Chicago, March 12, 2019 – In a press conference Gov Pritzker campaigned again for his Graduated Income Tax proposal, that he calls “The Fair Tax” that would replace the state’s current Flat Income tax, where all earners pay 4.95% on income with a tax that increases for higher income earners, making over $250,000 annually.
Under the state’s current FLAT tax, where every tax payer pays a rate of 4.95%, an income earner of $50,000/year would currently pay $2475 in Illinois income taxes. A person earning $1,000,000 would currently pay $49,500.
Under Gov Pritzker’s plan, there would be SIX levels of income tax rates, with those earning under $100,000 a year, paying slightly less. That $50,000 annual salary would be taxed $2450, or $25 less than their current tax. The person making over a $1,000,000 under the Governor’s plan would be taxed at an annual rate of 7.95%, or a tax of $79,500 instead of the $49,500, or $30,000 more.
The Governor’s plan also includes a small tax credit for those with children. To calculate what your tax would be under the Governor’s plan, his team created a webpage where one can insert their information and calculate what difference you would pay under the proposed tax. That calculator can be found at Illinos.gov/FairTaxCalculator
Gov Ptizker says his plan would generate an additional $3.4 Billion in annual revenue for the state, and close the unpaid bill backlog over time. He says it would also send a signal to the financial bond houses, and the nation’s business leaders that Illinois is serious about getting its financial house in order.
Republicans oppose the idea — and say with the governor’s recent increase in the state’s minimum wage to $15/hour by 2025, with the state having some of the highest property taxes in the nation, the business climate in Illinois is already driving people to flee the state. They say, adding even more taxes on those who are business owners or executives, is just one more reason for them to leave Illinois. They note in Florida, there is NO state income tax, so that $79,500 state tax under the Pritzker plan, becomes an even larger argument why high-income earners would decide to leave. Federal census figures show Illinois last year lost over 45,000 residents.
