PEORIA, Ill. — The Graduated Income Tax will be on ballots in Illinois in November, which would change the way residents’ income is taxed in the state.
The graduated tax would amend the Illinois state constitution, which currently states income tax must be flat across all income levels.
Under current law, that flat tax rate is 4.95%.
Illinois is one of 18 states that currently has a flat income tax or no income tax. The 32 other states have a graduated income tax, which taxes higher incomes at higher rates.
Illinois Republicans have been against the tax, saying it would impact middle-income families too greatly.
“Our opposition is not about protecting million dollar incomes,” said Illinois Senate Republican Leader Bill Brady. “It’s about middle-income families.”
Illinois Education Association (IEA) President Kathi Griffin said the amendment would help a majority of Illinoisans.
“This is going to impact 3% of the wealthiest people in our state,” said Griffin.
Senator Brady argued that, by taxing higher-income individuals and families, they will find ways around the increased tax rate.
“Higher income individuals will make decisions that will reduce their requirement to pay in Illinois,” said Brady. “Therefore, the Democrats will have to rely on creeping the brackets down.”
By doing so, Brady says, middle-income families would be left responsible to make up for the lost tax money.
IEA argues that the current way of taxing income in Illinois is “unfair and inadequate,” and Griffin said that the state needs the graduated income tax as added revenue for the state.
“We really, really need to make sure that we are able to pay our bills as a state,” said Griffin. “If you would use the ‘Fair Tax calculator,’ you would see that you’re going to pay either the same or less.”
Griffin added that the state can be put back on the “right track” with added income from the taxes.
The rates proposed in the amendment are as follows:
- 4.75% for joint filers with income between $0 – $10,000
- 4.90% for joint filers with income between $10,001 – $100,000
- 4.95% for joint filers with income between $100,001 – $250,000
- 7.75% for joint filers with income between $250,001 – $500,000
- 7.85% for joint filers with income between $500,001 – $1,000,000
- 7.95% for joint filers with income above $1,000,000
Under the graduated income tax, for example, someone earning $80,000 would be taxed at 4.75% for the first $10,000 and 4.90% on the rest of the $70,000.
The incremental rate would increase for incomes up to $1 million.
For people earning more than $1 million, their entire income would be taxed at the rate of 7.95% instead of gradually increasing the rate on amounts below $1 million.
Full interview with IEA President Kathi Griffin:
Full interview with Illinois Senate Republican Leader Bill Brady:
