Opinion: City Income Tax Will Never Happen - NBC Chicago
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Opinion: City Income Tax Will Never Happen



    In her speech to the City Club on Tuesday, Chicago Teachers Union President Karen Lewis suggested that Chicago could raise $1 billion by imposing an income tax on residents and commuters.

    “A combined city-income and commuter progressive-tax between just 0.5 percent and 1.5 percent can generate close to a $1 billion for the city, with half going to CPS,” Lewis said. “Imagine if CPS had $600 million more in revenue … we would be having an entirely different conversation of improving early childhood programs, wrap around services, adult education, anti-violence initiatives, expansion of nurses, counselors and school social workers, etc.”
    What are the chances of that happening? Less than zero. Because even the legislators who favor the other half of Lewis’s tax reform proposal -- a graduated income tax -- oppose a city tax.
    On May 30, 13 Democratic state senators introduced a constitutional amendment to allow for a graduated tax. The amendment would have to be approved by three-fifths of both houses, then submitted to the voters.
    Along with providing for a sliding tax rate, though, the amendment would prohibit cities, counties and townships from imposing income taxes. Illinois is currently one of six states with a law against municipal income taxes, but the proposed amendment  would write that prohibition into the constitution. Here's the language:
    There may be one tax on the income of individuals and corporations. This may be a fair tax where lower rates apply to lower income levels and higher rates apply to higher income levels. No government other than the State may impose a tax on or measured by income.
    Members of the fiscally conservative Illinois Policy Institute argue against a civic income tax by pointing out that Detroit -- the city Chicago doesn’t want to become -- imposes one of 2.5 percent. That’s a weak argument, because New York -- the city Chicago wants to become -- imposes an even higher income tax, of 2.9 percent to 3.6 percent. Also, Michigan does not allow cities to levy sales taxes. 
    If Lewis wants more money for schools, she’d be better off lobbying for an increase in the city’s sales tax. That’s the Chicago way to pay for services.