What it boils down to is that the amendment’s failure was a vote of no confidence in Pritzker and in all of Illinois’ elected officials. “Illinois is in a massive budget crisis due to years of a tax system that has protected millionaires and billionaires at the expense of our working families, a crisis that was only made worse by the Coronavirus pandemic,” he said. Check out the website of the Coalition to Stop the Proposed Tax Hike Amendment, the ponderously named PAC that helped defeat the so-called Fair Tax in November. Voters have rejected the Fair Tax proposal to abolish Illinois' flat-rate income tax for one that would take a greater share from wealthier taxpayers. The amendment would have supported allowing the state government to impose a graduated-rate income tax structure that would tax different brackets of income at … Advocates Want Park District to Add Plovers’ Nesting Site to Neighboring Protected Nature Area. The proposal, formally titled the "Allow for Graduated Income Tax Amendment", appeared on the ballot in the November 3, 2020 election in Illinois as a legislatively referred constitutional amendment. Does it even have a path to fill the budget hole it was hoping to fill with the next tax rates? The “Fair Tax” amendment gives total control to the Illinois Legislature to make future changes to the Illinois Tax Code as they see fit. J.B. Pritzker and to his hopes of injecting billions of dollars more revenue into the state budget, Illinois voters rejected a constitutional amendment to overhaul how the state taxes income – a result that portends budget cuts, an overall income tax hike, or a combination of both. Concurrent with the proposed constitutional amendment, the Illinois legislature passed legislation setting a new set of graduated income tax rates t… Voters will decide whether to replace the current flat tax with a graduated state income tax. SPRINGFIELD, Ill. (WTVO) — Voters decided against altering Illinois’ constitution to install graduated income tax rates, a defeat to one of Gov. On 8/26/20, IllinoisPolicy.org said: “With the ‘fair tax’ campaign, lawmakers aim to sell voters a shovel to entrench the status quo by advertising it as a weapon with which to fight against it.” Meanwhile, Pritzker and lawmakers are pushing the message that 97% of taxpayers would see some relief. With around 50% of Illinois precincts reporting, votes in favor of the constitutional tax amendment trail those against it by roughly 42,700, according to the AP. Option 2: Flat Tax Increase Illinois would raise the flat tax rate from 4.95 percent to 5.95 percent –meaning that every family in the state would pay higher taxes. As always, you’re invited to comment at JaneTheActuary.com! “So unless it passes overwhelmingly or unless it doesn’t have enough support that it’s worth waiting for – if it’s in that sort of 50 to 60 range, we’re almost certainly going to have to wait probably two to three weeks no matter what.”. In a blow to Gov. Illinoisans voting on the “Fair Tax” constitutional amendment who have not already studied it probably will be duped into the wrong choice because the ballot is deceitful and incomplete. No. J.B. Pritzker’s most campaigned-for issues. Should voters approve the change, the constitution would give state legislators a wider door to set tax rates, such that the General Assembly could “provide by law for the rate or rates of any tax on or measured by income.”. But billionaire hedge fund operator Ken Griffin went almost dollar-for-dollar with the governor, spending nearly $54 million to combat the change. the comment of Illinois State Treasurer Michael Frerichs in June, listed one abandoned promise after the next, Battle Of The Billionaires In Illinois: The Governor, A Hedge Fund Tycoon, $112 Million And The Income Tax Initiative That Voters Rejected. And refusal to reform pensions, treating the future pension accruals as sacrosanct even as other state needs are crowded out by the spending that requires, is not lost on voters, either. That lag time is in part because Illinois allows two weeks for ballots postmarked on or before Nov. 3 to arrive at local election authorities’ mailboxes. There are two ways for the change to make it into the state’s constitution: The question either needs to win support from 60% of those who voted on the question, or a majority (over 50%) of everyone who cast a ballot (meaning those who cast a ballot in the 2020 election but who skip the constitutional amendment question). Pritzker the first major defeat of his 22-month tenure. Use the calculator below to see how the Fair Tax would impact your family. Pritzker spent $56 million of his personal money to promote moving to what he’d dubbed a “fair tax” as it would allow the state to charge higher rates on those in higher income brackets and lower rates for lower-income filers. It’s the difference between a state where voters trust politicians, and one where they don’t. The majority of Illinois’ neighbors have a flat or nearly-flat tax structure. Michigan, Indiana, and Kentucky all have a flat income tax like Illinois. “Because we won’t know how many people voted in the election but didn’t vote on that ballot question, we’re almost certainly going to have to wait a couple weeks to find out the math on that situation,” said Scott Kennedy of Illinois Election Data. Opponents such as the Illinois Policy Institute warned voters that passing this amendment could lead to the removal of the exemption of retirement income (pensions, 401(k)s, etc. I write about retirement policy from an actuary's perspective. actuarial credential, with 20 years of experience at a major benefits consulting firm, and having blogged as "Jane the Actuary" since 2013, I enjoy reading and writing about