The Fair Tax amendment:
Terry Savage – The Fair Tax amendment: VOTE YES VOTE NO?
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. But, others say that relief amounts to $6 for low-income Illinoisans out of a nearly $1,800 state and local tax burden.
My question:
We’ve heard how the tax will only be applied to those making over $250,000.00 and that the rest of us will be spared. But, in Connecticut, the only other state that has implemented such a progressive “Fair Tax,” in the past 30 years, things have not worked out so well for the average taxpayer, as middle class taxes have gone up 13%, since they switched from a flat rate.
Depending on who is talking, we’ve also heard how this may hurt or may favor retirees, farmers and small businesses. Who are we supposed to believe?
Terry Says
I think you’ve answered your own question — and thanks for all the background info for my Illinois readers.
Cutting taxes vs raising taxes has a long history and we can see the results empirically.
This is not a political issue; it’s a FINANCIAL issue! And I’m going to respond to your question with a financial answer — not a political one.
For example, John F. Kennedy was notable for cutting tax rates — long before Ronald Reagan.
Kennedy cut the top tax rate from 90% to 70%, and also cut the corporate tax rate. The result was known as the “Kennedy Boom”! (In case younger readers don’t remember, Kennedy was a DEMOCRAT!) He famously said: “Perversely, the way to increase tax revenues is to cut tax rates.
It’s one thing to deal with NATIONAL tax rates. Only the very wealthy can vote with their feet and are willing to do so when tax rates become too high. Think of the Beatles leaving England, or tennis starts like Bjorn Borg leaving Sweden, or even Roger Federer who is domiciled in Dubai!
But when it comes to STATE tax rates, ordinary middle income people DO move to another state — and very easily! Already there is a significant outflow of Illinois residents fed up with high property taxes and other issues. And now that state and local taxes have limited deductions, the burden of state taxes becomes even greater — and an even greater incentive to move.
Ask yourself why Tennessee, Florida,and Texas are booming — and they have NO state income tax. I’m not here to argue with you — just stating the facts. While it seems appealing and “fair” to tax the wealthy, they are the very ones who can easily move — leaving an even greater burden on those who can least afford it.
Time will tell — and I think it will tell a sad story within a few years if this “fair tax” passes.
