Illustration by Yonatan Popper
Illustration: Yonatan Popper

I was in my neighborhood tavern, watching a Bears-Packers game, when, out of the blue, the owner started talking about the state’s income tax structure. “It’s time for a progressive tax in Illinois,” he declared. “It’s only fair that if you make more money, you should pay a higher rate.”

Democratic legislators have been trying for years to pass such a bill. They say it will cut taxes for most Illinoisans while simultaneously raising more revenue to deal with the state’s fiscal crisis. But they’ve always run into obstacles. First of all, a flat tax — which currently requires everyone to pay the same 4.95 percent — is enshrined in the state’s constitution. Last year, 50 House Republicans declared their opposition to any effort to unwind that requirement, swatting down a resolution sponsored by Senator Don Harmon, a Democrat from Oak Park, to place an amendment on the ballot.

Now, though, the progressive tax moment may have arrived. Democrats hold supermajorities in both chambers of the General Assembly. House speaker Michael Madigan and Senate president John Cullerton favor it. Even tavern keepers, the modern-day versions of Mike Royko’s Slats Grobnik or Finley Peter Dunne’s Mr. Dooley, think it’s a good idea. A survey by the Paul Simon Public Policy Institute at Southern Illinois University found seven in 10 voters favor a progressive tax. And the new governor, J.B. Pritzker — a billionaire whose taxes would go way, way up under a progressive system — made it a key plank in his platform, though he never got specific on details, and still hasn’t.

At presstime, Harmon was planning to introduce a new amendment on “day one” after the new General Assembly was sworn in, confident he already had the votes in the Senate. “I hope with Governor Pritzker, we’ll have the votes in the House, too,” he says. “A governor goes a long way toward creating the atmosphere for legislators to support it.”

Iowa, Wisconsin, Kentucky, Missouri — almost all our neighbors employ a progressive income tax. In fact, of 41 states that levy an income tax, Illinois is one of only eight with a flat tax. So why not us? When the state’s constitution was written in 1970, a flat structure was popular. That was a moment of unprecedented economic equality in America. But the decades since have seen a divergence in the fortunes of the wealthy and the middle class, with the top 1 percent of taxpayers realizing nearly all the gains in income. Yet everyone from billionaire investor Ken Griffin to the Tamale Guy is still paying the same rate, making our tax system ever more burdensome to low-wage earners. According to Cutting Taxes for the Middle Class and Shrinking the Deficit: Moving to a Graduated State Income Tax in Illinois, a 2018 study by the Center for Tax and Budget Accountability, “Illinois’ unfair tax system fails by design to generate adequate revenue to fund core public services by failing to respond to how income growth is distributed in the modern economy.”

J.B. Pritzker
Pritzker has pledged to get a progressive income tax on the ballot in 2020. His spokesperson vows it will “lower the burden on the middle class.” Photo: Armando L. Sanchez/Chicago Tribune

Haters say a progressive tax would just open up a new revenue stream for profligate, irresponsible Illinois politicians, drive away wealthy residents, and eventually result in tax increases for the middle class. “We’re a rapidly shrinking state, and the people leading the exodus are higher-income and prime working people,” argues Austin Berg of the antitax Illinois Policy Institute. A graduated tax, he says, “is a deterrent to new investment and putting down roots, partly because of the uncertainty of the rates, once you open up that can of worms.”

Before an amendment goes to the voters, legislators intend to pass a bill detailing the brackets and the rates that would go into effect. (When Harmon introduced a progressive tax amendment in 2014, he accompanied it with a proposal for a 2.9 percent rate for taxpayers earning up to $12,500; a 6.9 percent rate for those earning more than $180,000; and 4.9 percent for those earning in between.) Once a graduated tax is in the constitution, the rates can be adjusted by a simple majority of the legislature.

In the current General Assembly, Republicans no longer have the votes to block a constitutional amendment, but House minority leader Jim Durkin, a Republican from Western Springs, says he’s going to try anyway. And if he fails, Republicans will mount an “education campaign” to dissuade voters from approving a progressive tax. (Some very rich people don’t like this idea, so expect a barrage of TV ads.)

Durkin doesn’t believe the state should tax the wealthy to generate revenue for pensions; instead, politicians, retirees, and unions should get together to reform the pension system. Nor does he believe a progressive tax will soak only the rich. “I don’t trust the Illinois legislature to negotiate [tax] rates,” Durkin says. “Their response to everything is to find a way to tax citizens and businesses more. There aren’t enough billionaires around to cover the costs of this [progressive] system; eventually, it’s going to trickle down, and the middle class is going to suffer.” As evidence, Durkin points at New Jersey, another industrial state, where married couples earning $80,000 a year pay 5.525 percent — higher than Illinois’s current tax rate.

Still, if November’s elections demonstrated anything, it’s that Illinoisans are in a progressive mood — including their approach to taxes. “If the bartenders are talking about it,” says Harmon, “that means we’ve been successful in beating our drums.”