retirement issues, including retirement income adequacy, reform proposals and international comparisons. Meanwhile, at least 97% of Illinois … Practicing Poverty Might Help, Why HECM Reverse Mortgage Borrowers Make Mistakes, Biden Plans To Fix Social Security’s Short-Fall In 2034. Currently, Illinois has a flat tax, which means that all income is taxed at the same rate, currently 5% for people and I think 7% for businesses. The amendment would remove the portion of the Revenue Article of the Illinois Constitution that is sometimes referred to as the “flat tax,” that requires all taxes on income to be at the same rate. In a mid-September editorial, the Tribune listed one abandoned promise after the next made by Illinois’ elected officials, from the pledge that tolling would be removed from Illinois’ tollways, to numerous pledges that “just one more” tax hike would fix the state’s finances, over and over again. And Missouri’s progressive tax structure is essentially flat, taxing all income above $8,424 at a rate of 5.4 percent. Governor Pritzker is making good on his promise to protect working families and make our system more fair. Illinois ‘fair tax’ amendment defeated by voters . • The amendment does not hurt small businesses. With 98% of precincts reporting Wednesday morning, the question was trailing 55% to 45% in favor – a hurdle too high to clear, even as outstanding ballots continue to be counted. Illinois taxpayers charged $1.8M for misleading ‘fair tax’ amendment pamphlet Illinois taxpayers charged $1.8M for misleading ‘fair tax’ amendment pamphlet The … By Editor | November 4, 2020 | 1 . With a fair tax, 97% of taxpayers will see some tax relief. Without that revenue, lawmakers will have to make tough choices of seeking alternative methods of bringing in more money, or making cuts to fill that billions-deep budgetary hole. But by the next morning, Fulks was out with an updated statement. The wrong amendment is on the ballot, in other words. And with respect to the GOP, the reality is that the Republican Party in Illinois is in disarray: the state chose Biden, 55% - 43%; Democratic Senator Dick Durbin won his race with an 11 point margin over his Republican challenger; Democrats hold 12 of 18 House seats; and Democrats hold supermajorities in both the state House and state Senate. actuarial credential, with 20 years of experience at a major benefits. Armed with an M.A. Opinions expressed by Forbes Contributors are their own. ), What were the arguments that prevailed against such a powerful headwind as the promises of “free money”? In a set of tweets this afternoon, Pritzker claimed that the only remaining options are to “immediately make billions of dollars in cuts” or “impose a higher flat tax, which falls disproportionately on working and middle-class families.” He then blamed “the millionaires and billionaires” for opposing it and accused them of “deceiving the public about its purpose.”, “Republicans,” he claims, “swore their allegiance to the wealthiest interests in the state and threw middle class families under the bus.”. Illinois is nearly surrounded by flat tax states. The Fair Tax Amendment is on the ballot for Illinois voters to decide in November. Terry Savage – The Fair Tax amendment: VOTE YES VOTE NO? Of the 42 states that have an income tax, 32 and Washington, D.C., have a graduated rate structure, while Illinois is one of nine that impose a flat tax. Pritzker the first major defeat of his 22-month tenure. Under that, millionaires’ income would be taxed at rate of 7.99%, while individuals with incomes of $250,000 or below would see marginal tax rates at or below the current rate of 4.95%. The amendment … Wirepoints has laid out in detail how a constitutional amendment for pension reform can work. Video: Arguments for and against a graduated income tax rate. (AP Photo/Charles Rex Arbogast), EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, 60% Of Workers Dipped Into Retirement Funds During 2020, The Misery Multiplier: Debt Owed To Family And Friends, Eldera: The New Global Intergenerational Mentoring Program, 7 Common And Costly Social Security Mistakes, PPP Potpourri - Trivia For Your CPA And Thee, Why Gen Xers Are Way More Worried About Money Than Boomers, Scared Of Retirement? We won’t store any of your information. Late Tuesday night, chair of the Pritzker-funded Vote Yes for Fairness group Quentin Fulks had signaled the campaign would not yield “until every ballot is counted.”. Voters have rejected the Fair Tax proposal to abolish Illinois' flat-rate income tax for one that would take a greater share from wealthier taxpayers. ILLINOIS — More than 3 million Illinois residents have already voted, but Tuesday is the big day: Election Day 2020. I will leave this state eventually because of absurd property and State Income tax rates, but until our current socialist leadership embraces the fundamental first law of economics, that there are “no free lunches”, we will unfortunately continue to slowly but surely succumb to the quick stand of debt they’ve created. “Ninety-seven percent of Illinois residents, including our essential workers, will get a tax cut. Pritzker and other supporters rejected this and instead claimed that rejecting the amendment would make a tax on retirement income more likely, because the state would have to find other revenue sources.). J.B. Pritzker, unions, progressives and other advocates of the amendment, who say a graduated tax is a “fair tax.”, “You pay the same tax rate as millionaires and billionaires,” a flier paid for by Pritzker’s Vote Yes for Fairness campaign reads. The amendment itself doesn’t set rates, though a law is in place that would kick in come January should the question receive voters’ approval. What is