It's formally titled the "Allow for Graduated Income Tax Amendment" but you wouldn't know that based on how they're attempting to sell it. It's being sold under a disguise of fairness and they've been successful in making everyone use the word fair to talk about it. Fair is just the A/B tested keyword they're hoping will give them the necessary market pentration and fair is the word they've decided your buyer persona profile will instinctively respond to when you're ready to choose "YES" or "NO" in your tiny little voter booth. And, trust me, they've done that work and written the checks to the high paid consultants who've chosen the keyword that will best trigger that "YES" response.
But first, let's get a few things out of the way.
I am not a billionaire. You're shocked, I know. I am not one of the wannabe cool-kid billionaires like Jeff Bezos, Patrick Soon-Shiong, or Ron Perelman, nor am I a hundred-millionaire like John Henry or Michael Ferro Jr. swooping in and fashioning themselves as self-styled saviors of a dying industry and imagining they'll be received as conquering heroes. I am not a front for any hedge fund or venture capital firm. I am not a Koch brother or an Adelson or a Murdoch. I am not a discount Bruce Wayne moonlighting as an intrepid intellectual on a little known internet publication. I am not even a trust-fund baby from one of the wealthiest families in America who purchased an Illinois governorship from the most corrupt Speaker of the House in the history of this state.
I am not a millionaire. I suppose, if you include my home that I still owe money to the bank for my mortgage, I'm a couple hundred-thousandaire? But that's not true either because, the reality is, the sale of my home would require a significant profit be made to push me into that type of net worth territory. And my home value, along with every one of my family, friends, and neighbors in this state, is shrinking by the day.
I do not make over $250,000 per year. I do not own the business that provides my main source of income where I go to work every day to try to pay the bills and bring home a little extra for my family.
Don't worry, I know what many of the "comrades" out there are thinking...
- "If he's not rich how could he vote against his best interests?..."
- "If he's not rich, he must be stupid...w-w-why does he not want to take more money from the rich? They're not just going to give it him!"
- "What is the nutritional value of organic kale?"
- "All we have to do is implement MY theory on communism and it will for sure work this time!"
Let's clarify a couple more things.
No one is paying me to write this. Now that I think about it I probably should have asked someone to pay me to write this, since everyone else in this state pays to play politics. Sadly, my lack of business sense aside, there was no suitcase of cash that exchanged hands in some damp parking garage at midnight given to me by some mysterious, evil, corporate overlord pulling the strings in the shadows and coming for your hard earned guaranteed happiness gifted to you by the Grace of God in the form of 10% coupons on socks and cardigans on the Magnificent Mile or State Street collections at Christmas time.
In fact, my little company that publishes this website is explicit and adamant about the following policy:
We refuse to cater to outside shareholder investment or change course based on the whims of venture capital. We refuse to rely on donations or apply for federal and/or non-governmental organizational grants. While we do work with advertisers, annual budgetary decisions are made solely upon the readership/subscriber base.
You might be surprised to learn that I have serious and genuine qualms about the behavior of modern industrialists and their unchecked "free" market posturing that only seems to be free in one direction. You might also be surprised to learn that I'm not a fan of banks, deference to the holy stock market or its mediator priests, or for-profit insurance companies outside of late 19th/early 20th century mutuals. I don't like the epidemic of endless strip malls and corporate sprawl destroying our natural landscape, I think the brazen and unfettered gutting of small business in favor of mega-multinational corps and the resulting loss of independence American small business used to provide is bordering on a national tragedy, and I have significant problems with (that's really better described as pure anger and disgust for) the indignant selfishness of an older generation that utterly refuses to reexamine their mistakes and continues to ignore the massive upward transfer of wealth in recent years solely because it benefits their personal twilight paired with the hollowed-out shell that stands in the place of my generation's historical perspective toward finances and the outlook for our prospective futures in the face of this continued betrayal.
So why am I telling you to Vote NO on the upcoming Illinois tax constitutional amendment this November 3rd?
