Referendum offers hope for the rich to pay their fair share, but change isn’t inevitable

The notion of increasing taxes on the wealthiest Illinoisans to pay for statewide property tax relief was approved in a statewide advisory referendum in this month’s election. The idea  – imposing a 3% levy on individual income over $1 million – carried 60% of the vote, the Associated Press said.

Popular support for the nonbinding vote may help legislative efforts to put a constitutional amendment on the 2026 ballot to authorize the new “millionaires tax.”

Former Gov. Pat Quinn, head of the committee advocating the tax on the wealthy, said the referendum’s provisions would provide “the largest property tax relief measure in state history.

“For too long, millionaires have been getting tax breaks, and Illinois homeowners have been getting higher and higher property tax bills,” Quinn said. The change would offer “a chance to reform an unfair upside-down tax code and give long-overdue property tax relief to everyday homeowners across the state.”

The Illinois Department of Revenue showed about 77,000 Illinoisans reporting adjusted gross income of more than $1 million annually in 2021, the most recent year available. IDOR estimates that adding a 3% income tax surcharge to net income over $1 million statewide could result in additional tax revenue of $4.5 billion.

Even more everyday Illinoisans probably support such a move, according to Marc Poulos, Executive Director and Counsel for the union-backed Indiana, Illinois and Iowa Foundation for Fair Contracting.

“Getting 60% of the electorate to vote for a measure without any money behind the message suggests that the message probably has more support than what shows in the numbers,” he told the Labor Paper. “I think it’s a genuinely a widely shared view by the 99% that the wealthy don’t pay their fair share. Not that it’s nefarious. Rather, they have the means to pay someone to make sure they take advantage of the various caveats and loopholes that exist in our system.”

Further, it’s not a partisan issue, Poulos added.

“I think the idea of taxing the rich crosses party lines,” he said. “There are voters on both sides of the aisle that believe the wealthy do not pay their fair share. And the wealthy 1% spans from Oprah Winfrey on the left to [Citadel hedge-fund billionaire] Ken Griffin on the right. So, it’s an issue that would draw support from both sides of aisle, something needed in order to obtain 60% of those voting on the measure or the majority of those voting in the election in order to successfully pass a constitutional amendment.

“Although, make no mistake about it, a measure like this would draw formidable opposition from those in the 1%.”

To become law,  the issue would have to be passed by a supermajority of the legislature and then be put on the ballot as a binding question.

In 2014, lawmakers put a similar advisory referendum on the ballot calling for state millionaires to pay 3% on income exceeding $1 million, with proceeds specifically earmarked for schools. Even more voters – 64% -- backed the idea, but it never went farther. And in 2020, voters rejected Gov. Pritzker’s plan to change Illinois’ Constitution to replace the state’s flat 4.95% income individual income tax rate with a sliding scale that would make higher-income taxpayers pay more.

Quinn voiced some optimism, saying, “It gives us a lot of momentum to work with legislators.” But Poulos –active in the successful effort to pass a Workers Rights Amendment for Illinois –  says it’s hardly a done deal.

“The only way it’s feasible is if someone takes up the cause,” Poulos said. “Maybe starting down the barrel of a $3.1 billion structural budget deficit will get the legislature to take up the cause independently. But typically, that doesn’t happen. More often an interest group pushes for a cause and then funds the operation to get the measure passed. In the case of the fair tax proposal, public sector labor largely pushed for the measure with the financial backing of the Governor, but ultimately failed. With the Workers Rights Amendment, labor again took up the fight, and funded the operation, and with a successful outcome. However, with the recent failed fair-tax campaign, I do not see another tax proposal hitting the ballot for a constitutional amendment any time soon.”

 

Two other statewide ballot questions also passed overwhelmingly:

* 72% of voters approved the in vitro fertilization (IVF) ballot question, which became timely after some conservatives sought to limit the procedure after the U.S. Supreme Court reversed Roe v. Wade, and

* 89% approved protecting election workers following threats.