madigan. And Cullerton. These people aren't going anywhere, and the young ones are learning how to take over and play by the rules to keep the status quo when the older regime eventually leaves to become lobbyists.

William Dwyer Jr.  

Posted: October 21st, 2020 2:00 PM

So, the facts are that a whole lotta people appeal their property taxes- me included the 28 years I own property. It just lowers them a bit, if you're successful. It doesn't eliminate them.

Tom MacMillan from Oak Park  

Posted: October 21st, 2020 12:48 PM

The unstated is that this is coming from the same guy who appeals his own property taxes. Solving problems can only be done with other people's money.

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