Allow for Graduated Income Tax Amendment
For a moment, let's ignore my belief that income taxes shouldn't exist, period. Let's ignore my belief that income taxes are entirely unconstitutional and, beyond that, my belief that anyone arguing for a tax on income or anyone who continues to vote for anyone who agrees with the argument for a tax on income is a lunatic.
What does the new amendment look like in real dollars?
Currently, all taxpayers are protected under the Illinois Constitution in that, no matter how much a person makes, they pay the same income tax rate as everyone else. The current income tax rate in Illinois is 4.95%. Just so we can visualize the numbers and get a proper perspective, if a person makes the following income, here is their annual tax bill due to the state of Illinois under the current rate:
After the amendment to the tax law, Illinois legislators have proposed the following tax rate changes due to the state of Illinois:
That second chart is all rough estimate, of course, as there are other deductions and variables to consider, but you get the general idea. To be honest, accounting bores me to tears but the specifics don't matter much for the point I'm trying to make. My readers are generally more intelligent than I am and they're certainly smart enough and independent enough to figure their own tax bills.
The first thing you may have noticed when looking at those charts, under the new proposal, taxes on lower incomes are not going to go down. They're staying the same.
Hold on, let's be "fair" about this so no one accuses me of lying.
The median household income in the state of Illinois is just north of $60,000 per year. So, the average family's annual income tax will go down approximately $35-$50 under the new proposal. Hopefully, if this amendment passes, the median family in the state of Illinois will choose to use those incredible savings to go out to an extra dinner at any of their local bar/restaurants left standing after the nightmare that is their state government's handling of their local economies following the coronavirus pandemic.
Here's where I'm going to shock you more. I understand, and I even sympathize with the idea, that an equivalent tax on two individuals making wildly different sums of money affects them in wildly different ways.
Sure, it's hard to argue a lack of fairness against a tax system where everyone pays the exact same. At a glance, it seems to be the pinnacle of fairness. But, though the number is much higher to a person who makes $1 billion and even though their tax burden is the equivalent to over 33,000 Illinois citizens making $30,000 per year, or 20,000 Illinois citizens making $60,000 per year, to that person who makes $30,000/year, that $1,495 tax bill could be an extra mortgage or an extra rent payment or two. That $1,495 could be almost half an annual food budget. That $1,495 could be half a year's worth of car payments, a necessary commodity and essential piece of property compared to a billionaire who, aw shucks, what's an extra $30,000,000 when they have another $920,000,000 to play with anyway?
So how could I possibly and emphatically be telling you to vote NO on the upcoming Illinois tax constitutional amendment this November 3rd?
Realities do not care for sympathies.
Realities vs. Sympathies
According to Forbes magazine, in 2019 there were 18 billionaires who call Illinois home. If you're wondering, 5 of those 18 billionaires were members of the Pritzker family.
For the sake of this conversation, let's throw out anyone earning an income above $10,000,000/year. When a person reaches the $10,000,000 income level, money takes on an entirely different meaning. There are so many different investments and funnels that paying a bill for almost anything ouside of super-yachts and private islands is of little concern. More important, even if their annual income tax burden climbs an additional $300,000 annually, or climbs an additional $3,000,000 or $30 million respectively, not only does this type of income level have multiple homes, its probable they have multiple homes in different countries. To them, "moving" their primary residence is as simple as a few signatures on a piece of paper so choosing to call Illinois their primary residence is either a political or charitable decision or a casual laissez-faire attitue toward the matter or a subtle combination of all of the above. In essence, like your Governor has repeatedly shown over this last year and before, the "rules" that you and I are forced to play by don't apply and they're happy to send their family wherever their little hearts desire, even when they're demanding you lock down and stay in your state...or else.
So throw out that income level. It may as well not exist. It can be gone whenever they want and at the snap of their fingers.
Let's look at the tiers below the $10,000,000 level.
