Today, Americans for Tax Reform urged Gov. Pat Quinn to reject his push for an income tax increase after the November election. Last week, Quinn’s budget director, David Vaught, revealed the administration’s expectation of a $6 billion tax hike in January. This is Quinn’s third attempt to raise the income tax. The governor’s first two tax increases failed in the legislature due to public outcry in advance of an election.

Underscoring the attempt at secrecy, Gov. Quinn quickly denounced Vaught’s comments as “misconstrued.” The budget director’s actual quote, however, is very straightforward:

“We fully expect that we’re going to pass a tax increase in January. We think it’s going to be substantial.”

When pressed for details, Vaught floated a 2 percent income tax increase – larger than either of the governor’s previous proposals – extracting $6 billion from Illinois families. He touted the support of “overseas investors” for the tax increase, as they are currently providing the capital to sustain Illinois’ debt-addled economy. In the letter to Gov. Quinn, ATR President Grover Norquist wrote:

“This smacks of political opportunism and ignorance of economic reality. Your ‘third time’s a charm’ approach to raising taxes flies in the face of the best interests of Illinois families, who disapproved of your 2009 tax increase by a 55-to-25 margin. The attempt to keep it a secret until after the November election is Springfield politics at its worst. It follows your refusal to fund a $4 billion pension obligation, the most recent example of state government ignoring fiscal reality for the sake of political expediency.

“Of course, the most important side effect of this tax increase is its adverse impact on Illinois’ economy. The reason Vaught cited the importance of overseas investors is the fact that so much of the state’s overspending is dependent on borrowing. With no structural fix even being discussed, Illinois’ credit rating continues to slide. Fitch, a prominent credit rating agency, recently attributed the decline to ‘a continuing unwillingness…to take action to address its significant budgetary problems.’”

To see the letter from Grover to Gov. Quinn, see below.

August 3, 2010

Dear Gov. Quinn:

The first two years of your governorship have seen two significant tax increase proposals. Taxpayers breathed a sigh of relief after both died in the legislature. Now it seems your administration is pushing for an even larger income tax hike – after the November election, of course. Reports suggest that you are planning a $6 billion tax increase in January, bigger than any of your previous failed proposals. It’s time to come clean to your constituents, reject this failed tax-and-spend agenda, and put forth a number of serious reforms.

Last week, your budget director David Vaught said in an interview, “We fully expect that we’re going to pass a tax increase in January. We think it’s going to be substantial.” Pressed for details, he floated a 2 percent income tax increase that would extract $6 billion from Illinois’ private sector. He went on to tout the approval of “overseas investors,” who were supportive of an income tax hike of “only 2 percent.”

This smacks of political opportunism and ignorance of economic reality. Your “third time’s a charm” approach to raising taxes flies in the face of the best interests of Illinois families, who disapproved of your 2009 tax increase by a 55-to-25 margin. The attempt to keep it a secret until after the November election is Springfield politics at its worst. It follows your refusal to fund a $4 billion pension obligation, the most recent example of state government ignoring fiscal reality for the sake of political expediency.

Of course, the most important side effect of this tax increase is its adverse impact on Illinois’ economy. The reason Vaught cited the importance of overseas investors is the fact that so much of the state’s overspending is dependent on borrowing. With no structural fix even being discussed, Illinois’ credit rating continues to slide. Fitch, a prominent credit rating agency, recently attributed the decline to “a continuing unwillingness…to take action to address its significant budgetary problems.”

This translates to double-digit unemployment, economic stagnation, and population loss. All of these will be exacerbated should your desire for higher taxes become reality. Illinois families simply cannot afford this fate. I urge you to do an about-face on tax policy, come clean with your constituents, and pledge to oppose and veto all tax increases. A copy of the Taxpayer Protection Pledge is attached for you to sign.

Onward,

Grover Norquist

Posted by Joshua Culling on Thursday, August 5, 2010 5:46 PM EDT

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