Illinois Dems eye $7B from new tax proposals, push ‘Billionaire Wealth Tax’

By Sean Reed | The Center Square
The Center Square

(The Center Square) – New tax proposals being considered in Springfield could bring nearly $7 billion in revenue to the state, according to advocates. Critics say the proposals – which would change corporate tax rules, among other impactful tax changes – could drive capital and jobs out of the state.

The Illinois Revenue Alliance and Democrat lawmakers on Wednesday discussed initiatives they want passed to increase revenue, which they say would address gaps in the state budget created in-part by federal funding cuts.

Backers said new revenue could be raised without increasing taxes for everyday Illinoisans.

Among the proposals is a wealth tax on billionaires.

Introduced in both the House and Senate, the tax would be on yearly gains and losses of a person’s assets, if valued over $1 billion, at the current income tax rate.

Sen. Karina Villa, D-West Chicago, said the tax on billionaires is needed because wealth is being unfairly consolidated while they receive tax breaks at the federal level.

“[The] 32 billionaires that live in our state can start contributing to ensure that our children don’t starve, that our grandparents don’t become unhoused, that the next generation has opportunities to pursue higher education,” Villa said.

Jeremy Rosen, a senior policy strategist for the Workers Center for Racial Justice, said the coalition supports a billionaire tax because many billionaires avoid paying income taxes by taking small salaries, while being paid mainly through their assets.

“It’s a tax on people’s gains. What we’re really saying is when people have huge, huge gains in wealth, they don’t do anything with it. They’re just throwing it into the bank and keeping it and finding ways to pass it down to their heirs without ever being taxed on it,” Rosen said.

Republican senators, including Minority Leader John Curran, R-Lemont, said the proposals by the Democrats are the wrong answer.

“We have increased the budget in the last 7 years by 40%,” Curran said. “More taxes on job creators and pushing capital investment out to other states is not going to grow the Illinois economy.”

GOP senators took particular issue with a proposal that Sen. Lakesia Collins, D-Chicago, said would decouple the state tax code from that of the federal government.

Sen. Seth Lewis, R-Carol Stream, brought up parts of the bill not mentioned by Collins, including a repeal of the 2019 bipartisan Blue Collar Jobs Act.

“I’m especially concerned about what it means for the hard-working men and women of our labor force – those who the progressive socialists are saying to protect,” Lewis said. “When families are already feeling the strain of rising costs, the last thing we need is a policy change that makes it harder to find good work.”

Lewis, who is one of the Senate GOP’s budgeteers, said the new taxes may not be the wish of the wider Democratic Caucus.

“They have partners, though, in the Senate Republicans in wanting to maintain a budget that is not reckless,” Lewis said.

The sentiment in the House could be similar, as a proposed ballot measure to change income tax rates for millionaires didn’t gather Democrat support needed to progress last month.

Rosen said a billionaire tax would differ from the failed millionaire tax because it doesn’t change the tax rate for anyone, it would adjust existing law.

Other tax proposals by Democrats include an attempt to close loopholes allowing corporations to shift in-state profits offshore to avoid taxes, and a 10% tax on digital advertisers earning over $150 million a year.