Prairie State Wire

The graduated income tax will give politicians more power to tax and as a result tax hikes could occur on a whim, according to Andrew Nelms, a senior adviser with Americans for Prosperity Action, a 527 tax-exempt political organization.

If passed by voters, the graduated income tax, also known as the progressive tax, will replace the state’s current flat income tax, making it easier to tax retirement income, for example, by allowing one set of rates for ordinary income and a separate rate for retirement income, according to the Daily Herald.

"It's more difficult to raise taxes under a flat tax because you have to raise taxes on everyone whereas with a graduated tax you can begin to tinker with it and, all of a sudden, politicians can raise taxes on this group of people not that group of people and that’s how rates began to creep either slowly or quickly,” Nelms said.

As previously reported in the DuPage Policy Journal, voters will decide by referendum whether Illinois should adopt a graduated income tax after both chambers of the state legislature passed the Joint Resolution Constitutional Amendment No. 1.

But Americans for Prosperity Action disagree with the amendment because it could drive retirees out of state.

"Illinois currently does not levy the state income tax on retirement income so it is tax-free and that's one of the very few bright spots on the Illinois tax horizon," Nelms told Prairie State Wire. "Illinois has the highest outbound migration of any state in the nation. We've lost more residents every year for the last more than half a decade than any other state and one of the only things that prevent retired folks from leaving is the fact that their retirement income isn't taxed by the state." 

Nearly 1.63 million people have left Illinois for another state since 2014, according to media reports.

“The uncertainty about whether or not your income is going to be taxed seems to me like a factor that would influence their decision,” Nelms said.

The DuPage Policy Journal reported that Illinois Gov. J.B. Pritzker introduced the graduated tax rate in order to ease the burden on middle-class families by raising $3.4 billion in added state revenue. Yet critics argue this it will not stop rising pension gaps, health coverage prices or property taxes.

“Politicians have made bad decision after bad decision, which has lead Illinois to be such an outlier in so many ways with having the highest unfunded public pension liability in the state, the lowest credit rating of any state in the nation, the highest combined state and local taxes and being identified as the least tax-friendly state in the nation,” Nelms said. “Our position is that raising taxes and making it easier for politicians to raise taxes isn't the solution."