Madigan's 'Millionaire's Tax' Passes Legislative Hurdle
A tax on millionaires is advancing through the General Assembly ... at the expense of a progressive income tax.
The so-called "Millionaire's Tax" would levy a three percent surcharge on income over a $1 million. House Speaker Michael Madigan says that should raise about a billion dollars, which Illinois would send exclusively to schools.
"My judgment was that it helps education and it calls upon those in the society that are better able to help fund education than others."
But Republicans like Rep. David Harris, of Arlington Heights, say Madigan's plan punishes entrepreneurs for their innovations and business success, and could chase them out of the state.
"We are saying to them, 'Fine. Do it here, but guess what? We're going to hit you hard when you hit that million dollars."
The proposal is also ruffling the feathers of some in the business community. They say most operations in the state are small businesses, and thus file for taxes as individuals. Madigan's plan, they say, would stymie job creation.
Todd Maisch, with the Illinois Chamber of Commerce, says he's already heard from numerous businesses who have considered moving out of the state because of the income tax burden.
"Their notion is that they would — literally; I had a conversation — "If I could get a dump truck big enough to move my building over to Indiana or out of state, I would go ahead and do so ...There's an economic, and, to be honest, an emotional reaction to the policies that this legislature takes."
Moments after a House committee passed the millionaire tax, it rejected a proposal to replace Illinois' flat tax with a graduated one — where the more you earn, the more you pay. Both plans require amending the state constitution.