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James Tobin's Tax Revolt

He may be a radical, but on this issue he's right in the middle of the mainstream.

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Jim Tobin wants to make the members of the Illinois General Assembly more responsible for their actions when it comes to raising revenues. He thinks he's got the vehicle in the Tax Accountability Amendment.

Tobin is best known as the honcho of the conservative National Taxpayers United of Illinois. He's also chair of the nonpartisan Tax Accountability Amendment Committee, which needs to get 250,000 signatures on its petitions by May 1 in order to get the TAA on the ballot this fall, the only binding referendum this year. Tobin has marshaled an unusual array of allies for the effort: conservatives, moderate Republicans, the Libertarian Party--and even some liberal Democrats, who say they like it because it's fair and, since any increase would have to include Republicans, would spread the blame for tax increases over both parties.

The Tax Accountability Amendment would require that any increase in taxes by the state legislature be passed by a three-fifths "supermajority," and that the public be given two weeks' notice before revenue committees in either house consider any bill that would raise taxes. It would also limit terms on the newly mandated revenue committees to four consecutive years.

"If this had been law last year, it would have stopped the June 30 tax massacre," says Tobin. "In one day the General Assembly raised the income tax 20 percent for two years, raised the gasoline tax six cents a gallon to 19 cents, created a new sales tax on computer software, raised the cigarette tax 50 percent, gave themselves a $6,000 pay raise, and doubled Jim Thompson's pension to $79,500 a year." Of all the increases that session, only one--the computer-software tax--had 60 percent approval from the legislature. "If there had been two weeks' notice of that one before it went into committee, they wouldn't have been able to introduce it out of thin air, with no opportunity for discussion or opposition by taxpayers. That probably would have killed the software tax--which made 60 percent by three votes--if the computer lobby had known about it."

The clause that limits terms on revenue committees is designed to keep members from getting too powerful and too beholden to special interests. Tobin points to state senator Dawn Clark Netsch, now the Democratic candidate for comptroller. "She was chairman of the senate revenue committee for ten years, and she's voted for every tax increase since 1973. She has a campaign war chest that's stuffed with dollars from the special interests she's been raising taxes on behalf of all those years."

Proponents of the amendment, says Tobin, include more than 30 state representatives, 36th Ward Alderman William Banks (who brought in 5,000 signatures for the petition drive), Lieutenant Governor George Ryan, and Steve Baer, the conservative Republican candidate for governor who did surprisingly well against Jim Edgar. Edgar and his opponent, Neil Hartigan, have recently come out in favor of it. Foes include Richard Daley, house speaker Michael Madigan, and state treasurer candidate Pat Quinn.

"My first question is, can it pass constitutional muster to get on the ballot?" asks Quinn. "I've been involved in three petition drives. The Illinois Supreme Court has adopted a rather rigorous test [on the constitutionality of binding initiatives]. There's a question of whether it meets that constitutional scrutiny. I don't think it's right to ask people to pass and sign petitions with that question."

Quinn also objects to the amendment because it isn't directed at the property tax, "the number-one tax people object to most in Illinois," though the amendment would seem to prevent sudden unheralded increases in those taxes--as happened last June 27, when the state real estate transfer tax was increased by 100 percent. He also claims the amendment wouldn't do anything to shut loopholes that give big corporations unfair tax breaks.

"To me, the number-one issue is getting fairness in the tax code. [The amendment] doesn't deal with the concerns of the average wage earner," Quinn says. "I'd rather work for an earned-income tax credit and increased exemptions. I think if you want to get tax reform in Illinois, it means getting Sears and the other major corporations and their tax loopholes. Close them, and give relief to families." He says he thinks promoters of the amendment mistakenly lump wage earners and families with corporations. He also asserts that the amendment would make it harder to close tax loopholes. "If you need a three-fifths majority, the friends of Sears only have to get two-fifths to maintain their tax breaks."

