By Kelly Heinzerling
Medill Reports

When Illinoisans went to the polls this year, they were asked to vote on an amendment to the Illinois State Constitution which would give lawmakers the ability to create a graduated-rate income tax, which would tax wealthier people at a higher rate.  Despite having the support of Gov. J.B. Pritzker and many immigrant rights and other advocacy groups, the Fair Tax Amendment failed to clear the 60% approval from voters needed to pass, falling five percentage points short.

Supporters of the Fair Tax, which exists in some form in 32 other states, say the measure failed for a variety of reasons.  But they all agree that the flop can only spell trouble for low- and middle-income families, many of whom are immigrants.

“The failure of the Fair Tax amendment is bad news for virtually everyone in Illinois except the very rich,” University of Chicago law professor Daniel Hemel said, noting the revenue from the graduated-income tax could have helped to fund public services such as schools and hospitals, while low- and middle- income families would have paid less in taxes.

Hemel said the current flat-rate tax structure results in worse government services at a higher price tag.  Put bluntly, Hemel said, “really, nothing good comes of the amendment’s failure.  It’s a depressing outcome.”

Hemel’s disappointment is echoed by community leaders who have petitioned for this amendment to pass for months.  Immigrant leaders hoped that the additional revenue from a graduated income tax could fund important programs for lower- and middle-income people, including a proposal in the Illinois General Assembly budget which would provide state-funded healthcare for all people 65 and older, regardless of immigration status.  Pritzker has said there will now be cuts to fund basic costs in the budget.

Making budget promises without access to proper funding is ultimately “irresponsible” to the immigrant communities they propound to help, said Youngwoon Han, a community organizer at the HANA Center.  The Chicago-based HANA Center, which works to educate and organize Korean American and other multi-ethnic immigrant communities, operates through state funding and is now waiting to learn if, come budget cuts, the state will “see them as a priority,” Han’s co-worker Jiyoon Song said.

“The funding is a necessity.  Our community sees that a more stable budget and revenue will benefit our community,” Song said, adding that the tax was widely supported in the community she works with at HANA Center.  “We saw Fair Tax as a step towards economic justice.”

Leaders hypothesize several reasons why the amendment failed, such as voters skipping it because they did not understand where it was on the ballot, voters confused by the complex language, and the fact that the amendment itself did not use the word “Fair Tax.”  There was a large spread of disinformation surrounding the amendment, backers added, in part because of  $56 million in anti-Fair Tax advertisements funded by billionaire Ken Griffin.  As the state’s richest man, he had the most to lose from a graduated tax.  Angee Peralta, a Democracy Project fellow at the Southwest Organizing Project, said that she witnessed the anti-Fair Tax commercials swing many people against the amendment by convincing them incorrectly that it was bad for the middle class.

“We were competing against a very aggressive counter media campaign … when people see something on TV they automatically think it has to be true,” Peralta said.

According to the Institute on Taxation and Economic Policy’s 2018 Tax Inequality Index, the Illinois state and local tax system is the eighth most unfair in the nation, which means that after taxes are collected, incomes become more unequal.

Without additional income, Illinois faces a $3.9 billion deficit for the current fiscal year with continuing deficits of $4 billion or more for the next five fiscal years, according to a Nov. 13 report from the Governor’s Office of Management and Budget.

Enlace Chicago Associate Director Cesar Nunez said the Little Village organization estimated that Fair Tax could have raised $3 billion this year alone, with only the top 3% of income earners seeing an increase in taxes.

As the state decides how to budget for this next fiscal year, likely involving widespread tax increases and/or budget cuts, immigrant rights leaders remain confident that the time for a fairer tax system will come.

“We’re viewing this as a beginning … there’s so many more individuals who are informed about Fair Tax today than yesterday,” Nunez said.  “I don’t think we should stop looking out for one another, and Fair Tax was a way to continue to look out for one another.”

Kelly Heinzerling is a video reporter at Medill, specializing in immigrant communities in Chicago.