PI Original Adam Doster Thursday March 19th, 2009, 2:17pm

About Those Higher Tax Exemptions ...

At an AFL-CIO press conference in Springfield this morning, AFSCME Council 31 political director John Cameron asked a good question about Gov. Pat Quinn's tax plan:

Why are we increasing the personal exemption
three-fold for those who make in excess of $100,000 a ...

At an AFL-CIO press conference in Springfield this morning, AFSCME Council 31 political director John Cameron asked a good question about Gov. Pat Quinn's tax plan:

Why are we increasing the personal exemption three-fold for those who make in excess of $100,000 a year? If we’re trying to make this more progressive, that just continues to be unprogressive in the process.

Cameron was referring to Quinn’s idea to offset the impact of his income tax hike by tripling the personal exemption in Illinois from $2,000 to $6,000. While this would lower taxes for families of four making less than $56,000 annually, it would also decrease the amount of extra revenue the state could generate from more wealthy taxpayers.

Cameron isn’t alone in questioning the exemption plan.

Sen. James Meeks told the Sun-Times Mark Brown that the exemption is too big and called it an idea with “no allies.” And in his WTTW appearance last night (which we excerpted earlier), Center for Tax and Budget Accountability executive director Ralph Martire pointed out that “increasing the dependent and personal exemptions goes way too high up the income ladder.”

A better, "progressive" alternative would seem to be targeted tax credits for low- to middle-income families. The education funding proposal supported by both Meeks and CTBA provides a model: It would increase the income tax rate by two percentage points, while providing “family tax credits” that would relieve the burden on the bottom 60 percent (PDF) of wage earners in Illinois.

How much extra revenue would this alternative generate if applied to Quinn's budget? We don’t know yet, but we’re going to try find out.

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