Chicago Tribune: Tax distortions

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(Original Post)

June 08, 2012

This is in response to "Illinois shouldn't adopt progressive tax; Take it from an ex-Californian" (Perspective, June 8), by Lawrence J. McQuillan, chief economist at the Illinois Policy Institute, a free-market think tank. I was alarmed by the way McQuillan's op-ed distorts both the Illinois and California tax systems.

He claims that the rich in Illinois are already paying their fair share, but when you account for other taxes that Illinoisans pay -- like sales and property taxes -- you reach a very different conclusion. The poorest 20 percent of Illinoisans actually spend 13.7 percent of their income in state and local taxes, on average; the richest 1 percent spend just 5.3 percent of their income on Illinois taxes. That's a big discrepancy, and it's anything but fair.

Despite his expertise as a California economist, McQuillan mischaracterizes that state's tax system too. In fact low-income Californians pay more of their income in California taxes than any other income group.

McQuillan's effort to make California a cautionary tale might please his anti-tax buddies but should not persuade Illinoisans.

-- Kelly Davis, Midwest director, Institute on Taxation and Economic Policy, Whitewater, Wis.