‘Millionaire tax’ clears House panel
By Mark Fitton
Illinois News Network
SPRINGFIELD — House Speaker Michael Madigan’s “millionaire tax” passed out of committee Wednesday.
The Chicago Democrat proposes a 3-percent surcharge on income greater than $1 million, hence the nickname.
“Many people do think it is fair for people who have more to pay more in terms of taxes (for the state) to do a better job of funding public education,” said Rep. Barbara Flynn Currie, who presented the bill Wednesday.
Opponents say such a tax would cause an out-migration of wealth and discourage job creation, especially in the small-business sector.
Currie said the information she’s seen from states that have imposed such a tax — including Maryland, New Jersey, Connecticut, Hawaii and Alaska — does not indicate it will discourage millionaire residency or or trigger a stampede of wealth from the state.
Rather, she said, people put far more weight on factors such as family, schools, strong public services and climate.
In broad terms, unions and education advocacy groups back the measure; business interests oppose it.
Greg Baise of the Illinois Manufacturers Association testified Wednesday, saying the surcharge would “just be another nail in the coffin for job creators to want to stay in this state.”
William McNary, co-director of Citizens Action Illinois, spoke in favor of the bill.
“Indeed, this proposal would allow us to tax those who benefited the most when the income tax was recently rolled back from 5 percent to to 3.75” percent, he said.
Travis H. Brown, an author who writes on wealth migration, argues tax rates do influence residency choices and can contribute to capital flight.
“A state income tax applied at any income level is a tax on work,” he said in a Wednesday interview. “If you tax something, you can expect to see less of it.”
The proposed surcharge would require a constitutional amendment, which means it needs a three-fifths vote in each chamber of the Legislature to appear on the 2016 general election ballot.
In the election, it would need approval by three-fifths of those voting on the question or a majority of those voting in the election.
Proponents say the measure belongs on the general election ballot, especially as nearly 64 percent of those voting on the matter in a 2014 advisory referendum favored it.
Advocates claim the measure would raise about $1 billion annually. That money would be put toward elementary and secondary education.
If approved, the surcharge would not begin bringing in revenue for the state until 2017.