Thirty-five politicians join in opposition to proposed Illinois graduated income tax (HJRCA 0002)

"A constitutional amendment (HJRCA 0002) has been filed in the Illinois House; if this amendment was adopted by both houses of the General Assembly and approved by Illinois voters, it would enact legal language that would, in turn, authorize the legislature to repeal the current flat-rate income tax law and replace it with a graduated income tax. A graduated income tax law, such as can be found in high-tax states such as California and New York, would impose higher tax rates on different levels of Illinois income. HR 241 opposes this move on the grounds that it would just be a stalking-horse for a further massive tax increase on Illinois residents. The massive January 2011 flat-rate tax increase did not solve Illinois' fiscal problems, and the sponsors of HR 241 do not believe that abandoning the Lincoln State's historic commitment to a flat-rate income tax structure would improve matters. HR 241 was introduced on Monday, April 15" (Renee Kosel).  

Bill Status of HR0241 (in opposition to a Graduated Income Tax)

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House Sponsors
Rep. David McSweeney - David Harris - Joe Sosnowski - Ron Sandack, Ed Sullivan, Jr., Brad E. Halbrook, David Reis, Pam Roth, Jeanne M Ives, C.D. Davidsmeyer, Charles E Meier, Darlene J. Senger, Barbara Wheeler, Jim Durkin, Thomas Morrison, Jil Tracy, Dwight Kay, Michael W. Tryon, John M. Cabello, Kay Hatcher, Patricia R. Bellock, Renée Kosel, Tom Demmer, Dennis M. Reboletti, Rich Brauer, Tom Cross, Dan Brady, Jim Sacia, Chad Hays, Keith P. Sommer, Raymond Poe, Michael P. McAuliffe, Timothy L. Schmitz, Donald L. Moffitt and Wayne Rosenthal

Commentary

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…

Bill Status of HJRCA0002 (in favor of a Graduated Income Tax)

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House Sponsors
Rep. Naomi D. Jakobsson - Barbara Flynn Currie - Elgie R. Sims, Jr. - Linda Chapa LaVia, Robyn Gabel, Esther Golar, Lawrence M. Walsh, Jr., Emanuel Chris Welch, Lou Lang, Kenneth Dunkin, Keith Farnham, Monique D. Davis, William Davis, Kelly M. Cassidy, Ann Williams, Mike Smiddy, Rita Mayfield, Elizabeth Hernandez, Cynthia Soto and La Shawn K. Ford