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Illinois voters likely reject progressive income tax

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A proposal to bring a graduated income tax to Illinois was heading for defeat Tuesday although supporters of the idea would not concede.

With nearly 88% of precincts reporting, the amendment was losing with 55% voting "no" and 45% voting "yes." The "no" votes outnumbered the "yes" by nearly 458,000.

Opponents of the amendment issued statements Tuesday night claimed victory. The Vote No on the Progressive Tax Coalition thanked voters "for preserving jobs and defeating the Springfield politicians' tax increase."

Illinois Chamber of Commerce President Todd Maisch said the issue came down to trust.

"It is clear that the majority of the electorate doesn't trust their state government with their precious tax dollars<" he said. "Illinois politicians arrogantly demanded a blank check from Illinois taxpayers and the voters rejected their plans."

However, Vote Yes for Fairness, which supported the amendment, refused to concede.

"We are encouraged by the Illinoisans who cast their ballots in support of the Fair Tax despite the onslaught of misinformation and lies from those who were desperate to defeat the amendment," the organization said in a statement. ""Until every ballot is counted, we will stand with the Illinoisans who cast a ballot by mail, early and in-person today to ensure their voices are heard."

To be become part of the state Constitution, the amendment must be approved by 60% of the people voting on the amendment or get over 50% of the total votes cast in the election. Neither possibility looks likely.

If the amendment fails, it would be a major setback for Gov. JB Pritzker who has made approval of the amendment a cornerstone of his administration. The amendment was a major part of Pritzker's agenda as he campaigned for governor. He pushed to have lawmakers approve placing it on the ballot a full year before the election.

Pritzker's office did not respond to a request for comment Tuesday night. During a coronavirus briefing earlier in the day, he repeated that; a tax increase on all taxpayers — which he said would be regressive under the current system — will be necessary along with deep budget cuts if the amendment failed.

Pritzker also put significant amounts of his own fortune behind the effort in a campaign that was described as a battle of billionaires. Illinois' richest man, Ken Griffin, contributed significant amounts of his own money to the campaign to defeat the amendment.

Voters were asked if the state should change from a flat tax system to one where different rates are charged at different income levels. The higher a person's income, the higher the tax rate that person would pay. It is the system used by the federal government and most of the states that have a state income tax.

Lawmakers approved tax rates that will be applied if the amendment is approved. Proponents said those rates would result in 97% of taxpayers paying the same or less than they do now. Only those making more than $250,000 would see a tax increase.

The new tax rates are estimated to raise an additional $3.4 billion to $3.5 billion for the state. Proponents said that it is revenue badly needed for the state to cope with its ongoing financial problems, including pension debt and a large bill backlog.

Proponents called the graduated income tax the "Fair Tax" because they said it would force millionaires and billionaires to pay their "fair share" of state taxes.

Opponents largely ignored that argument and played to voter cynicism about state government. They conducted an expansive campaign in which they said graduated rates will make it easier for lawmakers to raise income taxes on all income levels in the future, particularly the middle class, despite a study that showed lawmakers reluctant to raise income taxes regardless of the system their states used.

Opponents also raised the specter of Illinois beginning to tax retirement income which is currently exempt from state income taxes. Ads said the amendment would give lawmakers "new power" to tax retirement income even though they already have that power.

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