The House Progressive Caucus has opposed repealing the state’s estate tax based on one simple idea: because the estate tax is only levied upon those who can be considered among the top tier of wealthy individuals, repealing the tax would be like providing a “giveaway to the wealthy few.” For now, estates worth over $4 million will still be subject to an estate tax, which provides Illinois with nearly $305 million a year.
According to Rep. Will Guzzardi, “there is not enough support to pass this measure among House Democrats.” According to him, repealing the estate tax in such circumstances “undermines the basic premise of the fair tax, which is that our tax system ought to ask the very wealthiest to pay a little extra in order to fund the basic services that the government provides.”
The concept is simple. If you live in a country where you are provided the opportunity to become one of those super-rich individuals based on that country’s underlying conditions, then you should be perfectly jovial to pay a little extra so that other people may continue to enjoy the same opportunity you were provided, especially in the form of estate taxes.
Senate Bill 689 was more or less a revenue bill that word allow the Illinois budget to work as planned. SB 689 levied a new tax on Medicaid managed care organizations that would result in about $390 million in revenue. It goes into effect only alongside a majority approval of a graduated income tax, which House Progressive Caucus members say would stand in stark opposition to a repeal of the estate tax. The super-rich do not need a $300 million tax cut, and the House Progressive Caucus does not intend to give it to them.
If voters fail to approve the graduated income tax in 2020, then SB 689 and the associated package of bills will not go into law.
The primary issue with repealing the estate tax is balancing the budget in some other way. Those opposed to the repeal say that resources would have to be reallocated away from programs that should be provided by a state government, such as social programs like public schooling and affordable healthcare. With the implementation of a graduated income tax, the broken tax system might become whole again with a brand new source of slowly growing revenue for those programs.
What will Illinois voters make of the new measures? We will have to wait until the 2020 election to find out.