State Policy Network
Illinois Policy Institute saves millions of Illinois families from devastating “fair tax”

One person leaves Illinois every ten minutes. While we can’t pinpoint exactly what’s causing this mass exodus, the state’s high taxes certainly aren’t convincing people to stay. Illinois residents pay the most of all 50 states in state and local taxes. And on Election Day 2020, through a proposed constitutional amendment, lawmakers asked residents to pay even more. Thanks to the Illinois Policy Institute, voters had the information they needed to reject the progressive income tax and the higher taxes that would come along with it.

Touted the “fair tax,” the Graduated Income Tax Amendment would replace Illinois’ flat income tax with a progressive income tax. Were it to pass, it would give Illinois lawmakers the power to divide taxpayers into smaller groups and tax as they saw fit.

What is a progressive income tax?

States either have a flat income tax or a progressive income tax. If you live in a state with a flat tax, your state will tax everyone’s income at the same rate. If you’re in a progressive income tax state, people with higher incomes are taxed more than people with lower incomes. Illinois has a flat tax, and it’s protected by the state constitution. For years, Illinois lawmakers have been trying to move to a progressive income tax, and it seemed like 2020 was their year to make it happen. In March, 65 percent of Illinois voters said they supported a graduated income tax.

Illinois politicians mislead the public on the implications of a progressive tax

That support may have been the result of misleading rhetoric from Springfield. The governor, who spent $58 million of his own money to garner support for the amendment, claimed the tax would benefit the state. He assured voters it would only raise taxes on the wealthy. This was about the wealthy paying their fair share. As the governor noted: “It is not fair that I pay the same tax rate as a teacher, a childcare worker, a police officer, or a nurse.”

Fairness? Maybe. Or it was a temporary fix to the state’s financial woes. Illinois has the lowest credit rating in the country. It’s also sitting on $261 billion in pension debt. According to the governor, more taxes are the answer to the state’s financial mess.

Illinois Policy Institute launches campaign to make sure Illinoisans know the true effects of the progressive income tax

What voters were not hearing was that, in reality, a progressive income tax would cost families and business owners who didn’t need yet another economic burden. Illinois Policy launched a campaign to get this information in front of voters and give them an accurate picture of how the tax would affect their lives. Illinois Policy also pointed out Illinois can balance the budget and fund services without higher taxes. Week after week, Illinois Policy’s research team found interesting ways to present new findings on the effects of a progressive income tax. Illinois Policy pointed out the middle class would be among the hardest hit. A typical Illinois family would likely have to pay $244 more in state and local taxes. Illinois Policy also revealed the tax would allow for double taxation and devastate businesses already struggling from the coronavirus and economic lockdowns. More than 100,000 small businesses would be hit with tax hikes of up to 47 percent.

Illinois Policy also found a progressive income tax would open the door to taxing retirement income. With the overwhelming majority of Illinoisans against a retirement tax, Illinois Policy knew this finding in particular would resonate with voters. Illinois Policy explained the “fair tax” would take $2,482 in taxes from the average retiree each year.

Through blog posts, social media outreach, and an extensive media campaign, Illinois Policy got this research in front of millions of Illinoisans.

As the election approached, Illinois Policy discovered biased language to describe the amendment on the ballot. The summary on the ballot stated, among other misleading claims, the amendment would only allow lawmakers to tax higher income groups. But, as Illinois Policy pointed out, that simply is not true. Although lawmakers wouldn’t tax other income groups now, there’s no guarantee that wouldn’t happen in the future. On October 5, 2020, Illinois Policy filed a lawsuit to challenge this misleading language.

Key to Illinois Policy’s success? A developed and engaged owned audience

An important piece of Illinois Policy’s campaign was communicating with their owned audience. An owned audience is a marketing term for people who have subscribed to an organization’s brand. Over the last two years, Illinois Policy has worked to build an owned audience of two million Illinoisans. That’s one out of every seven people in Illinois, and the organization can activate this audience at any time for issue campaigns. With this channel, Illinois Policy was able to communicate directly with a significant percentage of Illinoisans about the devastating consequences of the “fair tax.”

Even in a deep blue state with biased ballot language and misleading rhetoric from the amendment’s supporters, voters rejected the tax. Support for the tax dropped from 65 percent in March to 45 percent in November. In a post-election survey, Illinois Policy discovered 22 percent of voters rejected the tax because it could potentially tax retirement income—a key message of Illinois Policy’s campaign. Illinois Policy President Matt Paprocki added: “If you communicate directly with people, and your information is clear and easy to understand, the issues we work on are popular among the general public. There is a huge opportunity for the Network to build on this.”

Illinois rejects the
Photo credit: Illinois Policy Institute
Categories: State News
Policy Issues: Taxes
States: Illinois
Organization: State Policy Network