James Pollard / The Daily Northwest
A sign in support of the fair tax change outside a polling station in Evanston. Since Illinois voters rejected the Fair Tax Amendment in November, lawyers across the state have been scrutinizing the way forward.
Since the Fair Tax Amendment was rejected last November. Proponents are focusing their efforts on building more confidence in the initiative and making sure people across the state understand its purpose.
The fair tax change would have introduced a progressive income tax in Illinois. The state currently prescribes a flat income tax of 4.95 percent.
According to the Institute for Taxes and Economic Policy, Illinois ranks eighth nationwide for tax equality. Across the state, the 20 percent with the lowest incomes contribute over 14.4 percent to total state and local taxes, while the richest 1 percent contribute just under 8 percent.
Proponents of the change fought for tiered income tax to eradicate the tax inequality that is contributing to growing income and wealth inequalities. Now they evaluate the failure and consider how to proceed. Ann Courter, an issue specialist with the League of Women Voters, said the election initiative failed in part because people did not trust the government to responsibly spend the increased revenue.
“We have to work … to make sure we have a clear and precise message,” Courter said.
Under the Fair Tax Amendment’s tiered tax plan, only 3 percent of taxpayers – those who earn more than $ 250,000 a year – would have seen tax increases. Those with incomes less than $ 100,000 would have seen tax cuts.
The tax hike for the richest 3 percent of Illinois residents would have raised an additional $ 3.4 billion over twelve months, which would have allowed Illinois to close its deficit and cut sales and property taxes. After a 2020 report Through ITEP, the additional income would have reduced income inequality and helped to fill the racial wealth gap.
“(Income inequality) is a big problem across the country,” Courter said. “This kind of … void in our country is just incomprehensible.”
According to the left-wing Center for Budgetary and Political Priorities, the gap between the lowest and highest income households has widened nationwide since 1970, with Illinois consistently ranking in the top ten most unequal states.
The ITEP report also finds in a regressive tax system that this inequality increases when the poor bear greater tax burdens than the rich.
“Because the richest Illinois people have less tax liability under the current flat tax … the rich can invest this” saved “tax money to build even more wealth,” the report said. “Meanwhile, the same laws make it difficult for low- and middle-income families to get through … (leading to) wealth gaps that widen over time and are racially and ethnically greatest.”
These inequalities in prosperity are often racial and ethnic. A 2020 report determined by the Federal Reserve to own the middle white family nationwide $ 188,200 in net worth while the middle Black and Latinx families own $ 24,100 and $ 36,100, respectively.
Evanston’s reparations fund has searched In order to narrow the racial gap, proponents believe that taxes are another important area to tackle injustice.
“Taxes are huge when it comes to … changing systemic racism,” said Kemone Hendricks, founder of Evanston Present and Future, a nonprofit that focuses on racial injustice and redress. “If (the fair tax law) were passed, it would have closed a large part of the (racial) wealth gap.”
However, the amendment was not accepted – in fact, it was rejected by a margin of almost 7 percent.
The amendment was widely viewed with suspicion and was rejected by billionaires like Ken Griffin, who donated $ 46,750,000 to the No Progressive Tax Coalition, a group organized to block the initiative.
Shirley Adams, a 74-year-old Evanston resident, said among her friends and neighbors that a general distrust of the government caused by the history of political corruption in Illinois has fueled opposition to the change. She said this distrust made voters more vulnerable to misinformation.
“A lot of people thought they would vote to punish politicians for being incompetent or … unscrupulous,” said Adams. “But instead of punishing politicians, I think they punished themselves.”
Some opponents also feared the change could lead to higher taxes on small businesses or tax increases in all income brackets. However, Governor JB Pritzker’s Office of Management and Budget estimated that 95 percent of small businesses in Illinois would not have been affected.
Sarah Bingaman, who works with Indivisible Rural Illinois, plans to focus on combating misinformation and restoring trust. She hopes that this will lay the groundwork for a different outcome when the democratic leadership proposes the amendment again.
“It’s all about trust,” said Bingaman. “If you can’t talk to people, you can’t change their minds about misinformation.”
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Twitter: @ willsclark01
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