But both Rauner and I – as does everyone else who lives in IL, no matter how rich or poor – pay the same state income tax rate.
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“The fact is this is a tax cut for small and middle-size businesses and for those job creators”, Harmon said.
Illinois Democrats approved a $3.9 billion bill to fund colleges and various social service programs while the state operates without a budget, but their plan is expected to be rejected by Republican Gov. Bruce Rauner.
Lang’s “fair tax” proposal is tied to a proposed amendment that would do away with the Illinois Constitution’s requirement that all taxpayers be charged the same rate.
Under the bill state Rep. Lou Lang, D-Skokie, filed Friday – which will only work if IL voters approve a constitutional amendment to reform the tax code – most married taxpayers would pay 3.5 percent for income of $200,000 or less; 3.75 percent on income between $200,000 and $750,000; 8.75 percent on income between $750,000 and $1.5 million and 9.57 percent on income over $1.5 million. That proposal, sponsored by Rep. Christian Mitchell, D-Chicago, would require the support of three-fifths majorities in the House and Senate to be put to voters for approval on the November ballot.
A progressive tax can’t happen without an amendment to the state constitution first.
The potential for IL to take on a greater funding obligation for schools anxious Republicans who said the state is already in dire financial straits with other responsibilities, including payments to a pension system that’s in the red at more than $111 billion.
Small businesses (think sole proprietorships, or S-corporations) often pay personal income taxes, not the corporate rate.
For all other taxpayers, the rates would be 3.5 percent for those earning $100,000 or less; 3.75 for those earning more than $100,000 and up to $500,000; 8.75 percent for those earning more than $500,000 and up to $1 million; and 9.75 percent for those earning more than $1 million.
“It would be best if issues like taxation, tax reform, whether it’s tax increases or tax cuts, be done in a bipartisan way”. That rate is scheduled to drop to 3.5 percent in 2025.
Rauner has said he’s willing to support a tax increase to help do that if he gets some of the things he wants.
The governor’s office says a progressive income tax would be “the straw that breaks the IL economy’s back”.
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And Comptroller Leslie Munger estimates IL could finish the current budget year on June 30 with a staggering $10 billion deficit. “Seems to me, though, that it’s very hard to look at a proposal that’s going to provide tax relief to 99 percent of our taxpayers and say ‘I’m against that.’ How can anybody be against that?” He says action on the concept could be taken soon, because a deadline is looming.
