State Capitol, March 7, 2019 – Gov Pritzker released some details of his tax plan that he says would result in only 2.7% of Illinois taxpayers paying more in income taxes, while 97% pay less income taxes.
The Governor’s progressive income tax at this time in unconstitutional, which means to get it passed, he will have to change the Illinois Constitution that establishes a flat tax rate for everyone, irrespective of income. the Governor argues a progressive tax, with higher income earners paying a higher rate of taxation on their income, is the only to close what he says is a $3.5 billion structural deficit.
Under the Governor’s plan, the current 4.95% tax on income, would only apply to those households making between $100,000 to $250,000. According to his statistics, 97% of taxpayers would pay the same or less than they do now. Those households with incomes of $250,000- $500,000 would pay 7.75% Those household incomes of $500,001- $1,000,000 would pay 7.85% And households earning over $1 million a year would pay 7.95% They say these higher rates would apply to about only 3% of the state’s taxpayers.
But following Gov. Pritzker’s projected graduated income tax proposal that would raise the corporate income tax by 13.5 percent while drastically increasing the tax rate for many small businesses by 60.6 percent if enacted:
“Today’s massive tax hike proposal will further harm the state’s manufacturing sector, which has already lost more than 300,000 jobs since the turn of the century. Illinois cannot afford to lose more of these good, high-paying middle-class jobs,” said Mark Denzler, president and CEO of the Illinois Manufacturers’ Association.
He added, “Taxing and spending are not the answer to our daunting challenges. The governor’s plan will vault Illinois to the 3rd highest corporate tax rate and 8th highest individual tax rate in the United States. Given that we already face the highest property taxes in the nation, the most glaring part of today’s announcement is what is not included: there is no mention of property tax relief for job creators or curtailed government spending.”