SR0383 98TH GENERAL ASSEMBLY

SR0383 LRB098 12440 HLH 46837 r

SENATE RESOLUTION

WHEREAS, Article IX, Section 3 of the Illinois Constitution states, "A tax on or measured by income shall be at a non-graduated rate."; and

WHEREAS, Article IX, Section 3 of the Illinois Constitution was added during the 1969 Constitutional Convention and prior to this, Illinois had no direct income tax; and

WHEREAS, A background paper written for the Committee of 50 by J. Fred Giertz during the committee's review of the 1970 Constitution in 1987 states, "Until 1969, Illinois had no income tax. The status of the income tax under the Constitution was cloudy. A graduated income tax was ruled unconstitutional in 1932, but in 1969 the Illinois Supreme Court overruled its 1932 decision, permitting a flat rate tax on income with a different rate for corporations and individuals. Therefore, when the convention was deliberating the 1970 Constitution, Illinois was making use of an income tax similar to the one now employed."; and

WHEREAS, The paper also states, "To a certain extent, the convention took the income law already in place in 1969 and gave constitutional status to several provisions. This may seem unusual, but in light of the long and heated struggle to bring the state income tax into existence, such a response is understandable. The income tax probably would never have been passed initially if assurances had not been given to the business community on limiting the taxation of corporations, as well as on the use of progressive rates. The 1970 Constitution simply gave more definite legal status to the promises made when the income tax was passed in 1969."; and

WHEREAS, The Constitution allows the State to raise and lower tax rates on both individuals and corporations to meet the changing revenue needs of the State; and

WHEREAS, An efficient tax system does the least to distort the distribution of resources in the economy and does little to alter consumer or investor attitudes; and

WHEREAS, A flat system of taxation does the least to distort the economy; and

WHEREAS, Illinois individual income tax payers saw their taxes rise from 3% in 2010 to 5% in 2011 and corporate income tax payers saw their taxes rise from 4.8% to 7%; and

WHEREAS, The revenue from this increase was promised to be used for the payment of overdue bills owed by the State to persons who had provided a service to the State, but as of June 2013, there exists a backlog of bills in the billions of dollars; and

WHEREAS, A system of progressive taxation does nothing to ameliorate the backlog of bills, reduce the structural deficit, or otherwise provide a fix to State finances; and

WHEREAS, A flat tax system provides some certainty to all taxpayers that they will be treated as fairly as their neighbor when it comes to the shared sacrifice of taxation; therefore, be it

RESOLVED, BY THE SENATE OF THE NINETY-EIGHTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that the Illinois Constitution should not be amended to allow for graduated or progressive income taxation; and be it further

RESOLVED, That suitable copies of this resolution be delivered to all Illinois constitutional officers.