A poll of Illinois residents found many think Gov. J.B. Pritzker’s progressive income tax proposal will have a negative effect on the state’s businesses, leading to layoffs or relocation in response to the higher rates.
The Illinois Business Association, a nonprofit business advocacy group, commissioned a poll by Chicago-based Ogden & Fry asking Illinois residents about how businesses will fare under Pritzker’s proposed graduated income rates, which are dependent on voters passing a ballot initiative in 2020.
Of 615 randomly sampled likely 2020 General Election voters on Nov. 15, 68 percent agreed with the statement that “Businesses will cut jobs, or relocate jobs out of state, and Illinois’ economy will suffer” under the proposed rates rather than create more jobs to grow the state’s economy.
Fifty-seven percent said they didn’t trust Illinois politicians, saying they though lawmakers would raise rates in the future beyond what was initially proposed.
“Our poll shows that, by a two-to-one margin, [voters] believe that raising taxes on Illinois businesses won’t lead to economic growth,” Illinois Business Association President Jared Carl said.
Like other interest groups that support or oppose a measure, the poll questions were often couched in a way that leads the individual in one direction or another. Carl said the organization's questions were solely focused on how businesses would be treated under Pritzker’s proposal.
The poll doesn’t reveal the partisan split of respondents, but a majority of those who surveyed were from Democratic strongholds such as Chicago.
When phrased differently, two-thirds of likely voters said they supported the progressive income tax, according to a March poll done by the Paul Simon Public Policy Institute at Southern Illinois University at Carbondale. Even as a nonpartisan polling group, those questions were more focused on the idea of a “millionaire’s tax” rather than how the higher rates would affect businesses.
That tracks with talking points from Pritzker and others who support the progressive income tax.
“...focusing revenue collection on low- and middle-income folks whose earnings are declining in real terms over time, rather than on affluent individuals who have literally realized all the growth in income in Illinois since 1979, doesn’t work — if you believe in math,” Ralph Martire, president of the Center for Budget and Tax Accountability, wrote in a recent opinion piece.
Using 2017 IRS data, the organization estimated that 84 percent of Illinois' pass-through business income would pay higher rates under the proposed structure in 2021. The “claw-back” provision in the proposed rates for filings over $1 million, the group said, would have affected more than $10 billion in business income, subjecting the entire gross level of income to the top rate of 9.49 percent. That would be one of the highest rates in the nation.
Changes to the federal tax code also mean businesses would not able to deduct the higher rates from income taxes over $10,000, something that’s has caused suburban Chicago homeowners a good deal of grief because they’re no longer able to deduct the full amount of their property taxes that, in some cases, rise well above that threshold.