Illinois to Follow California's Lead With 'Millionaire Tax' Referendum

Illinois to Follow California's Lead With 'Millionaire Tax' Referendum

Michael Madigan, the all-powerful Speaker of the Illinois House of Representatives, announced Thursday that he would direct the Democrat-controlled state legislature to place a referendum on the November ballot that would raise taxes on millionaires by three percent. The measure is similar to a referendum that California Gov. Jerry Brown convinced voters to pass in November 2012, and which helped the state achieve a budget surplus.

Madigan, a Democratic Party boss whom most regard as the true ruler of the state–surpassing Democrat Gov. Pat Quinn–would need to convince three-fifths of both houses to pass the tax hike as a constitutional amendment before it could be put to the voters. 

However, as Ray Long, Monique Garcia and Maura Zurich of the Chicago Tribune note, “Madigan holds enough Democratic votes that he could muscle the measure through.”

Democrats hold supermajorities in both the House and Senate in Illinois, thanks partly to the fact that Madigan redrew the districts after the 2010 Census–and did so without fear of opposition from the governor after Quinn defeated his Republican challenger. 

The state has continued on a downward fiscal spiral, and Illinois has the most underfunded pension system of any state in the Union, as well as the third-highest unemployment rate.

Madigan is unfazed by research that proves that taxes on millionaires encourage them to leave the state, as has been the case in New Jersey

“Well, if they’re in Illinois today, they’re probably so much in love with Illinois that they’re not going to leave,” he said, according to the Tribune–a backhanded acknowledgement of how poorly the state is already doing. 

Madigan may also be encouraged by California’s example, where millionaires have largely stayed put, even though Gov. Brown’s tax increase on those earning more than $250,000 has helped the state achieve the second-highest tax rate in the nation. However, Illinois does not enjoy California’s comfortable climate.

The real goal of the proposed referendum may not be fiscal, but political. The winner of the Republican primary this week was billionaire Bruce Rauner, a political newcomer who enjoys close ties to Democrats such as Chicago mayor Rahm Emanuel, yet has vowed to take on the public sector unions and the Madigan machine.

The referendum is just one way in which Democrats will remind voters of Rauner’s immense wealth, in a repeat of President Barack Obama’s re-election strategy against Mitt Romney. 

Rauner is hoping to put his own referendums on the ballot, including one for term limits, which would destroy the basis of Madigan’s power.

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