Attorney Steve Merican, who wrote the amendment, replies, "I think we're on pretty solid legal ground here. There's no such thing as a black-and-white issue on anything that is constitutional. In Illinois we have a very limited right under the 1970 constitution to amend by referendum. There's one exception to the rule: under Article 14 we're allowed to change the structure and procedures [of the General Assembly]. The amendment must change both. We believe this amendment does that--the structural change is the formation of committees, the procedural change is the change in the procedure for passing revenue bills."

TAA would create new, constitutionally mandated revenue committees for both the house and senate that would oversee all bills related to revenue. Under the current system tax bills may be considered by a gaggle of committees, including agriculture, appropriations, a municipal-law committee, social welfare, mental health care, and, of course, revenues. There's a lot of questionable deal making going on behind all those doors. "There are bills in those committees that if passed could cost us millions," says Merican. "Right now, we don't know as taxpayers where those bills are, or who's considering them, or what lobbyists are working for them. We want to put them all in one place."

State senator Judy Baar Topinka, a Republican from North Riverside, says, "I'm frequently in disagreement with James Tobin--I think he's a radical. But I'm in agreement with him in this. Number one, I think it's eminently fair. Number two, both parties have to come together, with all the players being considered. The third thing is, I don't think there's anything inherently wrong in telling the public a tax increase is needed, and why. The way things are done now is just arrogant--I think the public-hearing part is very, very fair. Furthermore, tax increases are a major part of legislation. They're not trivial. I see families in my district being hit all over with these taxes--people on fixed incomes, the elderly--and they don't know why."

She sees another reason for the supermajority. "All major legislation requires a three-fifths vote. Very often with simple majorities you see structured votes--"You put up X number on your side, and we'll put up X number on our side.' That way you keep off people in swing districts and let some people keep a low profile." A supermajority, she says, would make more legislators declare themselves.

"I have voted for tax increases in the past, and I will vote for future tax increases, when it's proven that they're needed and fair. This is not 'just say no.'" And Pat Quinn's objections? "Quinn is against it because he didn't think it up in the first place. He likes to hotdog and spotlight. I can't get too excited about Pat Quinn's opposition."

Steve Brown, press agent for Michael Madigan, brushes TAA aside as "Tobin's publicity stunt. It's not a very practical approach to try to operate government." Brown even once characterized Tobin and other proponents of TAA as "LaRouche-like" on a radio show.

But Tobin thinks he's right in the middle of the mainstream on this one. "According to a Channel Two poll, 82 percent of us, across all demographic lines, are opposed to any increase in the income tax or continuing the surcharge. According to a Sun-Times poll, 76 percent are opposed. A poll Hartigan did showed over 70 percent of us opposed.

"If we really need more tax money, the legislature will be able to raise it--after they get public approval. This is our only chance to stop the greedy politicians. If we don't get this on the ballot, I fear there'll be a major income-tax increase next year, when the two-year income-tax surcharge expires."

Tobin is predicting an increase of as much as 60 percent in the state income tax on June 30, 1991. "That's the number that's been rolled around down there in Springfield. Edgar says he'd keep the surcharge; Hartigan says he'd roll it back. Others want to take it up 60 percent--with a small property- tax rollback. That's supported by the farm lobby--they can play with depreciation and show zero profits, and with a property-tax cut they can shift the tax burden to the people who live in the cities."

The Tax Accountability Amendment Committee, headquartered in Arlington Heights, currently has almost 150,000 signatures. Tobin says an average of 10,000 come in every day. To collect more, members of TAAC and their allies will be at Daley Plaza every day through May 1.

"I know the name 'accountability amendment' doesn't sound very sexy," says Steve Merican. "But it is designed to discipline the legislature, because they won't discipline themselves. They're arrogant and not accountable to their constituency. It's really the only hope for getting rid of the income-tax surcharge--once a tax is instituted, it just never goes away."

Art accompanying story in printed newspaper (not available in this archive): photo/Bruce Powell.

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