Two Illinois tax experts took part in a debate last week at the Union League Club in Chicago to discuss the progressive tax proposal that will be on the ballot in 2020.
Bipartisan Center for Tax and Budget Accountability Executive Director Ralph Martire shared the stage with Chicago attorney Dan Proft, a political advocate and former Republican candidate for governor.
"When you’re talking about tax policy, the last thing that becomes part of the conversation is best practices and data," Martire said. "America and capitalism born together — they were meant to be. From a tax policy standpoint, the only way you can do that is a graduated rate structure. If we lived in a perfect world, we’d just put in a graduated structure and go on with life, but we don’t live in a perfect world — we live in Illinois."
Illinois attorney Dan Proft
Martire says that Illinois is required by the state's constitution to use a flat tax structure.
"Illinois needs to raise more revenue," he said. "There is no argument anyone can make that spending on services is driving the deficit problem at the state level. Ninety-seven cents of every dollar goes to education, health care, social services and safety. Three percent goes to other — that's economic development, parks, central management services, etc."
Martire says that in the 2020 budget, that amounts to $27.1 billion. In 2009, he says, the budget was $27.5 billion.
"Spending on services isn’t the problem," Martire said. "We have a tax policy not responding to the economy. You have to raise revenue from where the economy is growing ,not where it's declining."
Proft disagrees. He says it no longer makes financial sense to live in Illinois, especially for the middle class.
"Tax hikes will eventually come for middle-income families," he said. "Illinois continues to be the worst in the nation for providing services to developmentally disabled — those who really need state services and they are continually failed. The graduated income tax proposal is a fraud, plain and simple.
"This is counter to Econ 101," Proft continued. "West Virginia and Illinois are the only states in the nation that have seen outmigration five years running. It’s not happening everywhere. Chicago is hemorrhaging people."
Proft noted that proponents of the progressive tax proposal say it will raise $3.5 billion dollars.
"What’s the end game here?" he asked. "This is this starting point, how can you not see that? Where is the money going to come from? Does anybody care how we got here?"