Emergency Relief Denied in Lawsuit Over Graduated Income Tax Proposal

A lawsuit filed this week by the Illinois Policy Institute and others over the Graduated Income Tax proposal set to be on voters' ballots this election did not receive the emergency relief it was looking for.

The Illinois Policy Institute has filed a lawsuit over Illinois' Graduated Income Tax proposal, saying language in the Constitutional Amendment is misleading and the new tax would open the door to taxing retirement income. NBC 5's Mary Ann Ahern has the story.

The group's request for a temporary restraining order was denied Friday, but the lawsuit is not dead.

The institute says language in the Constitutional Amendment is misleading and the new tax would open the door to taxing retirement income. Gov. J.B. Pritzker and supporters of the proposal called the lawsuit frivolous.

Both sides are deeply invested with more than $100 million spent in campaign ads surrounding the Graduated Income Tax, which would change the state from its current flat tax rate.

Business owner Tony Duncan is opposed to the graduated tax, saying “right now there is nothing in the change in this amendment except more power- more power for Springfield politicians.”    

While the Illinois Policy Institute's request for emergency relief was denied, the group’s Vice President, Austin Berg says the lawsuit is not dead.

“Our case lives on. We’re still going to fight for Illinois retirees. We’re still going to fight to give Illinois voters the information they deserve," Berg said.  

But, Quentin Fulks who runs Vote Yes for Fairness says “the fair tax has nothing to do with taxing retirement income and it doesn’t make it any easier to tax retirement income. 

"This was a desperate political stunt," he said.

Adding to the debate, State Treasurer Mike Frerichs' own words in June are being used in a new anti-graduated income tax ad. 

Frerichs has since clarified his remarks, saying he supports the tax and retirees are safe.  

Fulks said “if they care at all about being honest to the voters of Illinois, they’d take these ads down.”    

Berg notes, however, that “every state with a progressive tax also taxes retirement income.

"This is an inconvenient truth for them, but one they have to face honestly," he said.

If the graduated tax passes, it means those who earn more than $250,000 dollars a year will pay more.

Fulks insists the change in income tax “will give 97% a tax cut.”    

Duncan said the timing of the new tax – in the midst of a pandemic – is difficult.  

“What’s about to happen, especially if you’re poor or at retirement age – is all the more reason to not start changing things in the way that leaves us more vulnerable," he said.

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