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Short Description: CONAMEND-GRADUATED INC TAX
Short Description: CONAMEND-GRADUATED INC TAX
House Sponsors
Rep. Naomi D. Jakobsson - Barbara Flynn Currie - Elgie R. Sims, Jr., Linda Chapa LaVia, Robyn Gabel and Esther Golar
ILCON Art. IX, Sec. 3
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Synopsis as Introduced
Proposes to amend the Revenue Article of the Illinois Constitution. Provides that individual income taxes may be at a graduated or a non-graduated rate. Provides that any such tax imposed on corporations shall be at a non-graduated rate, not to exceed the average of the lowest and highest individual rates by more than a ratio of 8 to 5. Effective upon being declared adopted.
Actions
Date
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Chamber
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Action
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1/8/2013
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House
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1/9/2013
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House
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Read in
Full a First Time
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1/9/2013
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House
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1/23/2013
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House
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2/19/2013
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House
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2/19/2013
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House
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2/19/2013
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House
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2/21/2013
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House
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from THE CASE FOR CREATING A GRADUATED INCOME TAX IN ILLINOIS (Center for Tax and Budget
Accountability):
• Current Illinois tax policy is neither fair to
taxpayers nor designed to sustain funding current service levels into the
future.
• One key reason Illinois tax policy fails both the fairness
and sustainability tests is that overall the system fails to impose tax burden
in a manner that corresponds to ability to pay.
• A tax system must be progressive to impose tax burden in a
manner that corresponds to ability to pay. A progressive tax system imposes a
greater tax burden on affluent than on middle to low-income earners, when tax
burden is measured as a percentage of income. This is needed to track ability
to pay, given the significant growth in income inequality over the last 30
years. Because it tracks ability to pay, progressive taxation has traditionally
been the cornerstone of fair taxation under capitalist tax policy generally and
in America specifically. Far from being progressive, Illinois’ tax policy is
regressive, assessing much higher overall tax burdens as a percentage of income
on low and middle-income families than on affluent families. Indeed, Illinois has
the third highest tax burden on low income families in the nation (Op. Cit. ITEP “Who Pays?” p. 42. The only
states with a higher state and local tax burden on the Lowest 20% of families
are Washington, and Florida, neither of which have a state personal income
tax).
• The state constitutional prohibition on implementing a
graduated rate structure in the Illinois individual income tax (Illinois Constitution 1970, Article IX,
Section 3(a) “A tax on or measured by income shall be at a non-graduated rate”)
is one of the primary reasons Illinois
tax policy is regressive overall, and hence unfair. Not having a graduated rate
structure for its individual income tax also makes Illinois a tax policy
outlier. Of the 41 states with an individual income tax, all but seven have
graduated rate structures (Federation of
Tax Administrators. “State Personal income taxes.” February, 2011).
• Given the significant growth in income inequality over the
last 30 years, Illinois’ failure to implement a graduated individual income tax
rate structure has both harmed the state’s private sector job growth and
contributed substantially to Illinois’ ongoing structural deficits in its
General Fund.
• If Illinois amended its constitution to allow
implementation of a graduated rate structure for the individual income tax,
that structure could be designed in a way that would: (i) cut overall state
income tax burden for 94 percent of all taxpayers—that means on average,
taxpayers with under $150,000 in annual base income would receive a tax cut;
(ii) raise at least $2.4 billion annually in new revenue to help eliminate
ongoing structural deficits in the General Fund; (iii) despite shifting tax
burden to affluent taxpayers, nonetheless keep the effective state income tax
rate for millionaires at just 4.3 percent (The
Illinois “effective” tax rate is the overall (not graduated) percentage of
Illinois “base” income that a filer pays in Illinois Individual Income Taxes
after deductions and credits); and (iv) stimulate the growth of at least
36,000 jobs in the state’s private sector through enhanced public and consumer
spending…
Call your legislators. Tell them you support House Joint Resolution Constitutional Amendment 0002; however, also ask them about why corporations should be taxed at a non-graduated rate instead..
Call your legislators. Tell them you support House Joint Resolution Constitutional Amendment 0002; however, also ask them about why corporations should be taxed at a non-graduated rate instead..
I'm afraid this makes too much sense, and exposes our General Assembly and Governor to the realities of WHY ILLINOIS DID NOT PAY UP ON PENSION PROMISES. For shame.
ReplyDeleteMarjorie,
Retired Special Education Teacher/Supervisor and Adminstrator