By Kristina Rasmussen -
Proponents of a progressive income tax hike want to set into motion one of the largest transfers of wealth in the history of Illinois. Not from the wealthy to the poor – but from the general public to government unions.
Under the progressive tax scheme, vast sums of money would be sucked out of the productive private sector, laundered through the political elite and deposited into the pay, perks and pensions of the public sector.
But to amend our state constitution to give politicians more power to pick winners and losers, the “divide and conquer” crowd will need to pit Illinoisans against each other.
Why? Because our current fair, flat tax asks us all to share a similar proportional stake in funding our government. Everyone has skin in the game.
Changing that will require convincing voters that they personally stand to gain under a progressive system, where some people are permitted to pay less than their share at the expense of someone else paying more.
But this is where things get dicey for the progressive tax proponents.
If this change were really about lessening the tax burden on the poor (as opposed to making sure that government has more to spend on itself), we would be seeing proposed rate structures that protected broad swaths of middle-class families. We’re not, and that speaks volumes.
Instead, progressive tax hike proponents have been foolish enough to tip their hands and propose tax plans where many working Illinois families would lose out – big time. It’s all about raking in new cash.
Tax hike backers now backing away from these initial plans because they know the backlash to yet another Springfield tax grab has been fast and furious.
Case in point, here is one legislator who says he’s seen progressive tax plans only to say there is no plan:
… In every rate structure that I’ve seen or that I would consider worthy of support, and to be clear again, there isn’t one because the first question here is whether or not we can do it at all.
It took a bit of fumbling, but he eventually got on message. The first rule about the progressive tax hike, apparently, is that we don’t talk about the rates.
Even so, don’t underestimate the power of envy, spite and greed to propel this union-backed effort forward.
Arthur Brooks published a great commentary in the New York Times on the corrosive nature of envy in public discourse and its apparent hold on an increasing number of voters.
Unfortunately, in the wake of the Great Recession, [a national shift toward envy] may well be underway, given the increasing anxiety about income inequality and rising sympathy for income redistribution. According to data from the General Social Survey, the percentage of Americans who feel strongly that “government ought to reduce the income differences between the rich and the poor” is at its highest since the 1970s. In January, 43 percent of Americans told the Pew Research Center that government should do “a lot” to “reduce the gap between the rich and everyone else.”
Why the increasing sympathy for covetous tendencies?
The root cause of increasing envy is a belief that opportunity is in decline. According to a 2007 poll on inequality and civic engagement by the Maxwell School of Citizenship and Public Affairs at Syracuse University, just 30 percent of people who believe that everyone has the opportunity to succeed describe income inequality as “a serious problem.” But among people who feel that “only some” Americans have a shot at success, fully 70 percent say inequality is a major concern.
People who believe that hard work brings success do not begrudge others their prosperity. But if the game looks rigged, envy and a desire for redistribution will follow.
In Illinois, the game certainly is rigged.
If you know the right people in Illinois, you get appointed – at least for a time – to lead a major state agency handling child welfare even after you’ve pleaded guilty to misdemeanor theft for misusing money at a nonprofit.
But if you don’t know the right people, things can look bleak.
The truth is that Illinois is facing an employment collapse. The percentage of the working-age population that is employed fellby 5.6 percentage points, from 65 percent in January 2008 to 59.4 percent in December 2013. Illinois has 380,000 fewer people employed now than before the recession.
Promoters of an unfair income tax increase are hoping to harness the accompanying frustration and ride forward to victory.
We do know this: Under current law, every Illinois family is slated to receive tax relief next year. We want politicians to honor this promise.
So how can we fight back from the moral high ground? Brooks recommends the following:
First and foremost, we must increase mobility for more Americans with a radical opportunity agenda. …
Second, we must recognize that fomenting bitterness over income differences may be powerful politics, but it injures our nation. We need aspirational leaders willing to do the hard work of uniting Americans around an optimistic vision in which anyone can earn his or her success. This will never happen when we vilify the rich or give up on the poor.
If you’d like to learn more about our aspirational approach for an opportunity agenda for Illinois, keep reading. It’s a potent tonic against those who would gut our fair, flat tax and further erode civic comity in Illinois.
Kristina Rasmussen is Executive Vice President of the Illinois Policy Institute