Trust politicians with broader taxing authority? What could go wrong?
Voters in Illinois on Nov. 3 will weigh in on an important proposed change to the state Constitution, involving how income is taxed.
Those urging a yes vote argue millionaires and billionaires and corporations have not been paying their fair share because of Illinois’ flat tax. Calling their proposal a “fair tax,” proponents of the change want to enable the government to impose a graduated tax, the theory of which is to have a lower rate for lower incomes and a higher rate for higher incomes. They say no one earning below $250,000 will pay more than they already do to the government.
Those supporting a no vote say, in essence, you can’t trust the government. If allowed to adjust tax rates, the argument goes, expect politicians to raise rates routinely and regularly and forget all about the promise of applying higher levies only to the rich.
Let’s inject one point: Just because Illinois has a flat tax doesn’t mean it never goes up. The tax rate has been raised before, and those with a good memory will recall politicians pledging the increase was only temporary. Not exactly.
There’s much to be said for a graduated tax, with people who can afford to pay a higher rate doing so. There is something unseemly about a multimillionaire company owner locked in by law to pay the same personal income tax rate as the firm’s janitor.
On the other hand, putting the words “trust” and “politicians” in the same sentence is inevitably a mistake. Hand the keys to the tax elevator over to the political class and it’s a sure bet the only way it moves is up.
There’s also truth in the notion that a flat tax assures everybody has skin in the game. Those who earn more pay more, and those who make less pay less, but everybody pays something.
There’s no mystery why Illinois wants the change. The state has been mismanaged and is buried in a deep financial hole. This is not a revenue-neutral plan. It’s intended to take more money from the private sector and give it to the public sector to do with as the politicians wish.
Should people trust them?
Here’s what we trust them to do: Spend any new money they get, not to reduce debt, but to pander for political advantage.