Editorial: 

The threat of a graduated income tax

Editorial Board   Chicago Tribune

Matt Brady of Lemont isn’t an exodus statistic — yet. He represents a worrisome unknown. He is planning his escape from Illinois, a category that doesn’t show up on a chart.

Chief revenue officer for a financial services company, Brady knows math. It’s chasing him out of Illinois, but not for two more years, when his youngest son finishes high school. Brady knows the $130 billion in unfunded pension liabilities Illinois political leaders racked up. He knows the billion-dollar operating deficits of the state budget. He knows the state’s backlog of unpaid bills is teetering around $7 billion.

Here’s a number he also knows: 4.95 percent, the state’s personal income tax rate. Brady is worried the rate will climb for his household if Democratic gubernatorial nominee J.B. Pritzker is elected in November. Pritzker is campaigning on instituting a graduated state income tax. It would punish many Illinoisans already enduring the 32 percent hike in the income tax rate that lawmakers approved in July.

“I don’t mind paying my fair share if these knuckleheads knew how to properly spend the money,” Brady says. “We knew our pension plan was insane 20 years ago. Why haven’t we changed it? I’ll pay my taxes, but I don’t have to support stupid policy.”

The state, he says, should have implemented a 401(k)-style plan for new workers years ago. “At what point do citizens say enough is enough? I feel like we’re going to be Detroit. So we’re gone. I’m done with the corruption,” he says. Brady and his wife bought property in Florida and likely will move there.

Illinois is one of eight states with a flat income tax rate. Pritzker hasn’t disclosed his proposed income tax brackets, but the conversation has some Illinoisans looking at real estate websites.

The most recent Illinois Department of Revenue numbers for tax year 2016 show 1,111,515 filers reported adjusted gross incomes of $100,000 or more, for a total of $262.8 billion.

Note to everyone else: These people pay a lot in Illinois taxes. Rank-and-file taxpayers should be trying to keep them rather than sending them to Texas, Nevada, Florida and other states that don’t tax income. High-income earners help pay for the state services that the General Assembly loves to approve but not fund.

Brady says he doesn’t want his family strapped with Illinois debt. “I don’t know if you can change it,” he says. “I’m frustrated. I grew up in Midlothian and you could always see the city skyline. It means a lot to me. It means home.”

For now.