Reprinted with permission from WirePoints:

Roads, bridges and a long list of middle-class tax hikes

Governor Pritzker has just proposed a $41.5 billion “Rebuild Illinois” capital spending plan to build and fix things like highways, airports and transit stations.

The spending plan is backed by a long list of new middle-class tax hikes. 

How is the public going to view those hikes? 

Even if the is bill negotiated into something reasonable, a major backlash may occur that could enrage the public and accelerate flight from Illinois.

There’s a case to be made for a capital program in Illinois.

This state’s infrastructure does need attention, and most people would agree there are worthy projects out there.

But Joe and Mary Six-pack will see something different.

They’ll see the list of proposed taxes to pay for the program:

• Gas tax hike – doubling Illinois’ motor fuel tax to 38 cents from 19 cents per gallon, effective July 1.
• Vehicle registration fee hike – doubling the fee for newer vehicles.
• New ridesharing tax – $1 per ride.
• Expanding Chicago’s “Netflix tax” statewide – 7 percent tax on users of streaming services, cable and satellite customers.
• Higher taxes on beer, wine and liquor – $120 million worth.
• New statewide parking garage tax – 6 percent tax for daily parking and 9 percent for monthly and annual.
• Doubling the real estate transfer tax – We’ve been calling this an Exit Tax because it makes it more expensive to sell your property when you want to leave.
• Higher registration fees for electric vehicles – increasing to $250 per year from $34 every other year.

And those are just to pay for the capital bill. Also on the table are a plastic bag tax, a tax on Medicaid providers, a sports gambling tax, a marijuana tax, a video gambling tax hike, a retailer tax hike, a e-cigarette tax hike, higher cigarette taxes and the income tax hike on high earners.

Joe and Mary Six-pack will scream.

They’re already tapped out.

The long-term value of the capital spending will be lost on them because they’ll immediately experience tax hikes, contrary to Pritzker’s promise to soak the rich instead of them.

The income tax increase on big earners (and a tiny cut for others) won’t come until 2021, and only if voters approve a constitutional amendment.

Apparently, lawmakers ready to vote for a capital bill are confident that new spending projects in their districts will keep the masses happy.

That includes many Republicans, who are being induced by Democratic leadership to support the plan in exchange for projects in their districts.

That means pork.

Boondoggles.

The final selection of projects will be based heavily on politics instead of merit.

Disgusted Illinoisans already know that’s routine with capital projects, but it will be worse now because of the horse trading that will be necessary for progressive tax negotiations.

Anger will deepen as headlines ultimately come out on exactly where the money will go.

A central viewpoint we hold at Wirepoints is that cynicism and taxes are part of the reason why people and employers are already fleeing.

That isn’t a political view or value judgement.

It’s just an observation.

Only drastic reforms, not tax increases, will reverse that.

No turnaround scenario can work unless the tax base grows again, but we are going the wrong way.

Further tax increases needed for capital projects will further enrage Joe and Mary Six-pack, accelerating their flight.

A capital bill, without reforms first, is a dangerous gamble, regardless of legitimate capital needs.

It’s another example of the impossible situation we’re now in.

Illinois will only change when politicians face pressure from both above and below. Help us inform other Illinoisans of the facts by liking us on Facebook and by signing up for our news and research updates below.