There's no hiding it, a person making $1,000,000 annually or greater is, by anyone's definition of the word, Rich. Unless they've vastly overplayed particular investments, they are not worried about money. They may be a successful business owner or a high ranking executive and worry about certain obligations but life sure ain't too bad, know what I mean? If their job allows they, too, could move anywhere they so choose but, focusing on this conversation, would an extra $21,000-25,000/year on their income tax bill, to force them to give away $75,000/year to the state of Illinois compared to $50,000 cause them to pull up stakes and leave? Maybe. But I doubt it hurts much and likely wouldn't be enough to tip any of their scales.
So now let's take a look at those Illinoisans making between $250,000-$1,000,000 annually. Anyone making greater than $250,000/year is also, no doubt, rich by comparison to most everyone else. No one is feeling sorry for anyone bringing home this type of money, even if they've likely worked very hard the majority of their lives to achieve it. But, to the people making this type of money, an extra $10k-$15k income tax could mean the same increase as what they pay in annual property taxes. It's as if they're adding or paying for a second home they don't actually have. It's like an added investment into a small business they don't have that could help them continue to build and continue to improve their family's station. That money could be the lakehouse they've worked so hard to achieve or the difference in the quality of schools they want their children to attend or level of care an elder family member receives in hospice. It could mean significant additional contributions to their own retirement investments.
Again, no one is feeling notably sorry for anyone at this income level and you may scoff at the idea of a "lakehouse" as being a sacrifice but the point is this is where the questions like "Is it worth it to stay in Illinois(?)" begin to really start to sink in and intercept some firing synapses to make them question the choice to stay. These people may not want to move but can financially afford to move and now have the extra incentive to do so.
You may not like the answer but many are choosing to say "No."
We can talk about quality of life in another piece but, for many years now, Illinois has been losing citizens and taxpayers. And we're not talking about the type of move where someone has to pull up stakes and throw their family lives into turmoil and move across oceans and borders and under entirely new governments and lifestyles.
Lake Forest residents can be Wisconsinites in under a half hour. Indiana is even closer for residents in Chicago. In fact, most living in Cook's collar counties can be non-Illinoisans in under an hour. For the middle brackets, it may be an added challenge but it's hardly a huge burden or change to any family's lifestyle. Or they can just change addresses to homes in Florida or Texas or Tennessee or wherever state income tax doesn't exist.
Before you argue, "Well some of those neighboring states have progressive taxation!" While true, there are many other states with flat taxation and even zero income tax that have not been wildly mismanaged under incompetent and corrupt leadership who have spent the last 20-50 years using the taxpayers of the state of Illinois like a spoiled bratty teenager home alone for the weekend with his lawyer father's black card. States that don't have debt obligations greater than the GDP of 134 countries. Places where state credit ratings are not far and away the worst in the nation.
Just so you can have a visual of Illinois' credit rating as of 2019:
By their own admission, advocates of this new tax proposal say it only affects 3% of earners in our state. That's around 350,000 Illinoisans. But what happens when many of those rrrrrriiiiiiiiiich(!) Illinoisans are gone? Guess who becomes the next 3% richest in our state? And after that 3% is gone, guess who becomes the next 3% richest? And so on and so forth?
But that's not all, folks...
What the new proposal doesn't do...
By the way they're acting, you'd assume that your one little "YES" vote gifted to your Illinois legislators will fix any and all financial troubles the state of Illinois faces due to their mismanagement. This is categorically false.
This amendment does nothing to limit your legislators from increasing taxes on incomes less than $250,000/year. In fact, it specifically eliminates all restrictions they currently have to allow them to tax you and your family at any rates they deem fit. It's estimated that, even with a "YES" vote, Illinois' poorest citizens will have, if not the highest, at least the 3rd highest tax burden in the nation. And this amendment will give the state government unbridled and unlimited discretionary power to tax the poorest residents even more.
This amendment does nothing to reduce the burden of all other pockets your government has their hands in, including your property taxes, sales taxes, gas taxes, tollways, or whatever other taxes and fees their legislative hearts desire and demand. This amendment does nothing to help small business owners and will raise taxes on nearly 50% of those small businesses. It will raise corporate rates to the 2nd highest in the nation.
Perhaps most important, it does nothing to put even a small dent into the behemoth that has become the Illinois pension crisis. This amendment doesn't even balance the current budget, which your Illinois state legislature has failed to pass a balanced budget for 20 years.