Illinois’ path forward? One one side: Gov. In every other region of the state, the Amendment falls short from a low of 43.8% in Northern Illinois, 35.9% in Southern Illinois, 45.4% in Central Illinois, and 53.4% in the Collar Counties. The outcome was stunning: despite months of ads telling voters that a “yes” vote would ensure that the wealthiest 3% of Illinoisans would “pay their fair share” and the rest of the state would see a tax cut, voters rejected the ‘Fair Tax’ amendment to the state’s constitution, which would have stricken from the constitution the requirement that the state’s income tax be levied as a flat percentage of income across all income levels. “Illinois voters sent a message that with an $8 billion deficit and two massive tax hikes in the last 10 years, we cannot trust Springfield politicians with another tax hike,” said Lissa Druss, spokeswoman for the Griffin-backed Coalition to Stop the Proposed Tax Hike Amendment. Fair Tax opponents must answer for whatever comes next.”. In order for the amendment to be ratified, 60% of people voting on the measure must approve it, or a simple majority — 50% plus one — including voters who skipped the questions on the ballot. Armed with an M.A. The question before voters in the general election is whether the state should toss the constitutional requirement that “a tax on or measured by income shall be at a non-graduated rate” in favor of a structure that would allow for those in different tax brackets to be taxed at different rates. The outcome was stunning: despite months of ads telling voters that a “yes” vote would ensure that the wealthiest 3% of Illinoisans would “pay their fair … The fate of Illinois’ constitutionally mandated flat tax lies in the hand of voters, who will decide on Nov. 3, 2020 whether or not to adopt the Proposed Amendment to the 1970 Illinois Constitution — also known as the “fair tax” amendment or the “Illinois Allow for Graduated Income Tax Amendment.” Illinois Voters Reject ‘Fair Tax’ Amendment Amanda Vinicky | November 4, 2020 10:41 am In a blow to Gov. And, of course, regular readers will recall that just last week, I learned that Pritzker’s promise to boost the state’s pension funding by asset transfers, likewise quietly failed. 11-03. Pritzker’s easy blaming of Republicans and millionaires and billionaires, rather than recognizing that Illinoisans made the only rational choice in a state with such a legacy of mismanagement and without any willingness for reform, certainly indicates that the state has a long way to go. Illinois Fair Tax Amendment. How And Why To Create A Compilation Of Your 2020 Trusts Now! And all Illinois voters are seeing a constitutional amendment on their ballot asking them to approve of the so-called Illinois "fair tax" by repealing the state's constitutional requirement that the state income tax is a flat tax across income levels. A proposed income tax amendment was shot down by voters in Illinois Tuesday. Illinois’ wealthiest residents stood to get hit hardest in their pocketbooks, had the measure been approved. “This amendment would make Illinois’ tax system fair” The amendment does nothing to lower Illinois’ second-highest in the nation property taxes and … To be sure, there was an element of Billionaire v. Billionaire in the campaigning for and against the amendment (see “Battle Of The Billionaires In Illinois: The Governor, A Hedge Fund Tycoon, $112 Million And The Income Tax Initiative That Voters Rejected”), but there was neither hoodwinking nor deception going on. in medieval history and the F.S.A. The General Assembly passed a measure last May to enact the graduated tax, if voters approve a constitutional amendment on Nov. 3. The constitutional amendment itself merely removed a constitutional mandate that all personal income be taxed at a flat rate. A woman walks past a pro Fair Tax yard sign near a polling place on Election Day, Tuesday, Nov. 3, ... [+] 2020, in Chicago. But a 2019 law was in place, and would have taken effect in January should the constitutional amendment have been approved. After that, income up to $100,000 is taxed at 4.9 percent. The Illinois Fair Tax was a proposed amendment to the Illinois state constitution that would have changed the state income tax system from a flat tax to a graduated income tax. It sounds like an astronomical sum: $100 million spent by opposing campaigns to try to influence Illinois voters about whether the state should amend the constitution to allow income to be taxed at a graduate rate. The proposed amendment grants the State authority to impose higher income tax rates on higher income levels, which is how the federal government and a majority of other states do it. Yes, I'm a nerd, and an actuary to boot. Option 3: Fair Income Tax Illinois would change its system so the wealthy pay more, like in 33 other The Fair Tax Amendment would have introduced a progressive income tax in the state, gradually increasing tax rates for those who make $250,000 and above. The Chicago Tribune reminded its readers repeatedly of the state’s failed promises and indifference to reform — everything from the failure to reform pensions, to failures to reform property taxes, rejection of redistricting reform, rejection of consolidation of local governments. Under the proposed amendment, the tax rate drops to 4.75 percent for the first $10,000 of a taxpayer’s income. The outcome of Tuesday's Nov. 3, vote handed Illinois Gov. “We should not allow politicians to keep raising taxes until they get their spending under control.”. ), what were the arguments that prevailed against such a powerful headwind as promises... Control. ” can work for pension reform can work stood to get all our. 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