What is the Illinois Fair Tax amendment

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QUAD CITIES, Ill. (KWQC) – Illinois voters will answer a yes or no question regarding the state’s income tax on Nov. 3.

“In the Illinois state constitution as it is right now, there’s requirement that income taxes be levied at a flat rate,” University of Illinois Professor and Director of the Institute for Illinois Public Finance Ken Kriz said.

The current state tax rate is 4.95 percent. A ‘yes’ vote would change that section in the state’s constitution and allow the state government to impose a graduated state income tax.

“The aim is to enact a progressive graduated income tax which means that the rate increases as your income increases,” Kriz said.

Under the proposed amendment, the tax rate drops to 4.75 percent for the first $10,000 of a taxpayer’s income. After that, income up to $100,000 is taxed at 4.9 percent. The 4.95 percent rate remains the same for incomes between $100,000 and $250,000, and then begins increasing. It tops out at 7.99 percent for a single filer making over $750,000.

If you’re a single person making $30,000, you would save $29 under the new tax plan. A married couple filing jointly with $60,000 of taxable income would save $43.

To calculate your own tax rate, click here.

“Everybody below basically about 60 percent of the median income or a little bit above it would see their taxes go down a very small amount or stay the same,” Kriz said.

The state’s ultimate goal is to increase the revenue stream. Supporters of the amendment argue higher-income earners should pay a larger percentage of taxes than lower-income earners, but opponents argue a graduated tax hurts business owners and job creators, and could make taxpayers the target of future tax hikes.

“As long as it’s graduated, it would meet the clause. Nothing would stop them from doing this. Now, it’s kind of a slippery slope argument and those can be taken to extremes fairly easily,” Kriz said.

32 other states currently use a graduated tax structure.

If approved, the new income tax rates would take effect on January 1st.

Copyright 2020 KWQC. All rights reserved.

via https://www.kwqc.com

September 18, 2020 at 07:18AM

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