|Revenue & Finance Committee Chairman Mike Zalewski, D-Riverside, explained he was not in violation of the rules because the bill was posted for the May 20 committee hearing – though it wasn’t heard or voted upon – and he never technically adjourned that meeting, meaning they remained in a days-long recess. This allowed the committee to call a surprise vote on the rates bill.
“We have not adjourned this committee,” Zalewski told McDermed. “If you want to go back and listen to the tapes … and if any moment I’ve said ‘adjourn’ then we have a different story.”
As a result, Illinoisans had no avenue to voice official opposition or support throughout the week.
“We as a caucus were not told, our staff was not told, that this was going to be heard this morning,” McDermed said on the House floor.
“What does this say about your confidence in this policy – in this measure – when the only way that you can get it through to the floor of this House is by engaging in legislative tricks and shout down people on the other side?”
Beyond McDermed and other Republicans, many Democrats in the House were also unaware the rates had been called to a vote, much less passed to the House floor.
In addition to the surprise calling of the bill, three Democratic members of the committee who have either voiced opposition or withheld vocal support for the progressive income tax – state Reps. Sam Yingling, D-Round Lake Beach; Jonathan Carroll, D-Northbrook; and Stephanie Kifowit, D-Aurora — were substituted out of committee and replaced with “yes” votes.
Illinoisans concerned that the progressive income tax would serve as a Trojan Horse to middle-class tax hikes of up to $3,500 may have more cause for worry, after comments from freshman state Rep. Yehiel Kalish, D-Chicago in the committee hearing. He thought the proposed income tax rates were too low. “I want to be on record saying that I don’t think we go high enough,” he said.
The progressive income tax constitutional amendment allowing for these new rates, SJRCA 1, has already passed the Senate and on May 20 passed the House Committee on Revenue & Finance. It now awaits a floor vote in the House. If the amendment gets 71 “yes” votes, it will be on the ballot for Illinois voters to consider in the 2020 election. Should voters approve the amendment at the ballot box, new, progressive income tax rates would be allowed to go into effect.
The amendment would eliminate the state’s flat income tax protection, empower lawmakers to pass additional income taxes on the same dollar earned, and allow for the nation’s highest tax on business income.
Though the rates plan approved by the House differs in some ways from Pritzker’s original proposal, the overall effect would be the same: a tax hike that would hurt small businesses, drag down economic growth, fail to close the budget deficit or pensions and serve as a bridge to higher taxes for the middle class.
What’s in this progressive income tax proposal?
While Gov. J.B. Pritzker has been campaigning for months on his own proposal, the rates and brackets passed out of the Senate and the House Committee on Revenue & Finance are different from the governor’s. Pritzker’s proposal levied a 7.95% flat rate on the highest income bracket, while the plan currently moving in the General Assembly features a 7.99% flat rate on the highest income bracket. That top bracket also now kicks in at a lower level for single filers: $750,000 instead of $1 million.
The state’s corporate income tax rate would also be bumped up to 7.99% from 7%. Pritzker’s plan hiked the corporate income tax to 7.95%. This does not include the Personal Property Replacement Tax of 1.5% on S corporations and 2.5% on C corporations.