Voters and lawmakers from the Atlantic Ocean to the Rocky Mountains are embracing lower, flatter taxes
Voters and lawmakers from the Atlantic Ocean to the Rocky Mountains are embracing lower, flatter taxes. Earlier this month Colorado rejected “Amendment 66,” which sought to scrap the state’s flat 4.63% personal income tax & implement a two-tiered graduated, or progressive, one with proposed rates of 5% on income up to $75,000 and 5.9% on income above that amount. This proposal would’ve increased taxes by nearly one billion dollars a year. ”‘We congratulate Coloradans for having the common sense to reject this unnecessary and unjustified tax grab,’ said Dustin Zvonek, the Colorado state director for Americans for Prosperity, which opposed the measure. ‘Passing Amendment 66 would have gravely wounded the state’s economy and business climate,’” wrote the Denver Post. “Amendment 66 barely eked out a victory in two counties – Boulder and Denver – and was soundly defeated in the other 62 counties across the state,” according to the Colorado Springs Gazette.
Here in Illinois, an effort is afoot to amend our Constitution to scrap our flat income tax and switch to a progressive one. Folks pushing the progressive tax have suggested an eight-tier rate schedule which tops out at 11% and raises taxes on everyone making more than $5,000. Hardly the rich! The interesting difference is that Colorado voters were presented with actual rates. Here in Illinois, politicians are considering asking Illinoisans to bless the notion of a progressive income tax, leaving the rest of the minor details (e.g. brackets & rates) at the discretion of the chronically imprudent Legislature.
Lest we forget, this is the same cast of characters who promised to use the additional revenue from the historic 67% temporary tax hike of 2011 to pay down bills. Our backlog currently stands at $7.5 billion, will balloon to $9 billion by year’s end and Comptroller Judy Baar Topinka has announced that the state just recently finished paying all 2012 bills. For perspective, consider two things: Illinois had zero unpaid bills as recently as the end of FY 2007 and $9 billion is greater than the annual tax receipts of more than half the states.
In North Carolina, Governor Pat McCrory (R) and Tar Heel Legislators approved a plan in July to switch the state from a progressive income tax to a flat one – exactly the opposite of what some are advocating in Illinois. The result? “An economist with the nonprofit Tax Foundation wrote that…it (the switch) would increase North Carolina’s ranking in the group’s state business climate index from 44th to 17th,” wrote the Associated Press. Meaning, North Carolina would leapfrog past Illinois (currently #31 on the list, down from #16 in 2011 before the increase).
In order for Illinoisans to have jobs, there first must be jobs to be had. Bad public policy led to our second-highest unemployment. Let’s not make it worse with additional bad public policy.