SPRINGFIELD, Ill. (AP) — Voters have rejected a proposal to abolish Illinois’ flat-rate income tax for one that would take a greater share from wealthier taxpayers.
The outcome of Tuesday’s vote handed Gov. J.B. Pritzker the first major defeat of his 22-month tenure. The Democrat campaigned on establishing a progressive tax which he said would make tax payments the same or lower for 97% of the state while those making more than $250,000 would pay on a graduated scale.
Dubbed the “Fair Tax” by Pritzker and supporters, it was to generate an extra $3 billion a year to help pay down an $8.3 billion backlog in past-due bills, fill revenue gaps in the state budget that lawmakers had hoped federal pandemic relief would fill, and billions of dollars more in debt.
“Now, lawmakers must address a multibillion dollar budget gap without the ability to ask the wealthy to pay their fair share,” Quentin Fulks, chairman of Vote Yes for Farness, said Wednesday morning in a statement. “Fair Tax opponents must answer for whatever comes next.”
Pritzker warned that defeat of the amendment would mean a general increase of the flat rate, 15% to 20% across-the-board cuts in spending or other painful measures.
The current flat-rate is 4.95%. The amendment would have applied that rate, or a lower one, to people making less than $250,000. For those earning more than $250,000, the rate would climb and top out at 7.99%
Both sides of the debate invested heavily in their positions, spending a combined $100 million on advertising. Opponents contended that Pritzker and fellow Democrats who control the General Assembly would not use the extra revenue to pay debts but to use it for new and expanded programs that the state can’t afford.
As for the rich, critics claimed they would leave the state, leading to a greater burden on middle-income families.
“It is clear that Illinoisans do not trust this Legislature and this administration to spend more of their precious tax dollars without restraint,” Illinois Chamber of Commerce President and CEO Todd Maisch said in a statement Wednesday.
Approving an amendment to the Illinois Constitution requires three-fifths majority approval, or 60% of all who vote on the question.
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