In a state where one of the only job sectors that’s growing is the government, it’s a terrible idea to implement a new tax that hits private-sector employers and workers hard.
State Sen. Ram Villivalam, D-Chicago, wants to adopt a state payroll tax to do something that sounds good — cover paid family and medical leave. Called the Paid Family and Medical Leave Insurance Program Act, Villivalam’s legislation would impose a new tax based on a worker’s wages and would be withheld automatically from paychecks, just like Social Security and Medicare. Both the employee and the employer would have to contribute toward this payroll tax.
Last month, the state Senate extended the normal deadline for considering the bill, suggesting there’s some momentum.
Revenue from the program, which would impose a 1.12% tax on paychecks (paid in part by the employee and in part by the employer), would fund benefits in a state-managed paid leave program, giving workers up to 18 weeks of paid family/medical leave each year, plus up to nine extra weeks for pregnancy. The tax would take effect Jan. 1, 2027, for employers with 25 or more workers.
Initially, the tax would apply at companies employing at least 25 people, but by 2029 all employers, no matter how small, would be affected.
It's for the children.
