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Illinois governor visits Quad Cities, touts progressive tax plan

During a visit to the Quad Cities, Governor J.B. Pritzker defended his graduated tax plan against criticism that it would drive business out of the state, sayin...
J.B. Pritzker

MOLINE, Illinois -- Illinois Governor J.B. Pritzer visited the Quad Cities Friday, after unveiling a sweeping tax plan he says would raise $3.4 billion in revenues while raising taxes for the richest people in the State.

During a tour of Moline High School, he defended his graduated tax plan against criticism that it would drive businesses out of the state, saying it would boost business confidence by stabilizing state finances.

"Businesses  want to know what the runway looks like. They want to know if our state is stable or not," he said.

"Because we are addressing the real issues, addressing the pension issue, addressing the fiscal challenge, businesses will want to not only stay here and invest here, and businesses outside of Illinois will want to move here," he argued.

State Representative Mike Halpin, a Democrat, says he generally supports a graduated tax plan but would have to look at the details of the proposal: "I'm definitely supportive of putting a constitutional amendment on the ballot for a graduated tax. I want to look more closely at the proposal to make sure it helps the people in the Quad Cities first."

He says some Iowans might be looking to Illinois for more favorable rates.

"Looking at the rates, at least the way they've been proposed, most Iowa taxpayers would actually benefit from the Illinois tax structure. You know the highest income tax rate over in Iowa is over eight percent, and that kicks in at around $70-75,000. So if you're making over that amount of income in Iowa, even under the governor's plan, you'd get a tax cut by moving across the river to Illinois," he said.

Illinois' income tax rate is currently a flat 4.95 percent. Under the governor's plan, low earners would pay 4.75 percent, while those making more than a million would be taxed at 7.95 percent.

"It's actually quite a favorable comparison," Halpin told News 8.

But Republican State Representative Tony McCombie, sees it the other way around, calling the plan a $3.4 billion tax hike on Illinois families and businesses.

"Sales taxes and property taxes are proven to be regressive compared to our income tax structure, so why are we not willing look at how we tax goods, services and our properties? The Governor should be looking at our overall tax burden (sales, income, use, property, etc.) and make changes that will bring growth and stability to Illinois," she said in a statement to News 8.

"To put things into prospective... I will personally save $65 dollars on Pritzker's tax plan, however due to the minimum wage increase at the same time, my business expenses will increase at least $5000 a year! Under Pritzker's graduated plan the average household will pay $2,974 in income taxes, however with a flat tax in 2016, they would have paid $2,287, and in 2010  they would have paid $1,830. To call this a 'tax decrease for 97 percent of Illinoisans' is disingenuous to the people who continually are asked to give more and more, while receiving less in return," she added.

Voters would have to approve a constitutional amendment to change the flat-rate mandate in Illinois. Governor Pritzker says he's confident he has enough support in the legislature as well as at the voting booth. The earliest that could happen would be in the 2020 election.