Progressive Income Tax

Betting Big on a Progressive Income Tax

Margarite Wypychowski

BY Margarite Wypychowski

April 25, 2019

Public Affairs

The clock is ticking. As Illinois’ legislative session heads into its final six weeks, Governor Pritzker’s big priority is passing legislation to get a progressive income tax on the ballot in 2020. Pritzker has staked a lot of political capital behind this and believes the revenue generated by the tax is a big part of digging the state out of its giant fiscal hole.

In a nutshell, the proposed progressive tax, or fair tax as the Governor and his team have branded it, will replace Illinois’ flat income tax rate of 4.95 percent for all taxpayers with a system that taxes higher incomes at higher rates, and lower incomes at lower rates.

Ad campaigns for and against the tax have started to air on TV and on social media to help give legislators cover for their votes. But how effective how are they?

Let’s first take a look at a couple of ads from Think Big Illinois, the group advocating for the fair tax. Here’s ‘Hole’ and ‘Affect You’.

What’s effective about both these ads is that they are short (15-seconds!) and to-the-point. And the message is clear: the fair tax will help middle-class families, while only impacting a small group of wealthy residents. Also, when you’re trying to garner support around a potentially complicated issue like tax policy, it’s helpful to hammer home one compelling point in all your materials. In this case, it’s the stat that more than 97% of Illinois residents won’t see a tax increase.

These ads are light on details but at this point, that’s ok since they are trying to build support around the concept. And their concept of wealthy people paying more in income taxes is a hard one to argue against.

Now, let’s look at an ad titled ‘Illinois, You’re Rich released by the Illinois Policy Institute against the new tax system.

This ad’s main point is that the new ‘tax on the rich’ will result in higher taxes for everyone. To get this point across, it juxtaposes the image of wealthy people laughing in a convertible next to a working-class woman in a dinged-up car. While the ad may get your attention, I feel its over-the-top style (and Lifestyles of the Rich and Famous narration) lessens its credibility. And when people hear the overall message of ‘you’re rich’ on its own, it may be confusing; i.e. is the new tax actually going to make people rich?

Finally, it will be interesting what effect (if any) federal tax changes will have on public support for a new tax system here in Illinois. With media stories showing many middle-class families seeing lower income tax return checks this year, will that inspire more people to support state-level reform? Or just treat another tax reform proposal with skepticism?

If the fair tax bill passes this session, voters will then be asked to approve a constitutional amendment replacing Illinois’ current tax system next November. These ads will be a drop in the bucket compared to the media saturation we’ll likely see from both sides then.

VIEW MAIN BLOG
Margarite Wypychowski

BY Margarite Wypychowski

April 25, 2019

Public Affairs