A progressive income tax will disproportionately affect women and minorities and shrink Illinois’ economy by nearly $2 billion. That’s according to an analysis conducted by Berkeley Research Group.
The Illinois Chamber of Commerce said the analysis also shows that changing Illinois’ flat income tax to one with higher rates for higher earners would increase consumer costs and lead to reduced household spending.
“This independent study concludes what many of us already knew: this is the worst possible time for a $3.4 billion tax hike on Illinois families and businesses,” said Illinois Chamber of Commerce President and CEO Todd Maisch. “The pandemic has already crushed small business owners, manufacturers and farmers, and this independent study proves that the Tax Hike Amendment would be the last straw for many more.”
The group Vote Yes for Fairness, which supports the progressive income tax amendment, said the Chamber is trying to mislead voters.
“It’s not surprising that a study the Illinois Chamber of Commerce paid for in their efforts to protect our broken tax system is trying to mislead voters on the impact of the Fair Tax,” said Vote Yes For Fairness Chairman Quentin Fulks. “The fact is our current tax system is fundamentally unfair, forcing essential workers like our nurses and grocery store clerks to pay the same tax rate as millionaires and billionaires. The Fair Tax will set things right, while keeping taxes the same or less for at least 97% of Illinoisans.”
Maisch responded and said they aren’t misleading anybody.
“I think it’s anything but,” Maisch responded. “I think that everybody knows that when they look at other states’ experiences we see the same gameplan time after time: The people who want to spend more and more of hard-earned money are never satisfied taxing millionaires. They always make their way to putting tax increases on the middle class.”
Other key findings of the report the Chamber highlighted were reduced GDP of $1.8 billion, of the $322 million of higher corporate taxes being pushed down to the consumer, out-migration of high-income households, and no material income tax relief.
“The average annual tax relief per filer in the lower-income brackets is small, and might be less than a single-family meal at a fast food restaurant for many filers,” the Chamber said.