Quincy, IL News - Journal930.com
Quincy, IL News - Journal930.com
Tuesday, Dec 1, 2015

Rate structure proposed for progressive income tax

1 year, 8 months ago thesouthern.com

Income over $12,500 would see a tax increase based on current tax rates

From thesouthern.com:

A top Democrat in the Illinois Senate who supports a proposed graduated income tax said his plans for a rate structure would lower taxes for most Illinois residents.

While the vote is pending on a constitutional amendment that would allow the state to enact a graduated income tax, state Sen. Don Harmon, D-Oak Park, said at a press conference that his proposal would save money for 94 percent of Illinois families.

"This is tax relief to every family in Illinois earning less than $200,000," Harmon said. "This is major tax relief across the board, and one that we can certainly afford."

Under Harmon'€™s plan, the state would impose a 2.9 percent tax on income of up to $12,500 and 4.9 percent on income between $12,500 and $180,000. Anything over $180,000 would be taxed at 6.9 percent.

Under the state'€™s temporary increase, income is currently taxed at a flat rate of 5 percent. That rate is scheduled to drop to 3.75 percent next year.

Harmon said families making the state's median income of $55,317 would see a savings of $303 on their income taxes under his plan, compared to the current 5 percent rate.

A minimum-wage worker making $23,839 annually would see a savings of $272.

That's not as much savings as Illinoisans would see if lawmakers and Gov. Pat Quinn allow the temporary income tax to roll back to 3.75 percent on Jan. 1.

Under that scenario, the median income family would see a savings of about $689, while a minimum-wage earner would save about $298.

Compared to the current 5 percent rate, Harmon said his plan would generate $23 million less in revenue.

He added that taking any other path would hurt Illinoisans much worse.

"€œWe have two choices other than this,"€ he said. "We can continue an unfair, regressive flat tax at 5 percent or we can cut government services, the services upon which folks rely --€“ education, health care, human services --€“ by 20 percent across the board.

"This is a third way. This is a way we can generate the revenue we need to provide the core services upon which people depend, and do so in a way that provides tax relief for 94 percent of Illinois families."

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