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Why the Fair Tax Failed

It’s a testament to the broken trust between voters and Springfield that the bluest state in the Midwest couldn’t pass a graduated income tax.

An anti–Fair Tax sign lines a walkway in Palatine.   Photo: Stacey Wescott/Chicago Tribune

If Illinois Democrats are looking for someone to blame for voters’ resounding rejection of the Fair Tax, they should look at themselves — and at their leader, House Speaker Michael Madigan.

A progressive income tax is not a radical proposal. Had Illinois voted to adopt it, we would have joined 32 states that tax their residents on a sliding scale. A 2019 poll by the Paul Simon Center for Public Policy at Southern Illinois University found that Illinoisans favored a progressive tax by a 2-1. The idea that the wealthy should pay taxes at a higher rate was popular in principle. In practice, though, when voters were asked to give the Madigan-led legislature the power to take the lid off tax rates, 55 percent said no. As a constitutional amendment, it required a 60 percent “yes” vote.

Democrats should see this defeat as the bill coming due for decades of cronyism, corruption, ghost payrolling, insider deals, and all the other hinkiness that gives Illinois its reputation as the most politically dishonest state in the nation. The federal investigation into Madigan for pressuring ComEd into hiring his lackeys was the final bag of garbage into a dumpster the Democrats’ couldn’t shut the lid on, allowing the stench to spread all across the state. The story broke in July, four months before the election. The Fair Tax’s opponents took advantage, airing ads attacking “Springfield politicians” who couldn’t control their spending, and now wanted more of our money.

Austin Berg, vice president of marketing for the anti-Fair Tax Illinois Policy Institute, said his organization took an exit poll of 1,600 voters in October. Their number one reason for voting no on the Fair Tax was “distrust of Springfield.” That’s consistent with a 2014 Gallup poll which found that Illinoisans trusted their state government less than the residents of any other state. The margin wasn’t even close. Only 28 percent of us had a “great deal or fair amount” of trust. The next lowest was Rhode Island, with 40 percent.

Berg also cited “major tactical errors on the part of the ‘yes’ folks, all the way from drafting to how they marketed it.” Especially damaging were suggestions by prominent Democrats that the Fair Tax could make it easier to introduce a tax on retirement income, since that could be applied only to wealthy retirees.

Although the Fair Tax was not a partisan issue, support fell along partisan lines. It received a majority of votes only in the state’s two most progressive counties, Cook and Champaign. Less affulent counties in Southern Illinois, which would have benefited from the Fair Tax’s redistribution of wealth from the Chicago area, voted “no” by 80 percent or more, similar to their support for President Trump.

Former 47th Ward Ald. Ameya Pawar, a Fair Tax supporter, saw a connection between support for a billionaire president and opposition to a tax on billionaires. (The anti-Fair Tax movement was bankrolled by Illinois’s wealthiest resident, Ken Griffin, who contributed $53.75 million — less than he would have paid if the legislature had hiked his taxes.) To Pawar, the Fair Tax’s failure can be attributed to decades of conservative messaging that government is bad and wealth is good.

“For progressives, I think we have to ask a question: how are social service groups the elite and Ken Griffin is the champion of the working man?” Pawar said.

Instead of giving up on the idea of a progressive income tax, Pawar said, Democrats should “focus on narrative change”— beginning with blaming Griffin for the spending cuts that will result from the Fair Tax’s failure.

“It’s going to be very painful,” Pawar said. “Ken Griffin is forcing spending cuts to human services during the middle of a pandemic, at a time we need them most. That says a lot about the man’s character.”

One way to change the narrative is to change leadership. The Fair Tax’s defeat should be Madigan’s last stand as leader of the party and the House. (Madigan also bears blame for Illinois Supreme Court Justice Thomas Kilbride’s failed retention bid. Kilbride’s opponents sent out mailers portraying him as — you guessed it — a Madigan puppet.)

Any Democrats still afraid of Madigan should have been encouraged by the comments of Sen. Dick Durbin. Durbin, the only Illinois Democrat with more power and gravitas than Madigan, told Chicago Tonight that “[w]e paid a heavy price for the speaker’s chairmanship of the Democratic Party…I hope he takes that to heart and understands that his presence as chairman of our party is not helping.”

Of course, the fact that one of the bluest states in the nation couldn’t get a graduated tax passed means the Democrats have bigger problems than Madigan, who was just elected to his 26th term as a state representative from the Southwest Side. Before the Democrats can ask the voters for a tax hike — even one they sell as a hike for only 3 percent of taxpayers — they need to regain the voters’ trust. In Illinois, that’s going to take a lot of work.

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