A bill that would install a progressive tax in Illinois passed a House committee Tuesday.
The Fair Tax Bill, introduced by state Rep. Lou Lang (D-Skokie), made it through the House Revenue Committee and is headed to the full chamber for consideration. If passed, the bill would increase taxes on the wealthy, while lowering the tax burden on about 99 percent of Illinoisans in the state.
"Children, families and communities across Illinois will benefit from a fair tax," said Emily Miller, policy and advocacy director for Voices for Illinois Children. "When lawmakers on both sides of the aisle vote for the fair tax, they'll be giving their constituents a chance to vote for a tax cut for over 99% of Illinois taxpayers while preventing further cuts to our social service and education infrastructures."
Illinois currently has a flat income tax of 3.75 percent. Under the bill's provisions, the state's income tax would instead be based on one's income, with individuals earning $100,000 or less paying a 3.25 percent income tax, and those earning more than $100,000 to $500,000 paying a rate of 3.75 percent. The income tax rate would be 8.75 percent for individuals earning more than $500,000 to $1 million; while the tax rate would be 9.75 percent for people with an annual income of more than $1 million.
Married couples filing jointly would pay an income tax rate of 3.5 percent if they earn $200,000 or less under the bill. The tax rate would be 3.75 percent for couples with a joint income of more than $200,000 and up to $750,000; 8.75 percent for those with annual incomes of more than $750,000 and up to $1.5 million; and 9.75 percent for those with a take home income of more than $1.5 million.
The bill, HB 689, could bring in $1.9 billion to the state, according to Lang. But opponents of the bill, like the Illinois Chamber of Commerce, claim the legislation would adversely affect businesses. Republican Gov. Bruce Rauner's administration has also voiced opposition to the bill, with his spokesperson Catherine Kelly saying the bill "would be the straw that breaks the Illinois economy's back."
A change in the state income tax would require a constitutional amendment. As such, a companion bill that would allow Illinoisans to vote on a progressive tax will be heard in a House committee later this week.