Illinois wants to replace flat tax by taxing residents who make over $250K

Channel: Fox Business
Published: 05/29/2019 10:39 PM

Illinois Policy Institute CEO John Tillman on why Illinois voters shouldn’t replace the flat tax with the graduated income tax. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street. Headquartere...

[ music ] illinois is searching desperately for a way to dig itself out of a financial hole, huge one. It'S now turning to its remaining residents for help the illinois house putting a measure on its 2020 ballot to replace the state's flat tax with a graduated income tax or a progressive tax raising taxes on people making over $ 250,000 a year. John tillman is the ceo. The nonpartisan illinois pol ...
cy and says, john, you are urging residents to vote no on this new tax overhaul. Why? Because it won't solve the problem, they claim they're only going to raise taxes on the top 3 percent, but they really have 97 percent, especially the middle class. In their crosshairs they've madeso many promises for more spending. The proposed revenues from this tax hike of 3. 4 billion dollars won't even come close to filling the budget gap that governor pritzker and the democrats have created here. So it won't work. It won't solve the problem. John routes, heather sumeragi, i read your statement saying that one of the best indicators is actually the census report showing that illinois is losing population at a rate of one. Every four point: six minutes, which is just amazing to me: it's the only state to lose population.

Over the past five years, consistent consistently, why are people leaving people are leaving because they they've lost faith in the political leadership of this state? Whenyou, look at the problems we face. Out-Of-Control spending and spending is growing faster than revenues, and the political class thinks the way to fix that is to take more money from people, and people are getting up and moving elsewhere, because they have lower tax burdens when they move next door to indiana or iowa Or kentucky or wisconsin, it's amazing that wisconsin has a lower tax burden than we do. People are voting with their feet. It'S the best example of why people have lost faith in this political leadership and why i believe we're actually going to see that measure defeated in 2020, which i think is going to be the beginning of a revolution in illinoisis that people begin to reassert control of Their government, all they want - is more revenue and they're going to go after the middle class and even the working class and poor netflix uber fees. Doubling the gas tax doubling the license tax, they have 19 taxes, all in all six point: nine billion dollars, there's never enough, it's time to tell them to stop john john, it's scott martin, john and scott martin. I town hey. Judging from your background by the way, you're not in chicago, because that doesn't look like chicago anymore, at least from your background, but i applaud wherever you know, i mean i mean i guess, scott i'm in beautiful arizona and the bestpart is. I heard governor ducey from arizona talking about lowering taxes talking about reducing that talking about reducing regulation. It was breathtaking i'm on my way. So here's a deal, john. Let'S talk a little bit. You mentioned how everybody's going to get hit with this new tax plan.

How about this dirty little word: that's in the proposal called recapture on folks making over a million dollars, and so can you talk a little bit about what that's gon na do and how it kicks up a bunch extra taxes to those folks as well, who create All the businesses and so forth. This is just how insane governor pritzker's idea is. If you make 999 thousand dollars youpay a rate of, i think it's six point: nine five percent. I might be slightly off on that number. But if you crushed over a 1 million dollars, then not only do you pay seven point nine five percent on every dollar over they go back and recapture that tax on the first million dollars so they're creating an incentive for people to stop earning once they get To a million dollars now your viewers might say well who has any sympathy for those folks? Those are the folks that are taking that money and buying new machinery. New training for their workers, so they compete with, can compete with chinese and other overseas competitors. That money is veryinvested instead, the state's going to take it away. John, you may know that if you take the word grease and translate it into english, it comes out illinois, the worst worst financial state in the union. How do you break steve? I appreciate that. How do you, how do you break the grip of speaker madigan, who controls the house and controls the legislature and mayor's made very clear over the years governor's? Don'T matter, this guy runs the state. How do you break that two stranglehold and how did that happen in a state like illinois, the land of lincoln this one guy controls that no matter what the electors say, he decides what happens. Well, speaker, madiganhas elected out of one district in the city of chicago, but it's the democrat majority was that make him speaker and have made him speaker for all, but two years since 1983 he's been in office since 1970.

There'S no question: he is the senior partner in the partner ship with governor pritzker, and the two of them together are have their sights on every single taxpayer, because what they want to do is continue to fund the out-of-control spending. The most amazing thing about this steve is they're not talking about pension reform or spending, reform or health care reform or the other things that need to be done. The way you break the grip of speaker madiganis, the first step will be in 2020 for people to be well informed on this issue and vote against it. That is my personal opinion. The institute itself cannot take a position on it, but that is my personal view. On that and that'll be the beginning of the end for speaker, madigan and i will say we don't think he's immortal he's been around a long time, but at some point we think he might want to go to florida to john, why it's so much money in Illinois, hopefully not yeah, that's a fair point he's making a lot of money here. That'S a good! That'S a good point! John. I want to simplify and bring itback to the argument flat tax versus progressive tax. You have those that say progressive unfair because it treats the rich and the poor differently, the rich, having to bear most of the burden. But then what do you say to those that argue? The flat tax overlooks the fact that the poor people in society have to pay a larger portion of their salary and their income to basic needs survival. You'Re shaking your head and see the shaking your side right now. I'D say.

However, there is arguments for both sides, so i'd like to hear yours when it comes to the flat tax and how that doesn't really help the lower income population, then you know there'sonly. One argument: that's actually correct, even though people do argue both sides, and the truth is that the poor and income inequality suffer every bit as much or more when there are progressive taxes. The most important thing is to help poor people rise and you rise through economic opportunity. A flat tax creates a robust economy, robust entry-level jobs, middle class jobs, and it gives people the opportunity to rise when you put in the progressive tax. That slows all that down and it reduces opportunities for the poor. That is the number one reason. The flat tax always creates more prosperity. It'S why states like florida, arizona, i'm sorry, florida, texas and tennessee and other states thatdon't? Have any income tax have some of the highest wages and highest wage growth for the poor? That is why a flat tax helps everyone, but especially the poor, and also the flat tax that many of us proposed give very generous exemptions to people family making. Fifty two thousand eight hundred dollars a year, zero dollars in federal income tax and then only seventeen cents, above that the real crusher for taxes on lower-income people is the payroll tax. That'S where you need the real reform and a good flat tax will help but create an environment where you can get that kind of reform, payroll fix its everybody or one. That'S a great point. The other partof this that governor pritzker is hiding behind is he's proposed.

Three point: five billion dollars in tax hikes that are regressive, a nature that do actually harm the poor, a plastic bag tax, higher license fees, gaming, taxes, marijuana john: can you all google john quickly hit on the corporate tax and a very quickly generally? Don'T nobody? They raise the rate and then they give it. Then they give tax breaks to keep companies from leaving the state crazy bottom line is we're gon na have, i believe, it's gon na be the second highest corporate tax rate in the country. If this passes and make us even less competitive, that's why it would be disaster and that's why thepeople of illinois are gon na, say no in 2020.

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