So why, in God's name why, would you give these people the ability to take more money from you? Forget the rich, in God's name why would you give them the power to take more money from you, the working class person, when they have proven time and time again that they are incapable of accomplishing their most basic and fundamental duties of adulthood like balancing a checkbook?
I've written all these words and still managed to not once discuss the fact that the global coronavirus pandemic has put your state and national economy into perhaps the most precarious position it has ever been. Not once have I mentioned the uncertainty surrounding your job and livelihood, and the jeopardy and trepidation in facing maybe the darkest unknown economy your adult life has experienced. Your humpty dumpty state long ago fell off the wall but now your king's horses and king's men of the national and global economy are laying cracked in the dirt right next to him. Only now, not only are your state representatives not going to be able to put you back together again, now they get to pretend that we're all in this financial mess together and it had nothing to do with them, we were all just laying splat upon the bedrock together this whole time.
All that said, you may still be asking yourself, "But Craig, how could you possibly be telling us to Vote NO on the upcoming Illinois tax constitutional amendment this November 3rd?"
Here's what it comes down to...
I'm just a regular guy born and raised in Illinois. Through my entire life there has been but one political constant, one Ariadne's Thread, one trail of breadcrumbs from Hansel's hand. That is the incompetence and corruption in the mismanagement of its resources by my state government.
And now, the same people who are responsible for overseeing the joke we call our state budget and pension system that a scant glance from a child could tell you is, was, and forever will be a mistake, the same people who have destroyed the finances and therefore the future of the children's-children's-children of the state of Illinois, the same people who wrote the 1970 Illinois Constitution they now are asking you to amend, are demanding that the citizens of Illinois are "unfair" unless we give them more money to bail them out and provide cover for their abject failures?
You should be insulted. You should. You really should.
For fifty years they have operated under this document. For fifty years they have bullheaded and bullied their public policy decisions through this document. For fifty years they have smirked at, scoffed at, and castigated anyone who would dare tell them to stop or even slow down and think about what they're actually doing for more than 2 seconds. For fifty years, their media lapdogs and the wannabe revolutionaries peppered through Cook and its surrounding counties have been all too happy to tell you that it's you who need to pay more to help when they have had any and every opportunity to write as big a check their mouths can cash and pay as many taxes as they damn well please to prop up this ponzi scheme that stands in place of Illinois state government, but don't and never will. And now, now they have the utter shamelessness to stand before you at a podium and plaster your TVs and your internet browsers and your mailboxes with ads to tell you to vote to give them more and threaten that, if you don't, you're not being fair?
You should be insulted.
These same people have the audacity, the arrogance, and the presumptuousness to tell you that you need to provide them with yet another excuse in an endless list of excuses they're sure to hold and use against you politically?
These same people who have the political wherewithal to destroy your home values, put your children's-children's-children into impossible debt, come back for more again and again and again, and then roll their eyes at you in disdain if you dare question giving them another blank check and carte blanche over your tax dollars?
These same people who have ruled over their fiefdoms with impunity because they've manipulated elections or appointed others so desperate for power they'll follow them off cliffs or given cushy jobs and titles to old friend's from the neighborhood or put their own family members in charge of overseeing their behaviors and practices, and these people, THESE SAME PEOPLE(!) have the cojones to tell you you're being unfair?
You should be insulted.
For the love of God, vote "NO" on the Illinois "Fair" tax amendment.
BA-DUM-TSS! #gotemboth ↩︎
An important NOTE: I am not some sort of anarcho-libertarian who does not believe in taxes at all or that a governing body of a region does not have a right to tax. I'm specifically talking about income taxes, in this case. ↩︎
That's a conversation for a different day. ↩︎
Aside from the aforementioned belief that income taxes should not exist, of course... ↩︎
And due to the continued advancements in technology, more and more, jobs are allowing... ↩︎
Which, quite often, the people in this bracket are children of the lower bracket who worked and continue to work their asses off to get into this bracket. ↩︎
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