Lawmakers debate Pritzker's progressive income tax plan in Illinois

Illinois lawmakers debated Monday the merits of Gov. JB Pritzker's proposal to implement a progressive income tax plan that would revamp the state's tax code.

He said there's three option to solve the state's budget crisis -- lawmakers can slash the entire budget by 15 percent, raise taxes on everyone or institute a progressive income tax.

The governor's plan, which includes a constitutional amendment, certainly has plenty of critics. Pritzker unveiled his plan, also called a graduated income tax, a week ago. The plan promises that 97 percent of taxpayers would not pay more. Only those making over $250,000 a year would be impacted.

"It's just fundamentally unfair for somebody who makes $3,000 should pay the same rate of tax as somebody who makes $3 million," said state Sen. Elgie Sims (D-Chicago).

Some Republicans want the discussion to be about more than just tax hikes, but also about spending cuts and a constitutional amendment to change pension payouts.

"What I have an issue with is pension that are increasing at 3 % compounded yearly, when inflation's only 1.8 %. So we're increasing our liability every year, we need a constitutional amendment, we need to address the spending side," said state Rep. David McSweeney (R-Cary).

They also have concerns about the wealthy leaving Illinois if voters eventually approve changing the constitution to allow a graduate income tax, which could happen no sooner than 2020.

"I'm really glad you brought this up because this is one of the biggest bogeyman of this whole entire debate, that when you raise taxes on wealthy folks they leave," said state Rep. Will Guzzardi (D-Chicago).

Democrats contend that's not the case, pointing to Minnesota as proof.

But the proposed tax plan points out the divide between Chicago and downstate Illinois.

"I sincerely believe that right now Illinois, especially downstate Illinois, if you're not feeling that pain up here Representative Guzzardi, we are at a tipping point where people with wealth are prepared to leave our state and have been doing it," said state Sen. Chuck Weaver (R-Peoria).

Democrats see the graduated income tax as a way to address Illinois' budget woes, and eventually lower property taxes. But some republicans are sounding the alarm that eventually the middle class, those making over $75,000 a year will also see their taxes go up.